Source: United States House of Representatives – Congressman Lloyd Doggett (D-TX)
UNITED STATES CONGRESS
For Immediate Release
Thursday, July 2, 2020
Doggett: Kate Stotesbery, 202-494-4620
Brown: Rachael Hartford, 202-224-3978
Over 100 Lawmakers: Put the Brakes on Corporate Tax Breaks in Future Relief Legislation
Rep. Doggett and Sen. Brown are joined by Sen. Whitehouse, Reps. DeLauro & Cohen in Leading Call to Oppose Irresponsible, Costly Tax Breaks that Drive Inequality
Washington, D.C. – As this pandemic wreaks catastrophic unemployment and millions struggle to pay rent—and yet corporate lobbyists press for more windfalls—U.S. Representative Lloyd Doggett (TX) and Senator Sherrod Brown (OH) were joined by Sen. Whitehouse (RI), and Reps. DeLauro (CT) and Cohen (TN) in leading over 100 lawmakers to urge House and Senate leaders to reject wasteful corporate tax breaks in the next relief legislation, and instead work to provide assistance directly to those who need it most.
The CARES Act awarded hundreds of billions worth of business tax breaks unrelated to the coronavirus crisis over the next two years. This included one provision that delivered an average of $1.6 million to just 43,000 taxpayers earning more than a million dollars in annual income. Corporate trade associations are now lobbying to make business tax credits refundable, as well as for a number of other tax changes that would benefit large companies. The nonpartisan Congressional Budget Office (CBO) recently definitively found that aid to state and local governments is more effective at stimulating the economy than more business tax breaks.
“Because Congress is so skilled at rewarding corporate lobbies, our tax code has become more and more skewed to benefit multinationals over small businesses, the wealthy over the working poor,” said Congressman Doggett. “We must halt the misuse of this crisis as a way to secure even more special privileges and tax advantages for the powerful. The pandemic has already worsened our country’s racial and economic disparities; at the very least, new tax breaks should not be permitted to further widen the gap.”
“President Trump and Republicans in Congress have always favored Wall Street over workers, and even during a pandemic they can’t help themselves. There is no reason corporations need yet another tax break in the next relief package,” said Senator Brown. “Workers are struggling to figure out how to pay their bills, stay in their homes, and keep their families safe while Republicans are looking out for their wealthy friends. We need to invest in workers, struggling families and small businesses harmed amid COVID-19, not give more tax windfalls to corporations.”
“When Congress passed the CARES Act, Republicans insisted on over $160 billion in tax breaks for the wealthy and corporations. That’s a swindle they must not repeat,” said Senator Whitehouse. “Hedge fund managers and wealthy corporations can take care of themselves. We’ll be fighting to support working families, front-line workers, small businesses, local hospitals, and countless others facing real financial hardship.”
“As small business owners struggle to access federal loans and working people are scrambling to make ends meet and keep food on the table, special interests in Congress have massive, retroactive tax breaks—going back to 2018—for the wealthiest in our country. That is a slap in the face to families and our frontline workers, who are risking their lives every day to save our country,” said Congresswoman DeLauro. “Future coronavirus relief cannot continue on the same path as the CARES Act that included tax breaks for the wealthy, instead of programs like a Child Tax Credit that would benefit families in Connecticut and across the country. Congress must put struggling families first, rather than prioritizing the large corporations and the wealthiest among us.”
“We need to be vigilant in rejecting corporate tax breaks that widen the income gap and reward wealthy stockholders over working Americans,” said Congressman Cohen. “We need to end the hidden tax scams and address the real financial needs of people suffering through this pandemic. I’m glad that so many of our colleagues have joined with us to demand that adequate guardrails are put in place.”
For expert analysis on making business tax credits refundable and other tax cuts that have been proposed, click here, here, here, and here.
The letter has been endorsed by the following groups: AFL-CIO, AFSCME, American Federation of Teachers (AFT), Service Employees International Union (SEIU), Communication Workers of America (CWA), United Steelworkers (USW), NETWORK Lobby for Catholic Social Justice, Americans for Tax Fairness, Coalition on Human Needs, Institute on Taxation and Economic Policy, Tax March, Institute for Policy Studies – Program on Inequality, Patriotic Millionaires, Oxfam, Voices for Progress, Friends Committee for National Legislation, MomsRising, and Indivisible.
“One-hundred-plus members of Congress taking a bold and affirmative position against corporate tax cuts as a remedy to the economic crisis caused by the coronavirus pandemic shows that the failed ideology of trickle-down tax cuts is close to dead in Congress, at least among Democrats,” said Frank Clemente, executive director of Americans for Tax Fairness. “People need direct aid, generous unemployment benefits, and strong public services like education, health care and transportation, not more handouts to corporations and their wealthy executives that don’t benefit workers and communities.”
“Communities from coast to coast need more federal fiscal relief to provide health care during this pandemic, address soaring levels of need, and educate kids under staggering new circumstances,” said Amy Hanauer, director of the Institute on Taxation and Economic Policy (ITEP). “The recession is destroying state and local budgets as stores and restaurants have been forced to close down and have stopped paying wages and taxes. More tax breaks to profitable corporations is the opposite of what America needs right now. Representatives Doggett, DeLauro and Whitehouse, and Senators Brown and Whitehouse are right to push for relief to states and localities and to oppose corporate tax cuts that will leave us with fewer public resources to survive these immediate and long-term challenges.”
“With economic inequality running rampant in our country, compounded by the COVID-19 crisis, it is unconscionable to give handouts to corporations while families are suffering,” said Susan Harley, deputy director of Public Citizen’s Congress Watch division. “The 2017 tax law provides clear evidence that corporations don’t use tax giveaways to invest in their workers—instead they use them to line their own pockets. We applaud this strong showing of lawmakers from both chambers for standing up for everyday taxpayers and saying no to harmful corporate tax breaks.”
“Billionaires, banks and corporations aren’t struggling to keep a roof over their families heads and put food on the table. How could they? They’re receiving the bulk of federal aid right now,” said Tax March Executive Director Maura Quint. “So, to the Congressional Republicans and president who insist on bailing out the wealthy, more than twenty million newly unemployed Americans are depending on you to change course and prioritize them. Forget the corporate tax cuts—bolster and extend unemployment insurance and other crucial aid that working- and middle-class Americans desperately need right now.”
“American workers are the ones who need help, not large and wealthy corporations who already receive massive tax advantages unavailable to working Americans or small businesses. We should direct relief and stimulus money where it’s needed most, in the pockets of everyday Americans. Any future coronavirus relief funding should go exclusively towards protecting people, not investors in big corporations,” said Morris Pearl, Chair of the Patriotic Millionaires and former managing director at BlackRock, Inc.
For a PDF of the letter click here, or see below:
Dear Speaker Pelosi, Leader McCarthy, Leader McConnell, and Leader Schumer:
Thank you for your leadership as we work together to deliver more assistance to struggling families across the country. In addition to presenting immediate hardships, the COVID-19 pandemic has laid bare and magnified the economic inequality that existed long before the crisis. As we consider additional relief, we urge you to reject corporate tax breaks that would widen the income gap and reward wealthy shareholders instead of workers.
The Congressional Budget Office (CBO) found recently that aid to state and local governments and increased Medicare spending are far more effective at stimulating the economy than more business tax breaks. Mark Zandi, the chief economist for Moody’s Analytics similarly found that such tax breaks cost many times more than the economic activity they generate.
While small businesses and laid-off workers are struggling, the stock market is soaring, ensuring that large corporations continue to have access to capital. Those that require additional liquidity can seek assistance from the $500 billion Federal Reserve fund, which remains largely untouched. In addition, the 2017 Trump tax law already provided an enormous corporate windfall, and additional changes to tax policy have accrued favorably to corporate tax liability. While low-income workers anxiously awaited $1,200 stimulus checks, one of the tax breaks included in the CARES Act delivered an average of $1.6 million to just 43,000 taxpayers earning more than a million dollars in annual income.
Despite such generous handouts, large corporations are seeking a second helping. While Republicans continue to stand in the way of expanding refundable tax credits for working families like the Earned Income Tax Credit and Child Tax Credit, they stand ready to award refundable tax credits to large corporations. Part of why large businesses seek refundability or what they call monetizing their tax credits is because so many corporations have little or no tax liability following the historic deficit-financed giveaways they received under the Trump tax law.
In addition to pushing corporate handouts in the form of tax credits, President Trump’s economic advisor Larry Kudlow proposed slashing the already record-low corporate tax rate in half for companies that bring jobs home. Unfortunately, the Trump tax law already allows companies to pay half the U.S. rate on offshore investments and in some cases even zero. No tax break, however well targeted can beat the zero rate current loopholes already allow. Multinationals with armies of tax lawyers would be able to game such provisions to reap further windfalls.
We urge you to oppose such corporate tax breaks, which have little to do with pandemic relief and much to do with temporarily boosting the stock market and benefiting the wealthiest among us. Whether in the form of tax breaks, loans, or other federal support, any assistance to corporations must at the very least come with adequate guardrails to ensure workers benefit instead of executives and shareholders. However, our focus must be on advancing more efficient relief measures that put assistance directly into the hands of the families that need it most.