No other state subjects its public schools to their Industrial Tax Exemption Programs like Louisiana does. Most exempt them entirely. Did you know that?
It’s a critical piece of information not mentioned much, if at all, in recent discussions about the merits of the exemption program that since 1936 has allowed corporations to receive an abatement from local property taxes owed to local jurisdictions, including public school districts, in Louisiana.
Did you know that in Louisiana, 68% of the children in its public schools live in poverty? Did you know that in East Baton Rouge parish, the number of its public school students who live in poverty is even higher? 76%.
These facts—that Louisiana is the only state to compel its public school districts to forego tax revenue from industry and the number of children attending those public schools who live in poverty—are absolutely relevant to any debate about the merits of ITEP.
Let’s also remember that the agenda of corporations, not only Exxon but including Exxon, is to minimize expenditures and maximize profits. In order to minimize expenditures, many corporations have been quite successful in shaping public policy to minimize their tax “liability,” regardless of the effect on the common good. This is made unequivocally clear by the fact that Louisiana, a state with one of the highest percentages of public school children living in poverty, is the only state compelled to subject its public school districts to its Industrial Tax Exemption Program.
It is made even clearer by what is going on in East Baton Rouge parish at this time. Seventy-six percent of the children enrolled in East Baton Rouge public schools live in poverty, and yet East Baton Rouge School Board members who last month voted against a pair of applications for suspect tax exemptions are being harangued by business leaders for denying those exemptions.
And please know, the applications the School Board members denied appear to have been submitted by Exxon for the sole purpose of orchestrating and controlling a subsequent discussion about the merits of ITEP in order to secure approval of applications for more substantial exemptions scheduled in the months ahead.
Advocates for business and industry claim ITEP is necessary to provide “incentives” for projects, promote job creation, and spur the economy. However, the numbers suggest Industrial Tax Exemption Programs pit participating states against one another and force targeted communities in a race to the bottom. This is what happens when a community allows corporations to minimize expenditures in order to maximize profits not within reason, but at any cost. Given the latitude, corporations will put profit over people, profit over clean air, profit over clean water, profit over children living in poverty, profit over basic human decency. This agenda is immoral. But that doesn’t stop corporations like Exxon.
Exxon’s applications for yet more tax exemptions—all of them—from East Baton Rouge parish and particularly from the East Baton Rouge Parish School System is a testament to Exxon’s relentless pursuit of profit at any cost. Take even a cursory look at Exxon’s 2017 financial statements filed with the Securities and Exchange Commission—their 10-K—and the economic injustice of these requests should appall you.
Here are a few relevant details from Exxon’s 2017 financial statements[1] not mentioned in their presentations:
Exxon had $82 billion in U.S. revenue;
Exxon had $155 billion in Non-U.S. revenue;
Exxon cleared nearly $20 billion in profits;
Exxon’s total income tax expense in the U.S. for 2017 is a net credit of $8.5 billion dollars. (Exxon did not pay $8.5 billion dollars in U.S. income taxes. They incurred a net credit, which can be used as a deduction against future revenue. A coupon of sorts from the U.S. government.)
In comparison, Exxon’s Non-U.S. income tax expense was $7.4 billion dollars. No net credit.
Exxon did pay other taxes, which may be more pertinent to ITEP.
It paid 4% of $82 billion—the amount of revenue generated in the U.S.—in other taxes and duties in the U.S.
In comparison, Exxon paid 17% of $155 billion—the amount of Non-U.S. revenue—in other taxes and duties to other countries.
Exxon’s total U.S. tax liability—both income and other taxes—for 2017 includes a net credit of nearly $4 billion dollars.
In comparison, Exxon’s total Non-U.S. tax liability for 2017 is over $35 billion dollars.
4% in other taxes to the U.S. versus 17% in other taxes to other countries.
A net credit in total taxes in the U.S. versus $35 billion in total taxes to other countries.
What these numbers should make evident is that Exxon’s claim that it needs more tax incentives to make it sufficiently profitable in order to do business here is poppycock. Other countries hold Exxon to a higher standard, and it does not deter Exxon from doing business in those countries.
In the comparison most favorable to Exxon, it pays 17% of $155 billion in Non-U.S revenue in other taxes to other countries. That’s almost twice as much as the revenue generated in the U.S. and over 4 times as much in other taxes paid in the U.S.
Four times.
And yet Exxon demands even more, more concessions from the people who have already conceded so much. As Exxon’s 10-K demonstrates, Exxon will not on its own volition share its profits equitably—not with Americans, not with Louisianans, and certainly not with the people in East Baton Rouge parish. Exxon doesn’t even share its profits equitably with the people within their corporation.
In 2017 Exxon’s CEO received a $17.5 million dollar compensation package[2]. That’s not over several years. It’s compensation for a single year. But here’s the real kicker: The CEO’s annual compensation is 108 times higher than the median of the annual compensation of all other Exxon employees.
108 times higher.
Exxon is not even sharing its profits equitably with its own people, and yet time and time again, Exxon employees feel compelled to defend their employers’ request for yet another tax exemption. Not only are these employees not sharing equitably in Exxon’s profits, but those that implore school board members to vote for these exemptions are taking part in the systematic destruction of a public institution that could, if properly funded, improve their standard of living and the quality of life in their community. It’s like victims defending their abusers. A corporate Stockholm Syndrome, if you will.
They become accessories, compelled to abet their employers’ exploitation of the most vulnerable victims, children living in poverty. Let’s remember that most of the CEO’s $17.5 million dollar compensation package is stock options. Ultimately, the value of his compensation package rests on his ability to minimize the expenditures in order to maximize profits, and apparently, going to great lengths to avoid paying taxes is one way to do that.
So we have a multi-billion dollar profitable corporation with a multi-millionaire CEO pressuring the people in a state with one of the highest poverty rates in the U.S., pressuring a school system that serves primarily children living in poverty—76% of the children in the East Baton Rouge Parish School System live in poverty—to grant more tax exemptions, so the corporation and its CEO can profit even more.
It is immoral.
This is not a rising tide that lifts all boats like Exxon tries to pretend. This is not about the need to grow the pie bigger. This is about how the pie is divided.
Exxon’s greed knows no bounds because it’s not just about money. It’s about power. It’s about keeping people poor and desperate and at their mercy.
And here’s both the bad and the good news. Exxon isn’t all to blame for this. We are. Because Exxon cannot accomplish this without our complicity. We are all suffering from a corporate Stockholm Syndrome. We have allowed Exxon to impose its values on us. We have been made complicit.
This is accomplished in a myriad of ways. Exxon has a great deal of money to spread around. Some obvious: campaign contributions to elected officials, contracts with lobbyists. Some more subtle: Grants for economic studies and reports. Contributions to non-profit foundations. Subcontracts to small businesses. Sponsoring awards. Hiring public relations firms. Lawyers. Accountants. Vendors. We are all complicit.
I don’t know anyone in this parish who is opposed to the systematic destruction of our social safety net—the common good—and who isn’t afraid to speak out against the monied interests behind its destruction.
The irony is that by refusing to speak out against the dismantling of our social safety net, we don’t make ourselves and our children more secure. We make ourselves more vulnerable. Without a social safety net, we are more at the mercy of the monied interests. And when our well-being is wholly dependent upon the largess of a corporation whose agenda is immoral, well, Lord help us all.
That’s the bad part. Here’s the good part. Things can change for the better. Things will change for the better when we each recognize the ways in which we are complicit with the systematic destruction of the common good, and we then choose to resist.
So, to the elected officials who vote with the monied interests for any number of reasons—afraid to lose income, health insurance, social standing, you are complicit.
To those who fail to criticize those within their social circle who act on behalf of the monied interests, you are complicit.
To the seasoned administrator who, maybe blinded by privilege, initially underestimated the task and then remained silent for a few modest wins, you are complicit.
To the school system administrators who cling to the misguided faith that they can wring equity from inequitable policies promoted by the monied interests and so remain silent, you are complicit.
To the small business owners who believe themselves moral but who defer to the judgment of executives of an immoral corporation, you are complicit.
To the university faculty who shape their reports to benefit the monied interests in order to garner soft money grants, you are complicit.
To the journalists and reporters who, maybe at their editors’ behest, shape the news to benefit the monied interests, you are complicit.
To the directors and board members of non-profit foundations that accept contributions from the monied interests, which allows them to divert their taxes from the oversight of elected boards to that of appointed boards, you are complicit.
To the community organizers and advocates who choose only issues that are winnable, or that don’t offend the monied interests, or that are funded by the monied interests in order to distract from their agenda, you are complicit.
To the community members who take action on issues but who do not take action to get candidates who aren’t beholden to the monied interests elected, you are complicit.
To the stay-at-home spouses who bite their tongues and divert their attention for fear of jeopardizing their spouse’s employment and their children’s prospects, you are complicit.
To all of us who stay silent and passive for fear of losing a job, a contract, a client, social standing, we are complicit.
If you do not recognize the ways in which you are complicit, you are still complicit.
The agenda of corporations like Exxon is immoral. They put profit over people, profit over the common good, profit over basic human decency. And they are willing to go the distance for that profit, but they cannot travel that distance without the complicity of the rest of us.
How are you complicit? How will you resist?
You can resist by declaring Exxon’s relentless pursuit for yet more tax exemptions from this parish and especially from its schools for what it is: an immoral economic injustice.
You can resist by telling anyone who argues these tax exemptions are good business, that “good” defined by those who put profit over the common good is never good. It is an immoral economic injustice.
You can resist by telling those who argue Exxon might abandon Baton Rouge if they are denied these exemptions, that threatening an immoral economic injustice as a means of addressing an immoral economic injustice is immoral.
One person taking action will have little effect, but if one does, then maybe another will. And another. And another. Five. Ten. Fifty. 100. 700. 20,000. 100,000. When we act together and refuse to allow corporations like Exxon to impose their immoral agenda on us, we will make right what is wrong. It’s the only way we can. It’s the only way to address the economic injustice in our community, which is at the heart of every other injustice.
There is always a time to make right what is wrong. Let that time be now.
[1] Exxon Mobil Corporation. (2017). Form 10-K. Retrieved from https://ir.exxonmobil.com/sec-filings. Note 18; Consolidated Statement of Income; Note 19.
[2] Exxon Mobil Corporation. (2018). Proxy Statement. Retrieved from https://cdn.exxonmobil.com/~/media/global/files/investor-reports/2018/2018-proxy-statement.pdf.