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Category: Press Release

ATF ACTION FUND APPLAUDS TAX REFORM PLAN BY PRESIDENTIAL CANDIDATE SETH MOULTON

Comprehensive Proposal is ‘Solid, Progressive Alternative’ to GOP Tax Cuts for Wealthy

WASHINGTON, D.C. – Americans for Tax Fairness Action Fund (ATFAF) today praised a major progressive tax reform proposal by Democratic presidential candidate Rep. Seth Moulton (D-MA) as a “solid, progressive alternative” to the Trump-GOP tax cuts, which mostly benefited the wealthy and big corporations. Moulton estimates his plan would raise $2.8 trillion over 10 years—largely by requiring the wealthy and corporations to pay a fairer share of taxes—whereas the Trump-GOP tax cuts cost $1.9 trillion.

Frank Clemente, executive director of ATFAF, said Moulton is the first candidate to offer a detailed plan to repeal key parts of the Tax Cuts and Jobs Act of 2017 (TCJA) benefiting the well-off, corporations and businesses. Instead, he proposes reforms that would reward work over wealth, raise trillions in needed revenue for critical services and create a fairer tax system. He said Moulton’s plan corresponds to many reform options included in a report by Americans for Tax Fairness, a sister organization to AFTAF: Tax Fairness Now: Revenue Options for a Fair Tax System released in April.

“Rep. Moulton deserves credit for acting to remedy the unfairness of the Trump-GOP tax scam that has handed huge tax cuts to the wealthy and big corporations,” Clemente said. “His plan would begin to create a fairer tax code that is now rigged in favor of the wealthy and powerful. It would demand more from the most fortunate, close loopholes and begin to create an economy that works for everyone – not just the privileged few.”

Included in Moulton’s plan are proposals to:

  • Increase the Corporate Tax Rate to 25%. The TCJA decreased the corporate tax rate from 35% to 21%. Increasing it slightly to 25% would raise more than $350 billion over 10 years. ATFAF believes the corporate tax rate should be higher still and that the tax rate on offshore profits, which is about half the 21% rate, should be increased to match the domestic rate.
  • Equate the Rates. By eliminating the difference between the tax rate on long term capital gains and ordinary income, Moulton takes a major step towards taxing income from investments at the same rate as income from wages and salaries. Investment income largely flows to the richest 1%.
  • End Tax Shelters. The plan would “move the corporate tax rate to a per-country minimum on worldwide income.” This is an important step to limit profit shifting to tax havens and other low-tax countries by large corporations.
  • Reform the Estate Tax. The plan returns the threshold at which estate taxes are assessed to the 2009 levels of $3.5 million for an individual and $7 million for couples. This level would affect fewer than 2 out of every 1,000 estates. Also, importantly the plan eliminates step-up in basis that allows taxpayers to avoid paying any taxes on the growth in value of assets such as stocks if they are passed on to heirs of estates before they are sold.
  • End the Pass-through Deduction. The TCJA created a new loophole that allows owners of most pass-through businesses to exclude 20% of their business income from taxation—effectively lowering the top tax rate to as low as 29.6%, from 37%. Sold by President Trump and the GOP as a small business tax cut, three-fifths of the value of this tax break will go to the richest 1% of business owners by 2024, such as real estate moguls like Trump.
  • Close Tax Loopholes. Included are the carried interest and real estate loopholes that allow the wealthy to pay a lower tax rate than many working families.
  • Step up Tax Enforcement. The plan would spend an extra $2 billion a year to beef up the IRS audit staff to target tax avoidance by wealthier taxpayers.

Moulton did not say how he would spend the nearly $3 trillion in new revenue he estimates his plan would raise but suggested it could provide greater health care coverage for more Americans, increase education funding, address climate change or other pressing needs.

Clemente emphasized that ATFAF is not endorsing the Moulton plan or any candidate in the 2020 race.  “But I hope other candidates who have not yet proposed major progressive tax reforms will take notice of Moulton’s sensible proposal and offer their own ambitious plans,” he said. “Polls consistently show that most Americans view the Trump-GOP tax cuts unfavorably, because they have not seen much of a tax cut and they correctly believe that the law largely favored the rich and corporations. Voters are ready for change and more than that they are ready for a tax system that’s fair to everyone, not the one we have that mostly benefits the wealthy and big corporations.”

Contact:
Dennis Bailey
Director of Communications
Americans for Tax Fairness
202.733.3444
dbailey@americansfortaxfairness.org

TALKING TAXES: NEW WEBSITE TRACKS TAX PLANS OF DEMOCRATIC PRESIDENTIAL CANDIDATES

Candidates Back Nearly 100 Proposals for Progressive Tax Reform

and Explain How They Would Invest the Added Revenue

WASHINGTON, D.C. – As the first Democratic presidential debates get underway this week, Americans for Tax Fairness Action Fund today launched a website detailing the tax plans or proposals of each candidate. Wealth taxes, higher capital gains taxes, stronger estate taxes, higher corporate tax rates, financial transaction and carbon taxes, and EITC and Child Tax Credit expansions are among the reforms detailed on the website, broken down by candidate and type of tax.

A one-page summary of the candidates’ major positions is available here.

In many cases the tax proposal is accompanied by an explanation of how the candidate intends to use the additional revenue, such as for improved healthcare, education, infrastructure and environmental protection.

“It’s surprising that this early in the 2020 race tax policy is emerging as a key issue and a defining one for Democrats,” said Frank Clemente, executive director of Americans for Tax Fairness Action Fund. “The utter failure of the Trump-GOP tax cuts to live up to the promises of more jobs and higher wages has given the candidates an opening to propose major tax increases as part of their campaign platforms. Virtually all candidates are saying they want to repeal or significantly roll back the Trump-GOP tax cuts.”

The website offers formal tax proposals where they exist, but also more general statements on tax policy. Major themes that are apparent from the plethora of proposals:

  • All the candidates want to create a much fairer tax system by making the rich and corporations pay their fair share.
  • Many candidates have paired raising significant revenue with financing ambitious investment initiatives.
  • Repealing or rolling back the Trump-GOP tax cuts for the wealthy and corporations is a priority for virtually all candidates.
  • Eight candidates have identified taxing wealth more like work as a priority by reforming the way investment income is taxed, such as equalizing the top tax rates paid on capital gains and wages and salaries, which are currently 20% and 37% respectively.
  • Six candidates want to strengthen the estate tax, which was severely weakened by the Trump-GOP tax cuts and now affects about 0.2% of all estates because it applies to estates valued at $11 million for an individual and $22 million for a couple.
  • Ten candidates want to raise corporate tax rates.
  • 12 candidates support some form of a carbon tax and five support a Financial Transaction Tax.
  • Eight support a major expansion of the Earned Income Tax Credit and the Child Tax Credit (CTC), 11 support a separate CTC-expansion bill, and 11 support a 0.2% payroll tax to pay for paid leave for the birth of a child, illness or to take care of a relative.

Clemente offered three reasons presidential hopefuls are going bold on taxes this election.

“One is the failure of the Trump-GOP tax cuts – the Tax Cuts and Jobs Act (TCJA) – to live up to its promises to raise wages, create jobs and increase business investment,” he said. “Voters were never keen on the tax cut law, and polls continue to show that they believe (correctly) that it mostly favored the wealthy and big corporations and did little for them.

“Second, candidates are much more aware that voters strongly favor taxing the wealthy and corporations, as indicated by our polling compilation. Most voters don’t believe in the magic—and fake—elixir of trickle-down tax cuts.

“Third, voters are demanding much greater investment in public services—from affordable healthcare and childcare to improved housing and education; from rebuilding infrastructure to addressing climate change—and they want to know how candidates will pay for it all.

“These factors have combined to create an environment in which candidates—far from having to shy away from the tax issue as in past years—will actually be rewarded for proposing major tax increases on the wealthy and corporations and using the money to pay for vital public investments.”

The ATF Action Fund presidential tax plan website presents the information voters need to evaluate each candidate’s tax and spending proposals and compare them to those of others. The website will be regularly updated as campaigns release further tax and investment proposals in the future.

Americans for Tax Fairness Action Fund is a fiscally sponsored project of the Sixteen Thirty Fund, a section 501(c)(4) non-profit organization. ATFAF is related to but should not be confused with Americans for Tax Fairness, which is a project of the New Venture Fund—a section 501(c)(3) non-profit organization.

Contact:
Dennis Bailey
Director of Communications
Americans for Tax Fairness
dbailey@americansfortaxfairness.org
202.733.3444

THE WALL STREET BANKS/BRUCE POLIQUIN BROMANCE EXPLAINED: HE VOTED TO GIVE THEM BILLIONS IN TAX RELIEF

Maine People’s Alliance

July 19, 2018

For Immediate Release

Banks Run TV Ads for Maine Congressman as Reward for Supporting Huge Tax Windfall and Anti-Consumer Votes

WASHINGTON, D.C. – America’s big Wall Street banks are taking the early and unusual step of jumping into Maine’s Second Congressional District race to help their friend Republican Rep. Bruce Poliquin in his reelection bid. Why? Because his vote in favor of the Trump-GOP tax cuts showered the big banks with billions of dollars in tax breaks, and his votes for anti-consumer banking legislation pleased the CEOs and wealthy shareholders of Wall Street’s biggest banks.

The American Bankers Association, the largest financial interest group in the U.S., is airing a new TV ad to help re-elect Poliquin who, as a member of the House Financial Services Committee, voted to advance every bill favored by the banking lobby group, including the Trump-GOP tax cut bill. According to an analysis of corporate filings and other data by Americans for Tax Fairness, the nation’s Big 6 Wall Street banks—Bank of America, Citigroup, Goldman Sachs, JP Morgan Chase, Morgan Stanley, and Wells Fargo—are among the biggest winners from the tax cuts.

In just the first six months of 2018, the Big 6 received a tax-cut windfall of nearly $6.2 billion. If this trend continues, they will get a total tax cut of $12.3 billion for the whole year. [See table below] Yet only Bank of America, JP Morgan Chase, and Wells Fargo have announced plans to pass along any of that bounty to their employees. The $550 million in estimated one-time bonuses and wage increases represent only a small fraction of the industry’s tax savings, and they pale in comparison to what the banks are showering on their shareholders and executives.

Although supporters of the tax cut law promised it would boost worker paychecks, the big banks are instead paying out $93 billion to their wealthy CEOs and shareholders through stock buybacks over the next year, as they own most corporate stock. That’s 169 times more than the $550 million in pay hikes to workers by the three of six banks.

“Bruce Poliquin’s record shows he’s on the side of Wall Street banks and big corporations instead of working families in Maine,” said Amy Halsted, co-director of Maine People’s Alliance. “And now they’re rewarding him by spending tens of thousands of dollars in TV ads to make sure one of their most valuable assets keeps his seat in Congress.”

Along with the Trump-GOP tax cuts, Poliquin voted in committee and later in the full House to gut the Dodd-Frank Wall Street Reform and Consumer Protection bill that was adopted after the financial crisis that caused $6 to $14 trillion in economic losses in the U.S. alone, cost millions of jobs and led to millions of American families losing their homes. The big Wall Street banks that are now openly supporting Poliquin caused the crisis by taking irresponsible risks, using deceptive and fraudulent practices to sell “toxic” mortgage securities to investors and exploiting home buyers through exploitative mortgage loans. Yet they were bailed out by the government—to the tune of $160 billion for the Big 6—and their executives paid no personal price.

But they did face tighter regulations to prevent future financial meltdowns, regulations that Poliquin opposed.

“The Trump-GOP tax cuts cost nearly $2 trillion, which has exploded the nation’s debt,” said Frank Clemente, executive director of Americans for Tax Fairness Action Fund. “Now Poliquin’s Republican leaders in Congress are using that as an excuse to slash Medicare, Medicaid, Social Security and other vital services. Instead, we need strong action to deal with the overpricing of prescription drugs and relief from high health insurance premiums. But Poliquin thinks it’s the big Wall Street banks that need relief from paying their fair share of taxes.”

BIG 6 BANKS: TRUMP-GOP TAX CUTS AND SHAREHOLDER RETURNS VS. WORKER BENEFITS ($ in Millions)
Corporation First Quarter 2018 Tax Savings Second Quarter 2018 Tax Savings Estimated Full-Year 2018 Tax Savings Stock Buybacks Planned in Next 4 Quarters Estimated Cost of Worker Bonuses & Pay Increases, 2018
Bank of America $801 $1,441 $4,484 $20,600 $145
Citigroup $456 $435 $1,783 $17,600
Goldman Sachs $232 $174 $813 $5,000
JP Morgan Chase $470 $694 $2,327 $20,700 $137
Morgan Stanley $279 $356 $1,269 $4,700
Wells Fargo $662 $154 $1,631 $24,500 $268
TOTAL, BIG 6 $2,900 $3,253 $12,307 $93,100 $550.6

Sources/Notes:
a) 1st and 2nd Quarter tax savings: Savings estimates for each bank represent the difference between what it would have owed in taxes in the 1st and 2nd quarters of 2018 if its effective tax rate from the corresponding quarter in 2017 was applied to its 2018 earnings, and its reported tax liability for the first two quarters of 2018. The tax savings for Goldman Sachs for the 1st quarter was estimated by The Wall Street Journal and made adjustments for tax benefits related to employee stock awards. The estimates for the other five banks are from the Institute on Taxation and Economic Policy (ITEP). 2nd quarter tax savings estimates are calculated by ATF based on the earnings and tax liability reported by the banks in their 2nd quarter earnings releases.
b) 2018 tax savings are estimated by multiplying the aggregate tax savings for the first two quarters by two.
c) Planned stock buybacks are from the companies’ 2018 Capital Plans submitted to the Federal Reserve and cover the 3rd quarter of 2018 to the second quarter of 2019.
d) Cost of worker bonuses and pay increases are estimated by ATF. See details and methodology on TrumpTaxCutTruths.org.
e) CEO Pay data from Institute for Policy Studies and Public Citizen, “CEO-Worker Pay Ratios in the Banking Industry.”

Amy Halsted

Co-Director

Maine People’s Alliance

cell: 207-240-0427

 

Contact: Dennis Bailey

Director of Communications

Americans for Tax Fairness

202-733-4333

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