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Tax Day 2019: It’s Time to Release the Returns, Repeal the Tax Scam, and Reinvest in America

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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.

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

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Letting Dirty Trucks Glide Past Pollution Protections

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The White House agency in charge of reviewing regulations, the U.S. Office of Information and Regulatory Affairs (OIRA), conspired with the U.S. Environmental Protection Agency (EPA) to circumvent important rulemaking requirements – and ram through a deregulatory giveaway to “glider” trucks, which are super-polluting diesel freight trucks created by dropping old, dirty truck engines into new truck bodies. If allowed to go forward, this loophole for the trucking industry will pollute our air and harm children’s health.

The story begins several years ago when, under the Obama administration, the EPA applied its new, cleaner emissions standards to glider trucks. When the Trump administration took power, former EPA Administrator Scott Pruitt attempted to exempt glider trucks from the Obama era emission standards as a handout to the industry that makes them. The EPA’s Inspector General (IG) is already investigating the EPA’s role in this tawdry tale, but new reporting makes clear that the White House’s role in this incident needs to be investigated as well.

When Public Citizen examined the glider truck carve-out, we discovered potential manipulation of the EPA’s rulemaking process, as outlined in testimony to the EPA’s scientific advisory board in 2018, before the IG investigation was requested. From documents publicly available at the time, we found that the EPA intentionally avoided conducting certain analyses to conceal the harmful health impacts of allowing dirtier emissions from glider trucks, especially on children.

U.S. Senate Democrats on the Environment and Public Works Committee reached a similar conclusion in December 2018 and requested that the EPA’s IG investigate the agency’s process for repealing cleaner emissions standards for glider trucks.

Now, newly released documents show that EPA’s IG is almost certain to confirm our suspicions: that the agency knowingly refused to do numerous analyses on the harmful impacts of its carve-out for glider trucks that normally are required when taking this type of regulatory action.

Usually, an agency’s attempt to skirt analytical requirements runs into problems when the regulation is sent to OIRA, the small office in the White House that is tasked with reviewing and approving certain regulations and their accompanying analyses.

But the new documents show that OIRA acted as an accomplice, helping the EPA flout the analytical requirements. In fact, it looks like OIRA deliberately fast-tracked the glider trucks carve-out by allowing the EPA to bypass analyses that are required for exemptions from new emissions standards.

A few weeks ago, a Bloomberg Law reporter broke the story that former EPA head Pruitt received a handwritten letter from a former Republican congresswoman from Tennessee asking for the glider carve-out. One of the largest glider truck manufacturers is based in her district.

The story, based on EPA documents obtained by the reporter through a Freedom of Information Act request, confirmed strong suspicions that the EPA was lowering the emissions standards for glider trucks as a political favor to the congresswoman and the glider manufacturer.

Buried within the hundreds of pages of documents were emails from staff at both the EPA and OIRA showing both agencies colluding to rush through the glider truck carve-out by skipping the required analyses.

OIRA was created under President Ronald Reagan to review and approve the most important and impactful regulations from federal agencies. But since its founding, OIRA generally has opposed strong regulations that protect the public while favoring deregulation.

This incident is just the latest example.

The reason the EPA sent its glider trucks carve-out to OIRA in the first place is because the regulation was classified as an “economically significant” regulation. In other words, the EPA (correctly) believed that the regulation would have major economic impacts. Such rules have to be reviewed by OIRA.

When a rulemaking is classified as “economically significant,” in addition to putting it under OIRA review, it also normally triggers a requirement to assess its potential costs and benefits. And when it’s a rulemaking from the EPA, this designation also triggers the requirement to look at the public health impacts on children and minorities. All of these analyses ultimately would need to be reviewed by OIRA as it does its review of a rule.

Yet the EPA sent OIRA the glider truck rulemaking without any of the required analyses. In fact, the regulation had virtually no evidence to support it. Moreover, the EPA did nothing to refute its earlier findings from the Obama administration that exempting glider trucks from clean air standards would lead to enormous amounts of harmful pollution that would negatively impact vulnerable populations.

Normally, OIRA would have rejected the regulation and told the EPA to do the supporting analyses before allowing the EPA even to propose the rulemaking. Under the Obama administration, OIRA never hesitated to hold up regulations, often for years, while it insisted agencies provide more information and analyses to justify regulations.

As emails between the EPA and OIRA show, OIRA allowed the EPA to change the designation of the glider truck regulation from “economically significant” to merely “significant” to let the EPA propose the carve-out without having to do the various analyses required of “economically significant” rules.

This was the very last change the EPA made to the regulation before OIRA ended its review of the regulation and approved EPA to propose it publicly. OIRA wanted the change in order to cover its tracks, since leaving the regulation as “economically significant” would have led to questions as to why the typical analyses that accompany “economically significant” regulations had not been done by EPA.

One of the email subject lines from an EPA staffer reads, “RE: last minute significance change request from OMB.” While the content of the email is redacted, the subject line clearly indicates that OIRA (housed within OMB) requested that the EPA change the significance designation of the regulation.

Subsequent emails dispel any doubt that this occurred.

One email from an EPA staffer to other high-level EPA political appointees reads, “we just received word from OMB that they have cleared the Glider NPRM (with the change from “economically significant” to “significant”).” In other words, OMB cleared the change in the rulemaking’s designation from “economically significant” to “significant.”

Another internal EPA email makes clear that OMB requested the change, “…given that OMB was the one proposing the change be made from ‘economically significant’ to ‘significant…’”

Interestingly, this email chain also contained an email from an EPA career staffer with the subject line, “Why the draft glider repeal NPRM is Economically Significant.” This indicates that the EPA’s career staff believed the proper classification for the glider truck exemption would be an “economically significant” regulation.

These emails should lead the EPA’s IG to conclude that agency violated basic requirements in the regulatory process in trying to exempt glider trucks from pollution standards. With OIRA’s help, the EPA deliberately mischaracterized its carve-out for glider trucks to make it look like it was complying with requirements in the rulemaking process, when in fact it was not.

This raises profound concerns about the integrity of both the EPA’s rulemaking process, which already has come under close scrutiny due to numerous lapses under the Trump administration, as well as the integrity of OIRA’s regulatory review process.

A top to bottom audit of the EPA’s rulemaking process and OIRA’s regulatory review process might reveal that this incident is just the tip of the iceberg.

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What’s Going on with the Mueller Report?

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One of the defining qualities of Special Counsel Robert Mueller’s investigation of Russian interreference in the 2016 presidential election was the absence of internal leaks. (Mueller’s team primarily communicated their case by releasing unusually detailed indictments and charging documents.)

So when news came out that the report was finished, anticipation was exceptionally high. Last Sunday, Attorney General William Barr released a 4 page “summary” of the over 400-page report. President Donald Trump and his defenders instantly began describing it as a “total exoneration”, despite the fact that the summary and report specifically state that it “does not exonerate him.” This bit of cognitive dissonance was followed by Barr claiming this his “summary” was not a “summary.” All of this was too much for some members of the Mueller team and stories began emerging that Mueller had already provided his own written summary that was bypassed for Barr’s version which was they said gave a deceptive impression.

The public deserves to see the full report for a number of reasons and the Trump administration’s absurd handling of it so far only adds to the arguments. This was the background for the 330 rallies nationwide that Public Citizen, MoveOn, Indivisible and others in the Trump is Not Above the Law coalition organized on Thursday demanding the full release of the report.

At the flagship event in front of the White House, Public Citizen’s Lisa Gilbert was joined by a number of speakers, including U.S. Senator Richard Blumenthal and U.S. House Judiciary Chairman Jerrold Nadler. Nadler’s played a key role in the proceedings, including recently receiving authorization for a subpoena for the report. Nadler was received as a folk hero at the event, best captured by the spontaneous chant of “thank you” that broke out while he was on stage. You can watch a full video of the event here.

Activist pressure has already proved very consequential in this process. It’s important not to lose sight of the fact that Mueller was able to finish his investigation even though Trump threatened its very existence innumerable times. The pressure of the massive number of people that got involved in the Trump is Not Above the Law effort clearly played a significant part in the calculation.

We must keep up the pressure until we have the full report.  You can help by calling Ranking Member of the U.S. House Judiciary Committee Doug Collins at 202 225-9893. Tell him that the public paid for the Mueller investigation and we deserve the full story about Russian interference in our election.

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The American People Deserve a Clean Budget That Protects the Public 

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The scandal over cutting Special Olympics funding and the subsequent walk back has been trending in the news for good reason: it shows the depths that the administration will shamelessly sink to in harming marginalized communities. President Trump may have since walked back the originally planned cuts, but that the proposal made it into the budget in the first place is telling. That’s far from the only example of abject cruelty in the Trump budget, however; for additional examples, look no further than the other provisions of the president’s proposed budget for FY2020. The proposed budget would make deep cuts to the social safety net and earned benefits, while funding a wasteful and racist wall at the border and slashing funds for environmental protections and other measures that protect Americans.

Here are some of the worst features of the Trump Budget:

  • Hundreds of billions of dollars in cuts to Americans’ earned benefits—chiefly, Medicaid, Medicare, and Social Security disability insurance—which millions of Americans rely on for their basic health and well-being;
  • Massive cuts in the student loan program, despite the crisis levels of debt students and recent graduates already face;
  • Deep decreases in funding for social programs such as Temporary Assistance for Needy Families, the Supplemental Nutrition Assistance Program, Section 8 housing vouchers, Head Start, and other crucial services;
  • $8.6 billion in funding for the construction of a racist southern border wall that will imperil the natural habitat along the Rio Grande river and cost long-time families their homes, in addition to the billions of dollars the president recently chose to appropriate for the wall under the guise of a sham National Emergency, which Public Citizen is fighting in court on behalf of the Frontera Audubon Society and three plaintiffs among our members from Texas.

It is often said that a president’s budget is a “statement of priorities.” Frequently, the administration’s proposed budget is little more than a wish-list that will bear little resemblance to the ultimate funding package upon which Trump and Congress will (hopefully) agree in order to avoid another shutdown. Congress still needs to pass the actual appropriations bills, and in addition to advocating to oppose these types of dangerous proposed cuts to agency funding, we also need to ensure that the budget process is not hijacked for partisan purposes.  

All too often in recent years, Congress’ role in the budget process has been abused to enact dangerous, unpopular policies that harm the public. By inserting “poison pill” policy riders into must-pass appropriations bills, some members of Congress routinely push forward policies that would damage Americans’ health, wealth, and environment.

That’s why the Clean Budget Coalition is calling on Congress to pass a budget that does not abuse the budget process to roll back public protections. The Coalition’s demand is simple: no appropriations measures should move forward if they contain poison pill riders that go against the public interest.

Poison pill riders are unpopular and dangerous. The American people support policies that ensure social and economic justice, protect workplaces and the environment, promote access to justice and fair housing, protect consumers from corporate wrongdoing, protect human and civil rights including the rights of immigrants, and guarantee access to vital health care services including comprehensive reproductive healthcare. Our budget should reflect these priorities, and should certainly not include any measures that go against them. The Clean Budget Coalition calls for Congress to remove any poison pill riders that would undo any of these protections.

What the American people need is not a government budget filled with deep cuts to healthcare, badly needed social programs and retirement benefits. It’s not a racist, environmentally destructive wall. It’s also not a budget that is used to sneak bad policies through the congressional backdoor—policies that would never pass on their own due to their harmful nature. What Americans do need is a budget that recognizes and affirms the people’s right to a clean environment, comprehensive healthcare, and economic, civil, and social justice. Congress must act to ensure that, and not the cruel and shameful document put forth by the administration, is the kind of appropriations package that is ultimately agreed upon. And, they must stand strong with the American people to demand a clean budget, free from poison pill riders that harm the public interest.

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Manafort Sentencing Underscores the Need for Transparent Results of Mueller Probe

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During former Trump campaign chairman Paul Manafort’s sentencing hearing in federal court on Wednesday, his lawyers made a peculiar point: had it not been for Special Counsel Robert Mueller III’s investigation into Russian meddling in the 2016 election and the possibility of the Trump campaign’s cooperation or President Trump’s obstruction of justice, Manafort’s many crimes—his financial crimes, as well as his unregistered lobbying , his conspiracy to obstruct justice, and his conspiracy against the United States exemplified by his sharing of polling data during the campaign with Russian associate Konstantin Kilminik—would likely have never been discovered.

Judge Amy Berman Jackson in the Washington, D.C. District Court did not find the argument convincing in the way Manafort’s attorneys had intended—to argue for lessened sentencing. But the lawyers were absolutely correct that the public would likely know little to nothing about the crimes of Manafort and other associates of the Trump 2016 campaign were it not for the Mueller probe. Unintentionally, these lawyers effectively made the case that the special counsel’s investigation has been invaluable in helping the American public understand what happened in the attack on our elections, and that therefore we have a right to know the full extent of Mueller’s findings.

At present, the Mueller investigation has led to indictments and/or plea deals from 37 known defendants—including Manafort, as well as Trump’s former personal lawyer Michel Cohen, his former campaign aides George Papadopoulos and Rick Gates, his former national security advisor Michael Flynn, and his longtime adviser Roger Stone. This has resulted in at least 199 criminal charges and five prison sentences already. The amount of criminal activity that the Mueller probe has uncovered and brought into public awareness is staggering.

It is clear that the special counsel’s office has been extremely effective in rooting out evidence of attacks made against the United States electoral system in the 2016 election as well as a number of other crimes. It is also clear based on what the public already knows about Mueller’s findings that the assault on our electoral system was massive, and we, the taxpayers who have funded the investigation, deserve to know the full scope of its findings. This, of course, may include evidence of whether or not our president knew about or took part in that assault, or acted to obstruct justice in covering it up—information which is absolutely critical for ensuring that our citizens feel they can trust our government.

Despite this, the president’s recently Senate-approved Attorney General, Bill Barr, has declined to commit to release the special counsel’s final conclusions in full to Congress and the public. Barr’s shakiness on this matter is not only morally indefensible—it is also deeply unpopular.

A recent poll shows that 81 percent of the public, including strong majorities of both Democrats and Republicans, support the public release of Mueller’s report. Thankfully, it appears that our members of Congress are listening to this public demand—today, a resolution to demand transparency on any final report made by the special counsel passed through the U.S. House of Representatives by a vote of 420-0. The implications are clear: the public deserves to know everything that the Mueller probe has turned up.

Now it falls to the Senate to respond to the immense demand of the American people. While Senate Majority Leader Mitch McConnell has obstructed previous efforts to protect the Mueller investigation, it is essential that he allow a vote on public transparency of Mueller’s findings. The Senate must vote on and pass the bipartisan Special Counsel Transparency Act introduced by Senators Blumenthal and Grassley.

Americans deserve to understand the details of Mueller’s findings without presidential spin. We deserve to know about the full scale of the assault on our electoral system, including details of President Trump’s possible criminal activity. We need to feel assured that in the United States, no one is above the law.

 

Photo Credit: Flickr user DonkeyHotey
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