Should Worker Co-Ops pay taxes?

Should Worker Co-Ops pay taxes?

An important element of any economics discussion, taxes usually get a bad rap. In general terms, a person's stance on whether or not the members of a society should pay more or less taxes will depend on their ideology. One recurring (and important) issue is the amount of taxes paid by enterprises. When this discussion comes up, we usually think of BIG corporations like Apple, who was found to have received illegal tax benefits.

But what about cooperatives? Considering the social benefits that a cooperative form of enterprise provides, should it be held liable to pay taxes? Some experts believe that farmer cooperatives provide a much needed stability to the food market and should in fact be exempt from paying taxes. As another example, in Puerto Rico, cooperatives are exempt from paying any taxes except sales tax.

Currently federal law requires worker cooperatives to pay taxes, although some tax benefits do exist. So what do you think? Should cooperatives pay taxes?

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  • Wayne Stinson
    commented 2017-05-09 14:17:54 -0400
    CoPs should be provided at least the same breaks which are routinely provided Cap/Corp enterprises. In NY potential business investment by corporations are offered tax abatement schemes (payment in lieu of taxes or PILOT agreements). Certainly, a start-up CoOp should receive at least as much help. After becoming well established a CoOp should be taxed to support the commons and the community.
  • Michael Anthony
    commented 2017-04-21 17:14:05 -0400
    under current systems, no, however they should mantain social service funds to be used per their own discretion, augmenting the capitalist state budgets, but funding the things they determine are socially useful, but underfunded. federations/associations of co-ops could then both lobby for tax free status for co-ops, to encourage co-operative development under capitalism, while forming larger foundations(as many do) to help fund co-operative development and address unmet social needs, using co-operative economic tools whenever available.
  • Mark Dibdin
    commented 2017-04-13 18:53:13 -0400
    If the question is should cooperatives have tax exemptions because many large corporations negotiate them, then yes they should. However, all businesses use the local resources that are provided by paying tax, road system, power, phone and networks, hospitals, health care, refuse collection etc. If a business uses a disproportionate amount of these compared to the amount of tax they pay (which can sometimes be very low or 0) then the burden of tax should be on the user of those provisions, rather than the larger population paying for a company to create huge profits for themselves and the shareholders at the expense of everyone else. Every company should pay the tax that is due.
  • Mark Dibdin
    tagged this with good 2017-04-13 18:53:12 -0400
  • Benjamin Wies
    commented 2017-03-12 15:36:48 -0400
    I mean, if your going to have a government, and a fully/mostly cooperative economy, then I’d say yes they should.

    In the current situation—one of transition at best—no they shouldn’t, as long as they’re using said excess income to expand job opportunities at either other worker owned coops, or at their own. Even Mondrogon. Essentially, incentivise co-ops to buy out cap business, as long as said business’s is then cooperatised.
  • Betsy Avila
    commented 2017-02-14 07:55:30 -0500
    Like any business, it would depend on the size and the stability of the coop. A lot of small businesses benefit from tax breaks, and the same should be made for any small coop. Should any coop get to Mondragon-level size and success, they should definitely be subject to higher taxes. Do coops deserve an all-around better break? Yes! Give the social benefits coops provide there should be an exception made for worker-owned and worker-directed businesses, even if it’s just a bit of saving on their end. It should be in everyone’s interest to incentive business owners to start or convert to a coop model.
  • Betsy Avila
    tagged this with good 2017-02-14 07:46:41 -0500
  • Andrew Mercado-Vázquez
    published this page in Message Board 2017-01-29 12:29:48 -0500