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Category: Press Release

DE BLASIO PROPOSES MAJOR TAX PLAN TO ADDRESS INCOME INEQUALITY, RESTORE FAIRNESS

NYC Mayor Joins Democratic Candidates Pushing Back Against Trump-GOP Tax Cuts for Wealthy

 Addressing the growing problem of income inequality in America, Democratic presidential candidate Mayor Bill de Blasio yesterday proposed a major plan to overhaul the nation’s tax system that requires a lot more from the wealthy and corporations.

While nearly all the Democratic candidates have proposed various tax and revenue increases to pay for critical needs (as catalogued on the ATF Action Fund website), de Blasio’s plan goes further by targeting a broad array of loopholes and inequities in the tax code that give preferential treatment to the wealthy and big corporations.

Although it’s unclear how much revenue de Blasio’s plan would raise, it cites estimates showing it could raise about $10 trillion over 10 years.

“Mayor de Blasio’s progressive tax-reform plan is a recognition not only that the Trump-GOP tax cuts for the wealthy are unfair and aren’t working, but also that raising taxes on the wealthy and big corporations is good for the economy,” said Frank Clemente, executive director of Americans for Tax Fairness Action Fund. “We have numerous critical needs, from infrastructure to education, to health care and climate change. It will cost trillions of dollars to address these needs, which will actually strengthen the economy and put more people to work. But the only way to do that is to raise substantial revenue by replacing the rigged system we have now with fair and progressive taxes.”

Clemente emphasized that ATF Action Fund does not endorse political candidates. “But it’s encouraging to see candidates like de Blasio and others move the issues of tax fairness and income inequality to the forefront of the 2020 campaign for president where it belongs,” he said.

Included in de Blasio’s tax plan are proposals to:

  • Tax Extreme Wealth: Impose a 1% tax on households with wealth between $10 million and $25 million, a 2% tax on assets between $25 million and $100 million, and a 3% tax on assets in excess of $100 million.
  • Tax Wealth Like Work: De Blasio’s plan would tax capital gains (income derived from the sale of stocks, bonds and other investments) the same as ordinary income – wages and salaries for wealthier taxpayers. Currently, capital gains are taxed at a much lower rate than workers’ paychecks – 20% (or 23.8% for a married couple making more than $250,000 a year) vs. 37%, the top tax rate on wages and salaries.
  • Increase the Top Marginal Tax Rate and Create Two New Brackets for the Very Wealthy: The plan would increase the top marginal tax rate to 40%, from the current 37%, for individuals with income up to $1 million, and add two new tax brackets and tax rates – a 50% rate on income between $1-$2 million and a 60% rate on income above $2 million. The latter rate would effectively be 70% after adding in state and local taxes.
  • Restore the Corporate Tax Rate to 35%: De Blasio’s plan would restore the corporate tax rate to 35%, which was reduced to 21% under the Trump-GOP tax cuts, and reinstate a “strong” “Alternative Minimum Tax” to prevent profitable corporations from avoiding a tax liability. He would also equalize the tax rate between domestic and foreign profits to reduce incentives for corporations to shift profits offshore and outsource jobs.
  • Financial Transaction Tax: De Blasio would establish a Wall Street sales tax of 0.2% on stock, bond and derivatives trades, which would also help curb market volatility.

Some elements of de Blasio’s plan are similar to proposals by Senators Elizabeth Warren, Bernie Sanders and Rep. Seth Moulton (D-MA), who released a tax plan that he estimates would raise nearly $3 trillion.

Some of de Blasio’s tax proposals reflect options included in a report by Americans for Tax Fairness titled Tax Fairness Now: Revenue Options for a Fair Tax System released in April.

“Democrats are making tax fairness and income inequality key issues in the 2020 campaign,” said Clemente. “That will give voters a stark choice between President Trump and Republicans, who support tax giveaways to the wealthy and big corporations, and the public, which polls show support a tax system that’s fair to everyone, not just the wealthy and powerful.”

 

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

PRESIDENTIAL CANDIDATES UPDATE TAX PLANS, PROPOSE A VARIETY OF TAX INCREASES ON WEALTHY & CORPORATIONS

ATF Action Fund Website Tracks the Latest Initiatives to Raise Trillions in Revenue

Democratic presidential candidates continue to propose new progressive tax reform plans and refine previous ones to raise trillions in revenue to address critical needs including healthcare, the high cost of prescription drugs, wealth inequality and climate change.

The ATFAF website that tracks the tax plans of 22 Democratic candidates now includes more proposals for higher individual and corporate tax rates, carbon taxes, a “war tax,” a pharmaceutical tax and more. A summary table of all candidates’ positions is here.

“It’s encouraging to not only see how candidates intend to address urgent needs facing this country, but also how they intend to pay for their proposals, mostly by raising taxes on the wealthy and big corporations that benefited so greatly from the Trump-GOP tax cuts,” said Frank Clemente, executive director of Americans for Tax Fairness Action Fund. “It shows that all the candidates are committed to a fairer, more equitable tax system that right now is rigged in favor of the rich and powerful.”

The latest additions to the ATFAF website include:

  • Joe Biden has proposed reversing the TCJA tax cuts for the wealthy by restoring the 39.6% top marginal tax rate, up from 37%, raising the corporate tax rate to 28%, and equalizing the top tax rates on investment income and wages and salaries. He aims to help more families afford healthcare by expanding tax credits that help them buy health insurance under the Affordable Care Act (ACA) and suggests using the revenue saved from eliminating the stepped-up basis loophole to pay for free community college for between six and nine million students.
  • A significant progressive tax reform proposal from Rep. Seth Moulton that would raise $2.8 trillion (his estimate) by repealing key parts of the Trump-GOP tax law favoring the wealthy and corporations and making other changes.
  • A higher 28% corporate tax rate from Beto O’Rourke, as part of his goal to “roll back the worst elements of the Trump tax cuts,” equalizing the top tax rates on investments and wages and salaries, and a “war tax” that would levy a progressive annual tax on the adjusted gross income (AGI) of households without military members or veterans at the start of every “newly authorized war.”
  • A proposal by New York Mayor Bill De Blasio for a 70% marginal tax rate on wealthy individuals.
  • Proposals by candidate John Delaney for a 100% excise tax on the difference between the average price charged by a pharmaceutical company for a drug sold in the U.S. and the price of that drug in other countries, a “Robot Tax” on job-displacing capital investments, and a higher capital gains tax rate on high earners.
  • 11 candidates want to tax wealth like work, with all but 1 of the 11 saying they want to equalize the top tax rate paid on capital gains to match that on wages and salaries, which are 20% and 37% respectively.
  • 11 candidates support some form of a carbon tax.
  • Six candidates want to strengthen the estate tax, by returning the threshold at which estates pay tax to the 2009 levels of $3.5 million for an individual and $7 million for a couple. This compares to the much higher thresholds under the Trump-GOP tax cuts – $11.4 million for an individual and nearly $23 million for a couple.
  • Six candidates support a Financial Transaction Tax.

“It’s exciting to see that so many candidates want to take on the outrageous wealth divide in America, which is devastating to African American and Latino families, by equalizing the tax rates on investment income and wages and salaries,” said Clemente. “This appears to be priority one for the candidates.”

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 new tax and investment proposals.

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

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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