News
Now onto taxes ...
Now that the health care vote has been delayed (for now), it appears that tax reform will move to the top of the agenda.
Just like with health care reform, the details are being kept hidden for now. No matter what plans are put forward, you can be sure that we at Fair Share will:
- Eliminate loopholes that hurt Main Street: armed with legions of tax lawyers and lobbyists, the biggest and most profitable companies carve out loopholes that allow them to dodge taxes, and leave smaller, local businesses to pick up the tab. We're working to make everyone play by the same rules.
- Bring the facts to people on the ground: Both sides of the debate will have their talking points about how great their plans are, and how bad the others are. We can cut through the spin and get facts to people by doing local work about the real impacts.
- Do what we've done before: In 2012, Fair Share sent organizers to the districts of 21 swing Republicans to push them to back protecting middle class tax rates, but rolling back tax cuts for the highest earners. We were able to flip 5 of our targets.
ACA Repeal Bill Stuffed with Nearly $500 Billion in Tax Cuts
After the rushed vote to push the American Health Care Act through committee, which would repeal large parts of the American Care Act, ranking member of the House Ways and Means Rep. Richard Neal wondered:
"Is this health care or is this a tax cut bill?"
It's a good question.
Especially because over the next 10 years, the ACA repeal bill would cut $275 billion in taxes for households making more than $250,000/yr and $193 billion for Health Insurance, Pharmaceutical and Medical Device companies.
Among the cuts are:
- Repealing a 3.8% tax on "passive income" from investments -- stocks, property rental, capital gains at a cost of $158 billion / 10 years.
- Cutting a higher rate medicare tax on incomes over $250,000 per married couple at a cost of $117 billion / 10 years.
- Dropping taxes on Big Pharma $25 billion / 10 years.
- Dropping taxes on Health Insurance Companies $145 billion / 10 years.
- Dropping taxes on companies which produce medical devices by $20 billion / 10 years.
That adds up to $465 billion in tax cuts.
As the news stirs today that the Congressional Budget Office estimates 14 million people will lose insuance in the next year if the repeal is passed, and a total of 24 million in the next decade, one has to wonder:
If we are giving away health care for millions and millions of people what are we getting in return?
Because half a trillion in tax cuts for a set of corporations and families making more than $250,000 per year isn't a very motivating answer.
Fair Share Calls for Congress to push back on Trump’s tax myths
Fair Share responded to President Donald Trump's joint address to Congress by highlighting the danger to misrepresenting the challenges facing the U.S. tax code.
If we want to base our debate on tax reform on reality and fairness, we need to correct the record. Last night, we heard the president repeat a common myth about our corporate tax code -- that American companies pay the highest corporate taxes in the world. In fact, the average effective tax rate for U.S. companies is 27.1%, which is below average for other major economies, which average 27.8%.
Our loophole-ridden corporate tax code is rigged for a select set of big companies and their armies of tax lawyers. That's where the American corporate tax system really leads the way. Loopholes allow a few companies to pay almost nothing while others pay 35% or more. We are deeply concerned with any tax reform that instead of evening the playing field simply increases the rewards for companies who use accounting tricks to avoid taxes by stashing profits overseas.
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.
Any tax reform that doesn’t address the loopholes is a sham. Let’s start with the premise that everyone should pay a fair share, and everyone should play by the same rules.
ACTION: Wall Street reform at risk
We all know what can happen on Wall Street if there are no rules and no accountability.
That's why Fair Share supports the Consumer Financial Protection Bureau (CFPB or Consumer Bureau) -- to watch out for predatory and deceptive behavior in the financial industry. And it's working. It has returned $12 billion to 27 million Americans who were victimized by shady lending or financial trickery.
Some in Congress are pushing to shut down the CFPB. But if we can get just 41 votes to protect the agency, we can create a firewall in the Senate.
You should be able to save, invest and manage important financial decisions without the fear of being ripped off. And we all want fair, clear, transparent, and enforced rules that protect consumers in the financial marketplace.
That’s the mission of the CFPB, a law enforcement agency that ensures financial service providers play by the rules.
The CFPB has been incredibly effective. Just last month, the bureau sued Navient — formerly Sallie Mae, a loan servicer used by students — for improperly processing loan payments. And they’re the agency that fined Wells Fargo $100 million for fraud in September and ordered Citibank to pay $5 million in consumer relief for illegal debt sales and debt collection practices.
In spite of the success of the agency, the financial industry is spending millions to convince members in Congress to weaken or even dismantle this agency and other Wall Street reforms.
We will lose this fight if Congress only hears from the banking lobbyists. If we raise enough awareness and inspire enough action, we can win.
Fair Share speaks out against Rep. Delaney's Corporate Giveaways
Rep. John Delaney (D-MD) is putting forward two bills, “Partnership to Build America Act” and the “Infrastructure 2.0 Act,” which are tax giveaways posing as infrastructure spending.
Fair Share is joining with our allies at FACT to oppose these bills, and call for real reform that evens out the tilted playing field of corporate taxes, not makes it worse.
Already, our loophole-ridden corporate tax code is rigged for big companies and their armies of tax lawyers. By stashing profits in offshore tax havens through complex accounting schemes, big multinational companies avoid paying hundreds of billions in taxes, leaving the rest of -- taxpayers and smaller businesses -- to pick up the tab.
There is an estimated $2.5 trillion in profits from U.S. companies stashed offshore, which costs taxpayers nearly $718 billion in lost revenue, most of it held by just a few dozen companies. Meanwhile, our local businesses are paying full freight. They don't set up shell companies in the Cayman Islands to stash their money. Why shouldn't everyone play by the same rules?
Both of Rep. Delaney's bill would reward companies who do the most offshoring by offering steep discounts on the money held offshore. They take an already rigged system and rig it further.
STATEMENT: Congress Scraps Anti-Corruption Measure
On Feb. 3, 2017, the Senate voted 52-48 to scrap a rule designed to prevent oil companies from bribing foreign officials. Referred to as the Cardin-Lugar transparency provision, the rule required U.S.-listed drilling and mining companies including Exxon, Chevron and many others to publish details of their payments to governments across the world in return for rights to natural resources, with the goal of ending corruption. Fair Share's Nathan Proctor had this statement:
"We cannot tolerate a society where the rules only apply to some, but not the most powerful companies. We are deeply concerned that it appears that a top concern of Congressional leadership was to remove an incredibly effective anti-corruption measure.
"We are waking up to a new reality where powerful companies are undermining transparency, accountability and fairness. We are deeply disappointed that our Congressional leaders have gone along with these schemes, and jettisoned our values of fairness and accountability.
"This is not how you drain the swamp."
6 ways the Senate Democrats' infrastructure plan will work better than President Trump's
The Trump White House previewed part of their infrastructure, and Senate Democrats have countered with a plan on its own.
While we don't know exactly what the administration is planning, during the campaign they offered an overview of a plan that focused on tax breaks for private developers. Over the last few days, a list of possible projects was leaked which appear to be at odds with that earlier overview.
Fair Share supports investing in infrastructure, prioritizing repair, maintenance, long-term sustainability and expanding access to economic opportunities. Here are six reasons why we think the Senate plan will deliver better results for people:
1. It includes investments targeted at expanding access to opportunity. We believe that our infrastructure invests should be done in a such a way that more people can connect to the opportunities in our economy. The Senate Democrats plan would devote $20 billion to making sure that everyone can access high-speed internet, which can help provide new opportunities in tech fields, especially in rural areas. They also invest in modernizing schools, and connecting struggling areas to job opportunities. The Trump plan does not make similar investments, in part because it relies on public private partnerships which are very unlikely to be set up in places of greatest need.
2. It paves the way for more clean energy. Solar and wind power, and energy efficiency are creating new jobs while cutting back on pollution and helping transition from the decline of coal. The Senate Democrats plan allocates $100 billion to improve transmission, storage and improve incentives. The original Trump policy doesn't mention clean energy, while the leaked possible project list includes 3 projects for a total of $10.5 billion.
3. It pays for itself by making the corporate tax code more fair. Currently, our tax laws allow multinational companies to hide their profits offshore and "defer" U.S. taxes indefinitely. It's estimated closing this loophole and making those companies pay what they owe would raise $718 billion immediately, and $100 billion each year moving forward. Not only would closing loopholes fund all these critical investments in infrastructure, it evens the playing field for smaller local businesses, which don't set up tax shelters in the Cayman Islands but have to compete against other businesses playing by different rules. The Trump plan does not provide a way to pay for itself and therefore would add to the deficit.
4. It avoids privatization boondoggles. The most troubling part of the Trump plan is the reliance on privatization to create infrastructure improvements. These privatization deals tend to be great for the private company and bad for the taxpayer. These deals have historically guaranteed profits to a private company, while losses get put on the backs of taxpayers. This isn't how you drain the swamp. The other problem with tax incentives as the main mechanism is that it would only work for new projects. We think the priority must be on fixing broken roads, bridges, public transit systems and water infrastructure. Also, private partnerships will focus on places with an already strong economy, leaving struggling areas further behind.
5. It invests in greener, more accessible forms of transportation. People, particularly millennials and seniors, want to see more alternative transportation -- from train and bus service to walkable towns and bike lanes. Public transit ridership has grown 37% over the last 20 years, but repairs have not kept up. The Senate democrats help fix and expand clean, efficient public transportation. There are several projects on the leaked administration project list that would also meet this goal, though, again, we are unsure how committed to that list of projects the administration is.
6. It's focused on repair and maintenance. It is unclear how much the final Trump plan will focus on repair and maintenance, as this is one of the main conflicts in the released plan, and the leaked project list. This is important, as far too much of our federal transportation and infrastructure funding has gone toward new projects, many of which were unnecessary -- including the famous bridge to nowhere. While it's possible that the final Trump plan will take that into account, the Senate democrats plan clearly has it as a focus. It's time we fix problems like lead in drinking water and dangerous bridges, and not invest in more sprawl.
House Report Recommends Against "Gutting" Food Assistance
Anti-hunger advocates were relieved to hear that our message that the Supplemental Nutrition Assistance Program (SNAP) is working is getting through to Congress. This week, the House released a report on a two-year, top-to-bottom review of SNAP and found that the program is effective and necessary.
In an statement published at Politico, House Agriculture Committee Chair Mike Conway (R-Texas) said "You will find nothing in this report that suggests gutting SNAP or getting rid of a program that does so much to serve so many."
This represents somewhat of a reversal on previous statements, which implied that the SNAP program was wasteful. Fair Share and the Fair Share Education Fund helped deliver personal stories to Congress to show how important SNAP is to helping people get back on their feet, and especially how it helps children have the food they need to get a fair shot.
When kids are hungry, they struggle to learn. When kids don't learn, they struggle in life. Still, 16 million American kids are at risk of going hungry every day. That’s 1 out of every 5 kids. We can and we must do better.
Congress is deciding the future of hunger programs right now. As part of the federal budget debating happening right now, expected to pass early in 2017, members of Congress are debating funding levels for programs like SNAP. In recent years, SNAP has borne the brunt of spending cuts, and Fair Share is working not only to prevent any additional cuts, but to educate our political leaders about the importance of restoring funding. We believe we are making an impact.
Commonly known as food stamps, SNAP is one of the most effective and efficient programs for ending childhood hunger and helping to break the cycle of poverty. This program provides timely, targeted, and temporary benefits to low-income Americans so that they can buy groceries. In a typical month in 2014, SNAP helped more than 46.5 million low-income Americans afford a nutritionally adequate diet; nearly 70% of SNAP participants are in families with children.
Look Into Corporate Tax Subsidies and Loopholes Before 9C Cuts
Statement by Nathan Proctor, State Director of Massachusetts Fair Share. Contact at 203-522-3860.
"Facing yet another revenue shortfall and unexpected cuts, lawmakers have difficult decisions to make. But among them is an easy one: let's address the rising cost of corporate tax subsidies and tax loopholes.
"Today, the Massachusetts Budget and Policy Center released a new study which details how the cost to the state from special business tax break spending has nearly tripled since 1996. Adjusting for inflation, the price tag has skyrocketed from $370 million in 1996 to over $1 billion in the current fiscal year. Much of these tax breaks occur with no accountability to make sure that this money is being spent wisely.
"We also know that offshore tax loopholes put a further drain on the state budget, by allowing companies to book profits to offshore tax havens and avoid taxes.
"As corporate tax subsidies increase, that income has to come from somewhere. Will it be funding early education? Will we continue to underfund public transportation? We have real issues to address in the state and we can't afford to allow $1 billion in subsidies with hardly any accountability.
"The public has a right to know where this money is going and whether its an effective and efficient use of our dollars. Before we cut critical programs like early education or transportation we should make sure that our corporate tax expenditures offer a meaningful public benefit to the people of Massachusetts.
"We can also lessen the budget shortfall by closing loopholes. We can close a loophole that allows companies to hide profits in places like the Cayman Islands that levy little to no tax. Local businesses aren’t setting up foreign subsidiaries to skirt tax codes, they’re paying their fair share for the services we all benefit from.
"If we want to make progress as a state everyone needs to do their part. It's time for our lawmakers at every level to get serious about corporate tax breaks and corporate tax loopholes."
Study: Offshore Corporate Cash Stockpile Up to $2.5 Trillion
73% of Fortune 500 Companies used tax havens in 2015, dodging $717.8 billion in federal taxes in the process.
A new report, "Offshore Shell Games," by the U.S. PIRG Education Fund, Citizens for Tax Justice and the Institute on Taxation and Economic Policy details how these companies hoard cash offshore. Collectively, multinationals reported booking $2.5 trillion offshore, with just 30 companies accounting for 66 percent of this total.
The cost to the tax payer is huge, with nearly $718 billion in dodged taxes.
There is a real cost to our communities when we allow a set of companies to play by different rules when it comes to taxes. It’s time for everyone to pay what they owe.
Some of the key findings in the report include:
- 367 Fortune 500 companies collectively maintain 10,366 tax haven subsidiaries. The 30 companies with the most money booked offshore for tax purposes collectively operate 2,509 tax haven subsidiaries.
- 58 percent of companies with any tax haven subsidiaries registered at least one in Bermuda or the Cayman Islands, countries with no corporate tax. The profits that American multinationals collectively claim to earn in these island nations totals 1,884 percent and 1,313 percent, respectively of each country’s entire yearly economic output, an impossible feat.
- The 30 companies with the most money booked offshore for tax purposes collectively hold nearly $1.65 trillion overseas. That is 66 percent of the nearly $2.5 trillion that Fortune 500 companies together report holding offshore.
- Only 58 Fortune 500 companies disclose what they would expect to pay in U.S. taxes if these profits were not officially booked offshore. In total, these 58 companies would owe $212 billion in additional federal taxes, which is about 29 times the entire state budget of Iowa. The average tax rate the 58 companies currently pay to other countries on this income is a mere 6.2 percent, implying that most of it is booked to tax havens.