Tax Day 2019: It’s Time to Release the Returns, Repeal the Tax Scam, and Reinvest in America
It’s Tax Day again, when we all come together to chip in our fair share toward the cost of government. That is—except for the tax cheats and corporations so adept at wiggling out of their tax bills they pay $0, or worse, get a refund check from Uncle Sam. Big name companies like Netflix, Amazon, IBM, and GM are just tip of the iceberg when it comes to large, profitable corporations that paid no taxes or got money back from the government last year.
The need for a real tax code overhaul has never been greater, especially since the partisan tax giveaway package that was rushed through the process without hearings or proper input from the public. It was the product of K Street lobbying, with Public Citizen research showing that more than 60 percent of the D.C. lobby corps tried to influence the tax package—more than 7,000 individual lobbyists.
President Trump and the GOP made a lot of false promises about the 2017 tax giveaway package—which voters rightly saw as a scam, and it remains very unpopular to this day. It’s no surprise since the tax cut legislation has done much to enrich wealthy shareholders, corporate CEOs and Wall Street bankers and while average Americans have felt little assistance from the changes. And, the hole in the budget these tax cuts are already leaving will lead to declining services for families that are suffering and fewer health care dollars for seniors and others who need care.
Before we get to next year’s Tax Day, we need to do three things: release Trump’s tax returns, repeal the provisions of the 2017 tax giveaway bill that enriched the wealthy and corporations, and redesign the tax code in a way the will create new revenues to reinvest in American communities.
Release the Returns
Public Citizen’s members and supporters, have been clamoring for the release of Trump’s tax returns since he first announced his candidacy for office, including countless activists participating in Tax March events across the country two years ago. Yet, Trump has refused to disclose his tax information. This, despite decades of precedent set by his predecessors.
That’s why we were so pleased that the text of H.R. 1, the For the People Act –the sweeping ethics, campaign finance and voting rights reform package made it clear that future presidential and vice-presidential candidates and office holders will be required by law to disclose tax information moving forward, including business and individual income tax returns. Even though HR 1 passed with overwhelming support in the House last month, we must not be made to wait until the For the People Act is signed into law to determine how his tax policy maneuvers have personally benefited the president.
The Ways and Means Committee Chair Richard Neal (D-Mass.) recently, after much deliberation, used the power granted to the committee under Sec. 6103(f)(1) of the Internal Revenue Code to request the past six years of President Trump’s personal and some of his business tax returns from the Secretary of the U.S. Treasury Department. The letter of the law is clear: It says that the Treasury Secretary shall furnish the returns to the Committee upon written request. There is no wiggle room.
Yet the first deadline set by Chairman Neal came and went without Sec. Mnuchin having provided the returns. That is inexcusable. Now Chairman Neal has more than generously provided a new deadline of April 23. However, it’s outrageous Treasury did not meet the first deadline– so Public Citizen is joining allies for a rally today at 5pm outside of the IRS to demand that they not take any additional time but that they release the returns now!
The Ways and Means Committee needs Trump’s tax return information to perform proper oversight into exactly how much he personally financially gained by pushing for specific tax changes and signing the 2017 bill into law. Most of Trump’s hundreds of businesses are organized as limited liability companies (LLCs) and those types of entities received an extremely generous new deduction. Not to mention the need for oversight into the many questions about the president’s possible financial connections to Russia and other foreign powers that may have influenced policy decisions. Also, with oversight authority over the Internal Revenue Service, the Ways and Means Committee must investigate whether the agency has been properly auditing the president.
As much as Trump and his administration appear to be digging their heels in on not releasing the returns,
To quote @AOC – Congress didn’t ask you.
Congress: “We’re going to need a copy of the President’s tax returns from 2013-2018.”
45: “No, I’m ‘under audit.’ ”
Congress: “We didn’t ask you.”
— Alexandria Ocasio-Cortez (@AOC) April 3, 2019
Repeal Tax Giveaways to the Rich and Corporations
As a basic matter, we must repeal the 2017 tax cut legislation that showered millionaires and billionaires with ridiculous handouts, while adding nearly $2 trillion to the deficit. The legislation included huge giveaways for corporations and also worsened the unfair tax advantages that multinational companies have over Main Street businesses by giving provisions like an extra 50% off coupon to multinational corporations that book profits to offshore subsidiaries. And, Big Banks got huge tax windfalls at the same time that they are raking in record profits.
Yet, how did these companies use that extra money? By spending more than 140 times as much on buying back their own stock than on increasing wages for workers. We need to fix that by increasing the tax rate for corporations and closing loopholes that benefit Wall Street investors and high-paid CEOs over average Americans. We should also discourage outsourcing of jobs and investment by taxing profits at least at the same rate when they are earned by foreign subsidiaries, while making sure they don’t “invert” and re-incorporate in low tax countries.
Reinvest in American Communities
Public Education, health care for seniors and low income individuals, aid for the less physically and mentally able, providing nutrition assistance to the hungry, rebuilding roads and water pipes, tackling climate change and growing green jobs– the list of communities’ needed investments is endless. As time goes by, these needs are only going to increase. Corporations and banks used to pull more of their weight when it comes to taxes, they must pick up the slack. And, by asking the very wealthy to pay more of their fair share, we will have more money to give a hand up to those who need it most.
We can do this by taxing the wealth of millionaires and billionaires, by strengthening the estate tax, and increasing the marginal tax rates for the richest among us. At the same time, a small tax on Wall Street trades of 10 cents per $100 traded could create $777 billion in new revenues over the next decade, repaying America for crashing the economy while calming the markets by tamping down risky high-speed trading. Combined, new tax progressive policies could create trillions in new revenues that could be reinvested in our communities. Instead of turning our back on hard-hit areas, we need to create equal opportunity and provide a level playing field for all Americans.
But, once we fill all of the loopholes and otherwise strengthen the code, we will need equally strong enforcement. Right now, the Internal Revenue Service (IRS) is an over-politicized and under-resourced agency, and it is focused in the wrong direction. We also need to make paying taxes as easy as possible by having IRS have its own free-file program and by using return-free filing, like Sen. Elizabeth Warren (D-Mass.) has proposed. Also, audits and other enforcement by the IRS should concentrate more on big-money taxpayers and corporations to maximize the agency’s bang for the buck. And, the job of the IRS also has an impact on our democracy since it oversees tax status of nonprofits, and it must provide clear rules regarding political activity. That’s a lot of work on an agency that has seen steep cuts to its budget over recent years.
The first step toward a fairer tax code is getting Trump’s tax returns so Congress has all of the information it needs for accountability including investigations into who benefited the most from the 2017 tax changes, specifically one supposedly wealthy owner of real estate businesses. Then, Congress needs to go back to square one so that the American people can properly weigh in as our nation’s leaders take the time needed to properly craft a more progressive tax code that benefits everyone not just a privileged few