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On Monday, September 19, President Obama may offer a corporate tax reform plan along with his deficit reduction proposals. Previous statements from the administration indicate that the corporate tax reform plan would be “revenue-neutral,” meaning it would raise no new revenue to reduce the budget deficit or meet the growing needs of the nation.
In May, U.S. Senators and Representatives received a letter from 250 organizations, including non-profits, consumer groups, labor unions and faith-based groups from every state, rejecting this “revenue-neutral” approach to corporate tax reform. These organizations call on Congress to close corporate tax loopholes and use the revenue saved to address the budget deficit and fund public investments.
As the letter explains, “Some lawmakers have proposed to eliminate corporate tax subsidies and use all of the resulting revenue savings to pay for a reduction in the corporate income tax rate. In contrast, we strongly believe most, if not all, of the revenue saved from eliminating corporate tax subsidies should go towards deficit reduction and towards creating the healthy, educated workforce and sound infrastructure that will make our nation more competitive.”
Citizens for Tax Justice has called for revenue-positive tax reform in a recent op-ed in USA Today, a report explaining why Congress can raise more revenue from corporations, and in CTJ director Bob McIntyre’s recent testimony before the Senate Budget Committee.
CTJ also released a report in June focusing on 12 major profitable corporations that collectively paid an effective U.S. tax rate of negative 1.5 percent on their U.S. profits over the past three years.