THE BLOG
05/28/2013 12:18 pm ET Updated Jul 24, 2013

Pearson: Always Earning with Unbelievable Chutzpah

Corporate tax scams designed to legally avoid tax payments that support communities and essential social services like education have been in the news all week. The most prominent tax avoider has been Apple, whose chief executive Tim Cook appeared before a Senate sub-committee to explain how the technology giant used tax loop-holes to avoid billions of dollars in corporate income taxes owed the United States by claiming its profits were really earned by a "paper" subsidy based in Ireland.

Of course Apple is not the only company to cleverly and legally cheat the countries and communities where people purchase its products and services. Google, Starbucks, and Amazon are all under investigation as tax avoiders by the European Organization for Economic Cooperation and Development.

In an interview in The New York Times, Edward Kleinbard, a law professor at the University of Southern California and a former staff director at the Congressional Joint Committee on Taxation, said the technical term used by economists to describe this type of behavior is "Unbelievable chutzpah."

Not to be outdone, but on a smaller scale, Pearson, the education publishing giant and testing company, has wangled $66 million in tax breaks from the state of New Jersey but may not be living up to its end of the bargain.

On Thursday, May 24, 2013 protesters gathered in Hoboken at the Manhattan ferry terminal where they claimed that Pearson received the tax subsidies to keep jobs in the Garden State, but was actually relocating 500 of the positions to New York City. Bill Holland, the director of the New Jersey Working Families Alliance charged New Jersey Governor Chris Christie with providing subsidies to corporations while millions of dollars were cut from public services including the schools.

Pearson's corporate slogan is "always learning," but banners at the rally claimed it should be "always earning." The protester had a giant mock-check made out to Pearson from New Jersey taxpayers and took it on the ferry across the Hudson River to New York.

Subscribe to the Politics email.
How will Trump’s administration impact you?