Congress could, if it chose to, vote today to repeal the mindless across-the-board budget cuts known as the sequester and at the same time close loopholes corporations use to escape paying taxes, ensuring that we have the resources to put the American economy back on track while ending incentives for sending American jobs overseas.
That’s what a bill introduced by Reps. Rosa DeLauro (D-Conn.) and Lloyd Doggett (D-Texas) would do. “The Sequester Delay and Stop Tax Haven Abuse Act” would end the manufactured crisis known as the sequester in 2014 and 2015, and remove $38.6 billion worth of sequester cuts in 2016 – all together around $220 billion – by closing corporate loopholes that allow companies to keep their profits overseas and out of American tax coffers.
This bill corresponds with Sen. Carl Levin’s (D-Mich.) “Stop Tax Haven Abuse Act”, raising the $220 billion that was removed by the sequester and investing it back in American jobs, preventing the cuts that hurt the economy in 2013 from doing so again in the next two years. Both of these bills are related to a letter to Congress signed by the Campaign for America’s Future and 40 other organizations in September titled “Principles for Debate on the Budget and the Economy.”
The sequester was supposed to be a federal spending cut that was so disastrous that neither side would be willing to accept the cuts. This awkward tool does not distinguish between critical functions and wasteful spending, and ending this policy would immediately help the American economy by increasing economic growth by 0.6 percent and adding an estimated 800,000 jobs, according to the Congressional Budget Office. The anticipation that the sequester would remain in effect is already hurting the United States’ projected growth, with the International Monetary Fund revising their prediction of GDP growth for 2014 down by 0.2 percent in October.
While Republicans, particularly those in the extremist “tea-party” wing, now embrace the sequester as a “victory” for shrinking government and are pushing to turn the screws even tighter, they have refused to look at ways to raise revenue. The U.S. misses out on an estimated $100 billion a year by allowing companies to keep an estimated $2 trillion dollars offshore. Ending the practice of allowing companies to shift profits (along with jobs) overseas should be an easy one for Americans to get behind without cutting American jobs, yet it has not been presented in the Republican House. The DeLauro-Doggett bill would be a step in limiting the incentives for this practice to continue.
Despite the corporate tax rate being set at 35 percent, many of America’s largest companies paid nothing in taxes in 2011, including General Electric, Verizon, DuPont, Boeing, Wells Fargo and Corning. Corporations are taking advantage of tax loopholes that allow them to pay less in taxes in a year than you do on every paycheck. Allowing the sequester cuts to continue is not just akin to taking the food out of people’s mouths, it literally does just that, by preventing programs like Meals on Wheels from reaching America’s neediest populations.
Americans ought to get behind this bill to get the economy back on track. Before this round of budget negotiations is through, and the GOP tries once again to hold the economy hostage for more cuts to the social safety net, the Sequester Delay and Stop Tax Haven Abuse Act should be an example of what can occur when we stop believing that corporations, who are people (my friend), ought to be allowed to claim the advantages of people without assuming the responsibilities of corporate citizenship.