Conservatives peddle the fiction that America has a “spending problem” and there is no need for more tax revenue. The reality is the current tax code is still rigged for the 1 percent. Many billionaires are paying lower tax rates than their secretaries. Profitable multinationals are exploiting loopholes and oversea tax dodges to avoid taxes altogether. Instead of taxing what we don’t need, like Wall Street gambling, we tax what we require, like good jobs.
The glaring flaws and gaps in the tax code are easy to spot, if the spotlight is actually put on them.
America’s number one priority is to end the jobs crisis. We need massive public investment not only to fully recover the 8 million jobs lost to the Great Recession, but to fix an economic foundation that was already disintegrating before the 2008 crash: an infrastructure that’s crumbling, a social safety net in tatters, an unsustainable dependence on fossil fuels and a public education system starved of resources, from preschool to affordable college.
Yes, there is lots of waste, fraud and abuse in the federal budget. Powerful interests rake of billions in unneeded subsidies. Perverted priorities squander too much. But even with that, we still have a revenue problem.
Fortunately, we can solve our revenue problem without kicking the middle class when it’s down or stifling the ability of businesses to create jobs. We can raise much of the revenues we need if we close wasteful loopholes, remove perverse job-killing tax incentives and fill the gaps that have allowed the richest Americans to escape contributing their fair share to America’s future.
For example, Americans for Tax Fairness proposes:
- Closing tax shelters for the wealthy, which would bring in as much as $167 billion a year.
- Ending the ability of U.S. corporations to delay paying taxes on foreign profits, which would save $61 billion a year.
- Terminating destructive corporate tax breaks, including those regarding executive compensation, stock options and fossil fuel production; that would raise $16 billion a year.
- Taxing Wall Street trading to discourage reckless speculation, which would produce $35 billion a year.
- Placing a surtax on income above $1 million, which would collect $45 billion a year.
These proposals would begin to close the loopholes in the tax code that serve to benefit the wealthiest American households that do not need the help.
We need a fair tax code so we can rebuild America, put people back to work and make investments vital to America’s future.
In the two years after the 2008 financial crash, the multimillionaires in the top 1 percent saw their average incomes rise 11 percent while the average income of everybody else shrank. Stunningly, American inequality is worse today than it was in 1774, even when you factor in slavery, according to new research from Harvard and the University of California.
We don’t need a tax code that fosters staggering inequality and shifts more of the burden of paying for government services onto the shoulders of working families. Instead, the corporations and individuals who have profited the most from all that government provides should be paying their fair share.
These tax reforms would also help generate jobs here at home. A financial speculation tax would help reduce the Wall Street gambling that helped blow up the economy. Ending incentives for outsourcing would help deter companies from moving jobs abroad.
They say: We already raised taxes on the rich. Now it is time to address the real problem: spending.
We say: Since 2011, the president and Congress have locked in more than $2 trillion in deficit reduction, with more than two-thirds of that from spending cuts. We’ve cut deeply enough – in fact, too deep – and more austerity would kill jobs. The fact is we have a revenue problem. Many billionaires are paying lower tax rates than their secretaries. Profitable multinationals are exploiting loopholes and oversea tax dodges to avoid taxes altogether. We aren’t raising enough revenue to invest in what we need to grow: jobs, infrastructure, education and homegrown clean energy.
They say: We can’t punish success. It will destroy the incentives for job creators to invest in America’s growth.
We say: We applied that conservative logic during the Bush presidency, slashing taxes on the wealthy. We waited for the jobs to come. They never did. The Wall Street Journal found the Bush record on jobs was the “worst on record.” We didn’t get jobs. We got growing inequality, a declining middle class, and the biggest economic downturn since the Great Depression. It’s time to go back to what works: a fair tax code that funds the investments we need to rebuild America and put people back to work.
They say: 47 percent of Americans don’t pay any federal income tax. We don’t need to further burden the successful. We need everyone to contribute.
We say: Now we know the truth. Conservatives don’t want to cut taxes for everybody. Conservatives only want to cut taxes for the rich and raise them for the poor. In fact, every working American pays taxes – payroll taxes, sales taxes, state and local taxes. Middle-class Americans are paying taxes at a higher rate than billionaires. Small businesses pay at a higher rate than multinationals that hide profits abroad. It’s not the poor who have gamed the tax code; it’s the rich and the powerful. Tax reform starts at the top.
For every dollar in new revenue raised through tax increases since 2011, we’ve cut $2.50 out of federal government programs: $1.5 trillion in spending cuts versus $600 billion in tax increases. (Center for Budget and Policy Priorities)
The top 1 percent of households saw their average federal tax rate fall 17 percent between 1979 and 2009. (Congressional Budget Office)
Corporations are paying a fourth of what they paid 60 years ago as a share of federal revenues. That means the rest of us pay more. (Americans for Tax Fairness )
Federal taxes as a share of the total economy haven’t been this low since 1950. The last time we had a balanced budget (1998-2001), revenues were 20 percent of gross domestic product; now revenues are just 15.4 percent of GDP. (Ezra Klen, The Washington Post, via Americans for Tax Fairness)
Even after the fiscal cliff deal, 66 percent of voters say the richest 2 percent should pay higher taxes. Only 9 percent say they should pay less. (Hart Research Associates for Americans for Tax Fairness)
More than three out of four respondents agree that federal budget deficits should be addressed through a combination of tax increases and budget cuts. Only 19 percent agree with the Republican leadership position that the deficit should be reduced by budget cuts alone. (Pew Research Center)
64 percent of voters say that large corporations should pay more in taxes. (Hart Research Associates for Americans for Tax Fairness)
66 percent of voters say revenue from closing loopholes should go toward public investments and deficit reduction. Only 23 percent say revenue from closing loopholes to go toward paying for lower tax rates. (Hart Research Associates for Americans for Tax Fairness)