Author: Alex Welch

What the GOP is Really Thinking

Posted on by Alex Welch

It’s become increasingly clear who GOP leaders are drafting legislation for as they hurriedly rush to re-write the tax code before the new year.

New York Rep Chris Collins said on Nov. 7, 2017, “My donors are basically saying, ‘Get it done or don’t ever call me again.'”

Donald Trump told members of the elite 21 Club in Manhattan on Nov. 15, 2016, “We’ll get your taxes down, don’t worry about it.”

And Gary Cohn, the White House economic advisor said on Nov. 9, 2017, “The most excited group out there are the big CEO’s about our tax plan.”

But even more damning are the comments made by senior lawmakers who showed their disdain for those the plan hurts the most. Senator Orrin Hatch, speaking about health care for children said,

“I have a rough time spending billions and billions and trillions of dollars to help people who won’t help themselves, won’t lift a finger and expect the federal government to do everything.”

Finally, Iowa Senator Chuck Grassley justified the bills clear preference for the wealthiest 1% by arguing that they are the ones actually investing, unlike those who, “are just spending every darn penny they have, whether it’s on booze or women or movies.”

Thankfully, the public isn’t buying what they’re selling. By a margin of two to one, Americans opposes the GOP tax plan. Now these lawmakers need to realize they are accountable to the voters, and not those writing the checks.

 

The wealthy don’t need more breaks.

Posted on by Alex Welch

A new report shows that the richest 1% now own 40% of this country’s wealth. That’s an astounding figure. The wealth gap has been widening for decades and it has now hit an all-time high.

In this Washington Post article, the author compares the wealth distribution that most Americans would choose, compared to the reality. The contrast is striking. When surveyed, Americans said they would be comfortable with the wealthiest 20% getting nearly one-third of the wealth. In reality, that group of wealthy Americans holds 90% of the wealth.

True tax reform would address this underlying problem, not make it worse. The GOP leaders rushing to pass the current tax bill are unfortunately doing the latter. This tax bill represents the greatest redistribution of wealth to the already wealthy in history. If passed, it will make the wealth gap much worse. And working families are the ones that will suffer.

Senate Tax Plan: Raises Taxes on Working Families and Cuts Taxes on Richest 1%

Posted on by Alex Welch

An analysis of the tax plan circulating the Senate for an upcoming vote shows that it would raise taxes on at least 29 percent of Americans and cause the populations of 19 states to pay more in federal taxes in 2027 than they do today. The lowest-earning three-fifths of Americans would pay more on average in federal taxes, while the top 40 percent on average would receive a tax cut. The bill would increase the deficit because of the substantial tax breaks it would provide to the wealthy and to foreign investors who own stocks in American corporations and who would therefore benefit from the bill’s corporate tax cuts.

The claims that this plan is designed to support low- and middle-income families are patently false.

Click here to download this graphic 

Nationally, the facts are clear.

 

  • This is not a Middle Class tax plan. The richest 5 percent of taxpayers collectively get 50% of the tax cuts in 2019; in 2027 the top 1% will get back $9,090 on average in tax cuts; more than six times the average amount everyone else will get combined.
  • One in 3 taxpayers face a tax increase in 2027. In 2019 28.8 million taxpayers will pay more in taxes or see no difference; that number grows exponentially by 2027, when 29% of taxpayers will face a tax hike. By 2027, 61 million people will pay more or the same in taxes (50 million will pay more). The bottom three income brackets receive a net INCREASE in taxes by 2027, while the top 1% continues to receive an average tax cut of $9,090.
  • People in 19 states will see their federal taxes rise by 2027. The states with the biggest net increase are Florida, North Carolina, Louisiana, Idaho and Maine.
  • Foreign investors get a bigger share in this tax plan than U.S. taxpayers. In 2027, $22 billion of the tax cuts go to foreign investors; compared to the $8 billion in net benefit to all U.S. taxpayers.
  • The tax provision (AMT) that cost Donald Trump $31 million in 2005 is gone through 2025. This means the super-wealthy will be more likely to be able to use loopholes to avoid paying taxes altogether.
  • The plan reduces revenue by almost 1.5 trillion which will either grow the deficit or force significant spending cuts to vital investments like education, health care, science research, job training and infrastructure.
  • Tax cuts for individuals expire after 2025, corporate tax cuts are permanent. This change explains why wealthy investors and the top 1 percent would still reap immense benefit from the tax cuts after 2025.

Interested in state-specific graphics? Click below to download the animation above with state-specific numbers in:

Alaska, where:

Millionaires win big. 97% of Alaskans with average incomes of $1.15 million win will get back $4,070 on average in 2027. Working families get INCREASES. On average, people in the bottom 60%, with household incomes of $31,300 on average, will just see their annual taxes RISE by $240 on average. In total, 147,200 Alaskans will see their taxes rise in 2027. Meanwhile, foreign investors will continue to get huge breaks from this plan — $22 billion in U.S. taxpayer money in 2027.

Arizona, where: 

1.2 million Arizonians will see their taxes rise in 2027. Meanwhile, foreign investors will continue to get huge breaks from this plan — $22 billion in U.S. taxpayer money in 2027. Working families will pay more. On average, the bottom 60% of income earners will see their tax bills rise by 2027 on average $150. Millionaires get huge tax cuts, at the cost of working families. 92% of the top 1%, with average incomes of $1.9 million/year receive tax cuts of $5,000 on average in 2027.

Kentucky, where:

Taxes will rise for nearly one-in-four — or half a million — households in 2027 (24%). More than half a million taxpayers (544,900) will pay on average $110 MORE in taxes under the Senate GOP plan in 2027. Meanwhile, 98% of the richest 1% will see their taxes drop by an average of $4,790. Collectively, Kentuckians will pay $105,100,000 MORE in federal taxes under this plan.

Maine, where:

Mainers will pay more in taxes. On average, the bottom 60% of income earners will see their tax bills rise $120 in 2027. More than 1 in 4 (28%) taxpayers in Maine will pay more in 2027 under the Senate GOP tax plan. That’s nearly a quarter of a million people — 205,000. Millionaires win big. Meanwhile, 97% of the people in the top 1%, with average household incomes of $1.75 million will get on average $4,740.

Tennessee, where:

Working families in Tennessee will pay more overall in taxes — on average the bottom 60% of income earners will see their taxes rise on average $110 in 2027. Overall, 1.1 million Tennesseans will see their taxes rise on average $110 in 2027. Meanwhile, 91% of the richest 1% will get tax cuts of $6,030 in 2027.

 

It’s time to take action. Please take two minutes to contact your representatives and ask them to vote NO on the tax bill. And then, please take time to spread the word.

GOP Tax Plan: Massive Redistribution of Wealth to the Already Wealthy

Posted on by Alex Welch

The GOP tax plan that passed the House of Representatives in November is a massive redistribution of wealth to the already wealthy. An ITEP analysis of the plan finds 31 percent of the tax cuts would go to the top 1 percent in 2018 and 48 percent of them would go to the top 1 percent by 2027. ITEP Executive Director Alan Essig said of the plan, “Opinion polling shows the vast majority of Americans do not support this tax plan. A significant percent believe it will only help the wealthy and corporations. Yet lawmakers continue full speed ahead with dubious promises that trickle-down economics will really work this time. This tax plan will not ease working people’s economic anxiety, it will make it worse.”

Corporate tax cuts do NOT create jobs

Posted on by Alex Welch

A frequent argument for the GOP tax plan passed recently by the House and currently under review in the Senate is that cutting taxes on corporations will help working families and the middle class because it will create new jobs and raise wages.

The truth is, cutting taxes on corporations does neither of those things.

In fact, a study by the Institute on Policy Studies found that tax cuts on corporations tends to do one main thing: Increase CEO pay. In fact, in their analysis of 92 profitable companies over 8 years that paid less than 20 percent in federal income taxes, found that these corporations actually cut jobs, and those who kept their jobs found their wages stagnant.

The Great Tax Heist

Posted on by Alex Welch

The Senate just passed (by two votes) a budget that clears the way for $6 trillion in cuts from critical services and $1.5 trillion in tax cuts. Their arguments for the tax plan they have proposed center around one core argument: That lowering the corporate tax rate will somehow benefit working families. This has been proven by independent analyses and history to be patently FALSE. We call the whole thing magic math. This video breaks it down.

The tax plan they are proposing is a massive giveaway for corporations and the wealthiest 1%, paid for by working and middle class families. But that’s not what you’ll hear Trump and GOP leaders say publicly. Their public spin centers around what we like to call MAGIC MATH. This concept (that somehow cutting the corporate tax rate will give working people better jobs) has been proven by independent analyses (not to mention history) FALSE. And we’re not fooled by their tricks.

This video breaks that “magic math” down. Enjoy!

If this “magic math” makes you you as mad as it does us, won’t you consider spending a few minutes to call Congress and let them know you aren’t fooled by their tricks?

It’s Time to Close Loopholes

Posted on by Alex Welch

U.S.-based multinational corporations are allowed to play by a different set of rules than the rest of us when it comes to paying taxes. Thanks to corporate lobbyists, our tax code is riddled with loopholes.

In 2016 alone, nearly three out of every four Fortune 500 companies maintained subsidiaries in offshore tax havens.* This collective offshore cash hoard now totals $2.6 trillion, allowing these companies to avoid $752 billion in U.S. taxes.

But there’s a way to fix this! Congress could act tomorrow to shut down tax haven abuse. If you agree that closing corporate tax loopholes should be the cornerstone of any tax reform effort, please take a minute and let your representatives know.

 

* Source: “Offshore Shell Games” an annual study of offshore tax avoidance by the U.S. PIRG Education Fund and the Institute on Taxation and Economic Policy.

The Top Three Reasons You Should Call Congress TODAY!

Posted on by Alex Welch

The Top Three Reasons You Should Call Congress TODAY!

In advance of the Congressional budget resolution vote on October 5, ITEP releases report showing the richest would win big.

As Congress readies for a vote October 5 on the budget resolution, the independent research institute ITEP released a comprehensive report detailing the impacts of the “tax reform framework” released recently by President Trump and GOP leaders in Congress. The numbers tell a very different story than what proponents of the framework have been saying.

It’s time to tell Congress we aren’t interested in tax cuts to the rich. Please call them today to let them know why this matters to you.

And if you need more reasons why you need to pick up the phone, here are our top three:

Number One: The richest 1 percent get the majority of the tax breaks, while 1 in 6 taxpayers will actually see their tax bills GO UP.

The ITEP report shows clearly that in every state the wealthiest 1 percent of individuals are the ones who make the most money off this plan. On average in 2018, they’ll get $90,610 extra in their pockets. Meanwhile, one in six taxpayers would see their tax bills rise. And the poorest 20 percent will get just $80 on average back on their 2018 taxes under this plan.

Number Two: Essential services will be put at risk

Overall this tax plan will lose $233 billion in revenue in 2018 alone for the government, putting at risk essential social services such as Medicare, Medicaid, Social Security and education (Source: ITEP)

Number Three: Some states will lose BIG.

And in some states there are some big losers for this tax plan — especially in the middle class. In nine states and the District of Columbia, over 20 percent of taxpayers would face an immediate tax increase. Those states include Maryland (30.5 percent), New Jersey (26.4 percent), Connecticut (24.3 percent), California (22.8 percent), Virginia (22.4 percent), Utah (22.2 percent), New York (22.1 percent), Massachusetts (20.5 percent), and Georgia (20.5 percent). Yet in each of those states the richest 1% will see huge tax CUTS.

 

We hope these are enough reasons for you to pick up the phone and call your representatives in Congress. It just takes a few minutes, and we have an easy tool you can use to quickly get connected to the right people.

And if you want more reasons, check out the full ITEP report here.

Fact v. Myth

Posted on by Alex Welch

Lawmakers and an army of well-financed special interests have embarked on a campaign to convince the public that supply-side tax cuts will benefit the middle-class. But the American people know better: 24 percent of Americans think the wealthy are paying their fair share of taxes, and just 19 percent of Americans think corporations are paying their fair share of taxes (Source: Gallup). In this series, we challenge myths about the nation’s tax system.

MYTH: The corporate tax rate is too high

Data from the OECD show that U.S. corporate taxes as a percentage of GDP are 2.2 percent, which is substantially less than the 2.9 percent weighted average among the 34 other OECD countries for which data were available. For a full list of countries and their GDP, view this ITEP report.

A comprehensive study examined the average effective tax rate paid by profitable Fortune 500 companies over an eight-year period.  A substantial number of firms had years in which they were profitable but paid either nothing in federal taxes or single-digit tax rates. The average effective rate paid by profitable U.S. corporations from 2008 to 2015 was 21.4 percent. The 35 Percent Corporate Tax Myth has more detailed information.

Fortune 500 companies are collectively holding $2.6 trillion offshore and avoiding up to $767 billion in U.S. taxes. Many of these companies acknowledge paying tax rates of 10 percent or less on their offshore profits, indicating they likely are using accounting tricks to shift profits into tax haven countries to avoid U.S. taxes. Read more about corporations’ offshore profits.

Congressional hearings over the past few years have raised awareness of the offshore tax avoidance strategies of major technology corporations, but tech firms are not alone: hundreds of companies shift profits offshore to avoid U.S. taxes. Companies with the biggest offshore cash hoards include major household names such as Apple, Microsoft, GE and Pfizer. Read more

Corporate tax loopholes have allowed 18 profitable corporations to altogether avoid tax over multiple years. In fact, not only have these corporations not paid tax form 2008 to 2015, some of them received federal tax refunds. Read more