News
Our letter to the MA Budget Conference Committee 6.17
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Right Problems, Wrong Solutions: Fair Share responds to Paul Ryan's tax reform push
In response to House Speaker Paul Ryan's renewed push, rolled out on Tuesday, June 20, around tax reform, Fair Share's Nathan Proctor said:
"There is a lot to the conversation about tax reform where there is broad agreement. Paul Ryan says we need to prevent offshoring, and we agree. He talks about getting rid of loopholes to make the tax code fairer, and we agree. He talks about shoring America up in anxious times, and we agree.
"But instead of closing loopholes, the plans we've seen would create new, bigger loopholes. Instead of ending incentives to offshore income, the biggest of which is deferral -- the ability to delay paying taxes on offshore income -- they would make these incentives even larger.
"The real solutions are not complicated. Close each and every loophole for offshoring, and make companies pay what they owe, and pass reforms to prevent inversion.
"Paul Ryan identifies the problems we need to solve, but has proposed solutions that make these problems worse -- and reward tax dodging by the biggest companies in the world. We need solutions that make sure everyone pays a fair share, and leaders with the courage to stand up for us."
New Overdose Data Sharpens Call for Closing Loopholes Used to Launder Opioid Profits
After new research by the New York Times found that overdose deaths are the leading cause of death of Americans under 50, it's a powerful reminder that the recommendations of our report, Anonymity Overdose, have not been addressed by Congress.
The scale of the opioid crisis is staggering, and deserves an all-hands-on-deck response from our leaders.
We know why cartels traffic these drugs. They do it for the money, and we at Fair Share believe it's time to go after the money more effectively.
There is a simple bipartisan solution we can enact right now which would help. We should get rid of anonymous shell companies — companies formed with no way of knowing who owns or controls them. These companies, which are not connected to the real owner -- and sometimes not even connected to a real person -- can open bank accounts, transfer money, and buy real estate.
Anonymous shell companies are a popular vehicle for all sort of crimes from laundering drug money to hiding income from taxes. Not even the FBI has access to who really owns these companies. Congress can remedy that by requiring the collection of beneficial ownership information for all companies formed in this country.
As we fight to save lives from opioids, we should leave no stone unturned — which should include the rocks under which drug cartels hide their money.
By Nathan Proctor, National Campaign Director
Among Trump proposed cuts, $193 billion from food assistance
On Tuesday, May 23, the Trump administration revealed its budget recommendations. The budget included deep cuts to many critical programs, and Fair Share was especially disturbed to see $193 billion in cuts over the next 10 years to the SNAP (Supplemental Nutrition Assistance Program) also known as food stamps.
"This is America. No one should have to go hungry, we have the resources to make sure of that," noted Fair Share's Nathan Proctor. "The SNAP program works, and helps stabilize people going through a hard time and has a lot of support in Congress."
Interestingly enough, others in the Trump administration has also shown support for SNAP. Just last week, Sonny Perdue, secretary of agriculture, said in a House hearing: "It’s been a very important, effective program. As far as I’m concerned we have no proposed changes. You don’t try to fix things that aren’t broken."
Fair Share will continue to highlight the impact of hunger in America, especially on children, as part of our End Childhood Hunger campaign.
One of the other troubling aspects of the budget is that it expects expanded economic growth to pay for revenue losses, which most economists say is not realistic. Not only that, that growth was already supposed to pay for the tax cuts, which means that $2 trillion in growth related revenue increases are double counted -- and is essentially an accounting error.
Trump Tax Reform Ignores Worst Problem in Tax Code
Today, the White House announced the much anticipated tax reform plan, though still very much in outline form. Fair Share’s National Campaign Director, Nathan Proctor, issued the following statement:
Already, our loophole-ridden corporate tax code is rigged for big companies and their armies of tax lawyers.
Not only does this plan do nothing about the worst part of our tax code -- that it rewards hiding profits offshore -- it make it worse.
We hope Congress will reject this proposal, which would not only reward companies for offshoring to the tune of $500 billion plus, but also increases the incentive to offshore more going forward.
There is an estimated $2.5 trillion in profits from U.S. companies stashed offshore, which, thanks to loopholes in the law, allows companies to indefinitely defer the taxes they own on that profit. Most of that money, 66 percent, is held by just 30 companies.
The current plan would offer deep discounts on those deferred taxes, and would stop taxing offshore profits going forward. Because countries like the Cayman Islands corporate tax rate is 0 percent, there will always be an advantage to booking profits offshore.
Why should a store on Main Street pay a higher tax rate than a corporate giant like Pfizer or Apple?
Other issues flagged by Fair Share’s analysis:
- Lacks sufficient details to gauge just how much it will reduce revenues, and how the benefits and costs are for different categories of businesses and individuals.
- Without full details, appears to create a large tax shelter issue by no longer treating “pass-through” entities with same rates as individual tax code. By taxing these corporate structures at 15 percent, it allows high-earning individuals to shelter their income from the standard rates for top earners. President Trump owns 500 such entities.
- The deficit could grow sharply. The administration claims that growth in the economy will offset the cost of these tax reductions, but even the models with the most favorable views of tax cut-fueled growth show this to be untrue, as has recent history. Such sharp increases in debt will endanger public spending on other important programs.
Citing debunked tax myth, President Trump moves to scrap anti-inversion rule
As we at Fair Share have said previously, if we want to base our debate on tax reform on reality and fairness, we need to start with the facts, and correct the record.
President Donald Trump has often cited a myth about our tax code, one which has been disproven: That American companies pay the highest corporate taxes in the world.
That he used this myth as justification for signing an executive order aimed at scrapping a rule that prevented companies from “inverting” -- or renouncing their status as U.S. companies to dodge taxes -- further underscores our point.
The president has said he wants to get rid of corporate tax loopholes and stop companies from offshoring profits and jobs. And yet, his executive action could have the effect of rewarding companies for moving their headquarters overseas to take advantage of tax loopholes.
First let’s start with his assertion that we have the highest corporate tax rate in the world. While the statutory rate is higher than most countries (at 35%, but not actually the highest), the average effective tax rate for U.S. companies is 27.1%, which is below average for other major economies, which average 27.8%.
Bigger companies pay less. Fortune 500 companies paid an average effective federal income tax rate of 21.2%.
Already, many larger companies pay less than their smaller competitors because they have the ability and complexity to use the loopholes in our current system.
Trust me, your barber isn’t looking to invert to Ireland to dodge his taxes, he just pays what he owes.
Facilitating more inversions isn’t reducing taxes on companies, it’s allowing those who most aggressively hide profits offshore to get away with it.
Our president is also calling for a 15% corporate tax rate. But without getting rid of loopholes like the ones that allow inversions, this just means our tax code, which was never the leader in tax percentage will continue to lead in just how much it allows big companies to avoid paying what everyone else does.
If you want to stand up for the little guy, how about closing loopholes?
New Data: What Americans want changed about taxes
Pew Research's latest data shows what people like and don't like about U.S. taxes. For the complete report, visit this page.
It would appear that tax reform that expands tax loopholes for corporations, or doesn't address the gaming of the system by those making the most, would be a major misfire according to the preferences of the American people. Unfortunately, a lot of proposed reform would do exactly that.
Learn more and take action here.
Town hall in Virginia highlights importance of Consumer Bureau
Predatory lending and unfair banking practices were a hot topic in Charlottesville yesterday when community leaders and advocates met at the Jefferson-Madison Library to discuss consumer protection and defending Virginians from unfair banking practices.
The event included Pastor Joseph Chambers of the Buckingham County Board of Supervisors, former Sheriff of Fluvanna County Ryant Washington, David Irvin of Attorney General Herring’s office, Keo Chea of the Consumer Financial Protection Bureau, Jane Dittmar of Delegate David Toscano’s office, Ed Mierzwiski of the Public Interest Research Group, Chris Monioudis of Senator Mark Warner’s office, Lisa Stewart of the Institute for Business in Society, Jay Speer of the Virginia Poverty Law Center, and others.
The group met to discuss best practices and the challenges facing consumer protection, distribute educational literature, and hear public comment in a town hall setting. Hosted by Fair Share in collaboration with the Consumer Financial Protection Bureau, US PIRG, and Attorney General Mark Herrings office, the goal of the town hall was to provide Virginians with the resources they need to take action against unfair banking practices. The CFPB and Director Cordray have been in the spotlight recently due to many Senate Republicans and the Trump administrations attempts to re-structure the consumer protection watchdog in a way that would make it more difficult to take action against predatory lending and other unfair banking practices.
Fair Share will be hosting its next town hall and round table in Fairfax County this May in collaboration with the CFPB in order to provide consumer protection resources throughout the state and foster dialogue around predatory lending and unfair banking practices.
95 Experts Call For Investments in Early Education
Researchers, scientists and academics specializing in child development join Massachusetts Fair Share in calling to invest in early education to help children thrive
We at Massachusetts Fair Share have recruited the support of 95 education experts who support increases in quality and access to early childhood education in Massachusetts as being justified by the research.
Massachusetts should lead on education, but when it comes to early education, we’ve fallen behind. As state leaders have begun to take meaningful steps to help improve early learning programs, we’re hoping to bolster those efforts with the voices of experts. The science is clear: Quality early education programs produce better education, health, economic and social outcomes for children, families and the community.
Last week, Gov. Charlie Baker announced he requested nearly $28 million in unspent funds from the Department of Early Education and Care to be released to support early educators. Earlier this year, Speaker Robert DeLeo called to make addressing early education a priority in the upcoming budget.
Specifically, the letter, delivered April 5, noted that research supports early education investment because it shows:
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Quality early childhood education can reduce the achievement gap.
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Access to quality early childhood education is essential.
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Quality programs produce quality life outcomes.
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Investing in quality early childhood education pays off.
To read the full copy of the letter and see the full list of signers, click here.
Welcome news: Gov. Baker calls for $28 Million for early ed workforce
On March 30, Gov. Charlie Baker announced that he requested some $28 million in found money to be directed to early educators through an increase in the reimbursement rate for subsidized early education and care.
This is welcome news. The release of unspent money to directly address one of the biggest issues affecting early education and child care in Massachusetts is real progress.
We have questions about why this money was budgeted but not spent previously, but are grateful that early educators could see their wages stabilized.
It's clear that the political environment around early education and care has shifted.
Last summer, the governor targeted investments in early educators for line item vetoes. We are encouraged to see that Gov. Baker now sees these investments are critical. Both the governor and legislative leadership deserve credit for hearing concerns and taking some steps to address the issue. They have my thanks.
In our work to push state leaders to create the kind of early education system that works for every child, we've seen time and time again how much support there is on the ground for these critical programs. Last year, we delivered a letter signed by 136 local elected leaders, and as we spoke to city and town leaders all across the state, we heard again and again how much they connected access to high-quality early education as critical to setting up children for success. Those messages are getting through.
We must continue these efforts. While we've started to catch up from a decade of shrinking investments in early education, other states like Oklahoma offer every child the choice to attend public preschool.
I look forward to continuing efforts to push for a system where every child in Massachusetts gets the same strong start.