Looking forward to life with less

It is almost always the case that profits sheltered by American corporations in overseas tax havens were actually earned in the United States or another country with a similar tax system but today, Fortune 500 companies have stashed a record $2.6 trillion in offshore accounts.

Instead of addressing the hundreds of billions in lost federal tax revenue due to offshore tax avoidance schemes, Republicans would make matters worse. The Senate bill would forgive most of the taxes owed on these profits and open the floodgates to even more offshore profit-shifting in the future.

President Donald Trump and Republican leaders in Congress have proposed a “territorial” tax system, which would allow American corporations to pay no U.S. taxes on most profits they book offshore. This would worsen the already substantial problem of corporate tax avoidance.

Plus, they want to lower the corporate tax rate to 20 percent.

Profitable corporations are currently subject to a 35 percent federal income tax rate on their U.S. profits but many businesses pay far less, or nothing at all, because of loopholes and special breaks built into the law.

The result of this is that corporations will pay a smaller share of the cost of government and people like you will have to pay more.

Speaker Paul Ryan has pushed through a measure cloaked in the name of tax reform that continues to focus on a top-down approach that will only make this problem worse.

Inequality in America has been growing for decades, stymying our national potential and contributing to the growing political rift in the country.

According to estimates by the Institute on Taxation and Economic Policy, the Tax Cuts and Jobs Act introduced in the House of Representatives would disproportionately benefit the richest one percent of Americans, leaving the remaining 99 percent of the population to share roughly half the benefits.

The richest 5 percent of taxpayers collectively would receive more than half of the tax cuts for individuals in 2019, and the top 1 percent would receive 47 percent of the cuts in 2027.

Nationally, 12 percent of households would face a tax increase in 2019 and 13 percent would face a tax increase in 2027. Additionally, ITEP’s analysis finds that nearly one in three households earning between $112,160 and $239,600 would face a tax hike in 2019, and 16 percent of households earning between $66,850 and $112,160 also would face a tax increase that year.

Taxpayers who face an increase are concentrated in those states with higher state and local taxes, which would no longer be deductible on federal tax returns under the Senate plan.

The poorest 20 percent would receive the biggest tax hike.

The simple fact is that trickle-down economics has failed to enhance the prosperity of ordinary Americans and the latest GOP tax scheme would inflate the national debt by $1.5 trillion.

Americans vote for politicians who promise tax cuts but when the economy was booming during the 1950s and ’60s, top marginal tax rates were 90 and 70 percent.

Low tax rates on high income earners have diminished investments, weakened the nation as a whole, vastly increased debt and shifted costs for vital services to those who can least afford them.

 

 


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