Respectfully submitted by Lawrence E. Rafferty (rafflaw) Weekend Contributor
Now that we have celebrated Thanksgiving, I was struck by the news that Congress is considering legislation that would grant large tax breaks to corporate citizens and actually remove tax breaks for the poor and the middle class.
‘ “This Congress seems willing to give huge tax cuts to big businesses—who are already doing better than ever—but somehow can’t prevent tax increases on 50 million working Americans that will occur when expansions of the Earned Income Tax Credit and Child Tax Credit expire,” Harry Stein, the Associate Director for Fiscal Policy at American Progress Action Fund, told ThinkProgress. “This is a great deal for CEOs and a terrible deal for struggling families.”’ Nation of Change
One of the most amazing aspects of the proposed legislation is that it was reached as a compromise between Republicans and Democrats in the Senate. In light of the hug tax breaks for corporations, one is left wondering, just what did the poor and the middle class get in this “compromise”? The answer to that question is, not much.
“Under the terms of the $444 billion agreement, lawmakers would phase out all tax breaks for clean energy and wind energy but would maintain fossil fuel subsidies. Expanded eligibility for the Earned Income Tax Credit and the Child Tax Credit would also end in 2017, even though the Center for Budget and Policy Priorities estimates that allowing the provisions to expire would push “16 million people in low-income working families, including 8 million children into — or deeper into — poverty.” The proposal would help students pay for college by making permanent the American Permanent Opportunity Tax Credit, a Democratic priority.
Meanwhile, two-thirds of the package would make permanent tax provisions that are intended to help businesses, including a research and development credit, small business expensing, and a reduction in the S-Corp recognition period for built-in gains tax.
The costs of the package will not be offset.” Nation of Change
As I understand the proposed “compromise”, large corporations that in many cases do not pay any taxes, will get 2/3rds of the tax breaks outlined in the legislation, including fossil fuel corporations, at the expense of clean energy. If you are a large corporation, especially those that deal in fossil fuels, your Christmas may have come early this year. But don’t worry, it seems that in many ways, corporate citizens enjoy the ability to avoid Federal taxes entirely and in some cases, actually get money back from the government! All while not paying any Federal taxes.
If you need some examples of corporations hitting the tax jackpot, you need to look no further than here. I guess it really pays off to be a corporation when it comes to tax time.
“It seems incomprehensible that Boeing, Ford, Chevron, Citigroup, Verizon, JP Morgan, and General Motors, with a combined income last year of $74 billion, would pay no taxes, and in fact receive a combined refund of nearly $2 billion. The data comes from a new study called Fleecing Uncle Sam, which goes on to note that the unpaid taxes of almost $26 billion could pay for Pre-K education for every 4-year old in America.” NOC
The good news is not everyone in Washington is going along with the proposed compromise. The Treasury Secretary, Jack Lew has blasted the proposal.
“On Monday, Treasury Secretary Jack Lew also blasted the emerging agreement as “fiscally irresponsible” and doing “very little for working families.” He said, “Any deal on tax extenders must ensure that the economic benefits are broadly shared. We are committed to working with Congress to address the issue in a manner that is fiscally responsible and extends critical tax benefits for working families.” Nation of Change
President Obama also threatened a veto if the legislation, as currently written is approved by lawmakers. Sen. Harry Reid has also backtracked his original approval of the compromise and “denied it “signed off” on any deal without commenting on the specifics of the story.” Nation of Change
Was Congress expecting that most Americans would be in favor of losing tax benefits to profitable corporations? Why would any legislator want to give tax legislation “gifts” to corporations which at the same time would harm green energy firms and millions of individuals?
Don’t the Waltons and the Koch Brothers already make enough money? And in the case of the Koch Brothers, much of their earnings are at the expense of our environment, so why give them more tax breaks?
The best answer that I can come up with to those questions is to follow the money. The large corporations and some of the wealthiest individuals and families in America believe in the Gordon Gecko philosophy of “greed is good”.
In my opinion, the House of Representatives and the Senate are wholly owned subsidiaries of these very same corporations and the House and Senate members must deliver the pork to their bosses. What do you think?