Coalition Presses Congress to Close Corporate Tax Loopholes
By Jason Bramwell
Groups in sixteen states already held or are holding events later this week to demand that Congress close corporate tax loopholes in order to help avoid more deep cuts to essential benefits and services.
The events, which are organized by Americans for Tax Fairness (ATF), a coalition of more than 325 national and state organizations, are being held in advance of the expected showdown in Congress shortly after Labor Day on budget and tax issues.
"With members of Congress back in their states this August, people are demanding that Congress stop corporate tax dodging and invest in America," ATF Campaign Manager Frank Clemente said in a written statement. "Congress faces a clear choice in September when it debates how to keep the government funded: Continue to whack away at critical services that protect our families and that are needed to grow our economy, or close gaping tax loopholes so that big corporations and the rich pay their fair share of taxes."
On August 20, the ATF released a report, The High Price of Tax Loopholes, that highlights the trade-offs between deep cuts in government services and existing corporate tax loopholes. Some of the tax loopholes cited in the report include the following:
- Letting corporations defer US taxes on their overseas income until the funds are brought back to the United States
- Allowing hedge fund managers to cut taxes on a large percentage of their income in half
- Giving subsidies to oil and gas companies that make billions in profits every year
Each of these corporate tax loopholes is paired against a cut in government benefits or services of roughly the same value – cuts that could be avoided or reversed if Congress acts to restrict special tax breaks for large corporations, according to the ATF.
The federal deficit-reduction law mandating the sequester requires $109 billion in new budget cuts starting October 1. But in two-and-a-half years of deficit-reduction deals, Congress has put in place three times as much budget cutting ($1.8 trillion) as revenue boosting ($620 billion), according to Senate Budget Committee estimates. The ATF states that all of the tax increases have come from individuals, not corporations. The Congressional Budget Office estimates that 900,000 jobs will be lost in the next year if this new round of budget cutting goes forward.
President Obama said during a speech on July 30 that he would work with Republicans to reform the corporate tax code and use the money from closing tax loopholes to fund projects aimed at creating jobs.
"Congress has been acting as though it has no choice but to slash government spending, but politicians are ignoring the fact that cuts to vital services and large job losses could be averted if some corporations were simply required to pay their fair share of taxes," Clemente said.
The list of states and cities holding events is available here. A sample of upcoming events includes the following:
- Arkansas: Arkansas Community Organizations and the American Corporation of State, County, and Municipal Employees will commemorate the fiftieth anniversary of Martin Luther King Jr.'s "I Have a Dream" speech on August 24 by marching in support of tax fairness and greater racial justice.
- Indiana: Americans for Democratic Action will host a budget forum in Goshen on August 22 that highlights the trade-offs between corporate tax dodging and Social Security and Medicare funding, and encourages senators to replace the sequester cuts with new revenues.
- Montana: The Montana Small Business Alliance and the Montana Organizing Project are sponsoring a roundtable discussion in Billings on August 23 for small business owners to explain the competitive disadvantage facing small businesses that comes from corporate tax loopholes. Local elected officials will participate.
Topics for discussion:
- Is Congress likely to take action against the companies that support their campaigns?
- Are subsidies necessary?
- Should corporations be taxed?