Oregon Senator Ron Wyden Introduces Bill to End Prison Tax Breaks
July 14, 2016
FOR IMMEDIATE RELEASE
Amanda Aguilar Shank, Enlace, 503-660-8744
Benjamin Ndugga-Kabuye, Black Alliance for Just Immigration, 347-410-5312
Legislation will weaken private prison industry, divest from criminalization
Senate Finance Committee Ranking Member Ron Wyden, D-Ore., today introduced legislation that would limit the ability of private companies that operate prisons to take advantage of special tax rules for Real Estate Investment Trusts (REITS) -- U.S. corporations that invest in real estate. The Ending Tax Breaks for Private Prisons Act of 2016 would significantly weaken the for-profit prison industry, and free up millions of dollars that could be reinvested in services that actually keep our communities safe.
“I am very concerned that the U.S. prison system has become a way for private enterprises to turn an unfair profit,” said Wyden. “Our broken down tax code has made this possible by allowing the private prison industry to take advantage of tax rules aimed at REITs. As part of rethinking our criminal justice system, particularly as it results in the mass incarceration of low-income and minority individuals, the tax rules for REITs must be changed so we are not encouraging companies to unjustly profit from prison detention services.”
In 2013, the IRS classified Corrections Corporation of America (CCA) and GEO Group as Real Estate Investments Trusts (REITs), based on the companies’ claim that income received from local, state, and federal governments to incarcerate people was “real estate” income. The legislation introduced by Senator Wyden would clarify that much of this income is not in fact eligible for REIT status, as it goes towards operating costs like prison guards, healthcare, and food, not real estate.
Corrections Corporation of America and GEO Group reported income of over $3.6 billion in 2015, almost all of which was tax free due to their status as REITs.
The National Prison Divestment Campaign, convened by Enlace, began pushing to revoke prisons’ controversial REIT status in 2015, and has since gained widespread support from a public that is outraged by the targeting of Black and brown communities by local law enforcement and Immigration and Customs Enforcement (ICE), and the sprawling incarceration system that private prisons operate within.
“Ending taxpayer subsidies for private prisons is part of a larger necessary effort to end private prisons entirely, and to end the criminalization and hyper-incarceration of communities of color and immigrants in the US,” said Amanda Aguilar Shank, Senior Campaign Organizer with Enlace. “We are looking forward to Congress taking this issue up as one solution in the era of over-policing and over-incarceration of our communities, and we honor Senator Wyden for the positive step he has taken towards ending private prisons.”
“The push, against private prisons is part of a broad disruption of the entire system of mass criminalization. This is only a beginning, “said Ben Ndugga-Kabuye, with the Black Alliance for Just Immigration. “The Prison Divestment campaign will continue to imagine a better world by divesting from all prisons, and every level of policing and criminalization and reinvesting our resources into the housing, healthcare, education and community based safety strategies that would actually make us safe.”
"The current system of for-profit prisons is immoral and this bill is a good first step to remedy the inherent problem,” said Flavia Jimenez, Sr. Attorney and Director of Immigrant Justice at Advancement Project, a national civil rights and racial justice organization. "It leaves thousands of people of color in the hands of corporations seeking to profit from the incarceration of parents, workers and siblings. In the immigrant community, these prisons target people who only have civil immigration issues, which underscores that they target anyone if it means they can turn a profit."
The Prison Divestment Campaign was convened by Enlace in 2011 in response to the role that private prisons play in the expansion of criminalization and incarceration of immigrants and people of color in the United States. The campaign has over 200 endorsers who represent immigrant, Black, LGBT, labor, and community groups.
The Ending Tax Breaks for Private Prisons Act of 2016 introduced today can be found here.