Republicans in Congress and the corporate-funded conservative echo chamber (redundant) are temporarily pausing from scaring people with “deficit” propaganda and are instead working on an end-of-the-year backroom deal to give out several hundred billion dollars in tax breaks that increase the deficit.
This is happening at a time when education, housing, infrastructure, and research and other things government does to make our lives better are being cut to a smaller share of the economy than any time since the government began tracking this data in 1962. Because deficits.
It’s called “tax extenders” and you should pay attention.
Create Deficits, Then Scare People With Deficits
Here is a post from an earlier deficit “crisis”: “Deficits Were On Purpose To Cause This “Crisis”,”
It was the plan. They forced these deficits on us on purpose. Reagan called it “strategic deficits.” It was a “shock doctrine” tactic, to get us to panic, and then move in with their “solutions.” So we are arguing about how much to cut out of the things We, the People do for our benefit, which the wealthy and their corporations get vastly wealthier and more powerful.
Here is how the game works:
● Pass tax cuts for the rich and corporations that increase the deficit – and inequality.
● Scare people about deficits to force cuts in things government does to make our lives better.
● Rinse and repeat.
Tax Extenders Bill
Congress is working on something called a tax extenders bill. They are renewing a bunch of tax breaks (some good, most bad) that were intended to periodically expire. This time they are making some of the breaks and loopholes permanent. The two-year cost of renewing more than 50 of these tax breaks is $96 billion. The 10-year cost of making certain business tax breaks permanent jumps to about $600 billion – $100 billion just for what two companies get for moving jobs and profits offshore.
Again: Tax breaks that encourage companies to shift profits and jobs offshore. Really?
Congress is not carefully debating each of the 50 tax breaks included in the package of extenders. They are not deciding which should be allowed to expire. Instead, Congress is deciding which of these costly corporate tax breaks should be made permanent.
The big ones: the R&D tax credit ($182 billion), Section 179 expensing ($77 billion), bonus depreciation ($281 billion), and two offshoring tax loopholes – Active Financing Exception (AFE) ($78 billion) and the CFC Look-Through Rule ($22 billion).
Tax Breaks That Encourage Companies To Shift Profits And Jobs Offshore
● The Active Financing Exception lets big corporations (primarily financial institutions such as GE Capital, Wall Street banks and insurance companies) avoid paying U.S. taxes on the financial income they (claim to) earn in foreign countries, so long as those profits remain officially offshore.
● The Controlled Foreign Corporation (CFC) Look-Through Rule (say that ten times, really fast) lets U.S. multinational corporations shift profits between foreign subsidiaries without triggering U.S. taxes that would normally be due.
39 Organizations Send Letter To Congress
On Wednesday 39 organizations sent a letter to members of Congress, saying:
● Corporate tax extenders should not be made permanent
● The Bonus Depreciation tax break and two tax breaks that encourage U.S. corporations to shift jobs and hide profits offshore (the Active Financing Exception and CFC Look Through Rule) should be allowed to expire and not be extended
● Corporate tax cuts should be paid for by closing other corporate tax loopholes
● The 2009 improvements to the Earned Income Tax Credit and Child Tax Credit should be made permanent
From the letter:
“As you vote on tax extender legislation this year, any effort to make tax cuts permanent should be reserved for only pro-worker tax credits. We do not support making any corporate tax extenders permanent. We also strongly oppose any extension of bonus depreciation and those tax extenders that encourage companies to shift jobs offshore and hide profits in tax havens (Active Financing Exception and Controlled Foreign Corporation (CFC) Look-Through Rule). …
“Renewal of any corporate tax breaks should be paid for by closing other corporate tax loopholes. Corporations have not contributed a dime to deficit reduction in recent years by repealing even one corporate tax break or loophole. Meanwhile, nearly $2.7 trillion in spending cuts are scheduled over the next 10 years. …
“It is time to end—and reverse—the double-standard whereby tax cuts for corporations are not paid for while services and other vital investments have to be paid for. …”
What You Can Do
The most important thing you can do is be aware of this and let Congress know that you are aware of this. Call your representative and senators and tell them to stop this. If they know the public is looking, they’ll take care.
You can also support making the 2009 improvements to the pro-worker and pro-family Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC) permanent. Republicans have opposed permanent status for these tax breaks needed by the families who struggle the most to pay their bills. Yet it is these tax credits that play an important role in cutting poverty and income inequality when all of us face wage stagnation – especially workers in lower-wage jobs.
Here are some fact sheets from Americans for Tax Fairness:
Again: Tax breaks that encourage companies to shift profits and jobs offshore? Really?
Again: So much for scare talk about “deficits.” That only gets dragged out to stop things that make people’s lives better.