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How America's Largest Private Prison Operator Plans to Beat Corporate Income Tax

Although many on the left have rightly repudiated the myriad manifestations of prison privatization characterized, in part, by involuntary prison labor, ongoing health and safety violations, corporate financing and even "the New Jim Crow," few, if any, have called attention to the relatively obscure relationship between private prison companies and their IRS corporate classification filing status. Though unsexy, tax literacy is crucial for understanding the ways in which private prison operators stylize themselves to public agencies and private investors alike. Surprisingly, IRS filing designations might offer the public its clearest glimpse into the intentions of private prison companies behind closed doors.

Less than a month ago, the nation's largest private prison owner and operator, Corrections Corporation of America (CCA), first announced its plan to assess the feasibility of a Real Estate Investment Trust (REIT) conversion. Never before heard of an REIT? (Pronounced REE-EAT.) No worries, you're not alone.

CCA bills its potential conversion into a REIT as a way to "increase long-term shareholder value," but it will also allow the company to 1) reduce its federal corporate tax liability to zero. and 2) "leverage" (nonexistent) revenue to create the illusion of "more cash on hand." Does this represent a deathbed conversion? From second quarter 2011 to first quarter 2012, CCA earned 16 percent less income than it did over the course of its 2010-2011 quarterly counterparts. Further, the company has 45 percent less cash on hand than it did just three months ago. CCA is scrambling and investors know it.

http://truth-out.org/news/item/9499-how-americas-largest-pri...



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I'm ignorant of how

I'm ignorant of how libertarianism should apply to prisons. Could someone enlighten me or provide something for me to read concerning it? Would there even be prisons? Should we use felons for labor?

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