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The tax-related proposals in the recently released Democratic Party platform represent a meaningful victory for progressives. From advocating for the expansion of poverty-reducing tax credits to condemning corporations that avoid taxation by stashing profits offshore, the provisions outlined in the platform would improve our tax system for ordinary Americans while holding tax-dodging corporations accountable. In terms of tax justice, this year’s Democratic platform is one of the party’s most progressive in modern history.
The tax changes outlined in the pages of the Democratic Party platform would shift taxes away from lower- and middle-income Americans and towards corporations and the wealthy. For instance, the platform proposes a multimillionaire surtax “to ensure millionaires and billionaires pay their fair share” as well as a plan to ask high earners to pay more towards the Social Security fund. Plans to cut taxes for lower-income citizens include expanding the highly effective Earned Income Tax Credit (EITC) to childless workers, indexing the Child Tax Credit (CTC) to inflation, and “tax relief to help the millions of families caring for aging relatives or family members with chronic illnesses.”
Additionally, the platform outlines a plan to increase revenue by cracking down on tax-dodging corporations. The Democrats vow to bring an end to offshore tax havens, which the platform says “corrupt rulers, individuals, and corporations exploit to shelter ill-gotten gains or avoid paying taxes at home.” The most important anti-tax avoidance measure in the platform is the Democrats’ plan to end deferral, a popular loophole used by corporations to escape paying taxes on profits stashed offshore. Since presidential candidate Sen. Bernie Sanders has been a longtime champion for ending deferral, this addition to the platform represents a major shift towards Sanders’s more progressive position.
Symbolizing the progressive shift of the 2016 platform is the party’s promise to “use the revenue raised from fixing the corporate tax code to reinvest in rebuilding America and ensuring economic growth that will lead to millions of good-paying jobs.” This is a big change from the 2012 Democratic Party platform, which proposed to use funds from the closing of corporate tax loopholes to fund lower tax rates for corporations, many of which pay nothing at all in taxes. CTJ wrote in 2012 that this platform “reveals a party deeply committed to the anti-tax mindset that historically is associated with the Republican Party.” In contrast, this year’s platform emphasized the good that tax-funded public services can do, stating “we are committed to a strong, effective, accountable civil service, delivering the quality public services Americans have every right to expect.”
While the Democratic Party platform would crack down on corporate tax misbehavior, the 2016 Republican Party platform would reward it. The GOP platform proposed to lower corporate tax rates to be “on par with, or below, the rates of other industrial nations,” ignoring the fact that a multitude of tax breaks and loopholes already enable corporations to pay well below the top tax rate. Additionally, the GOP platform advocates for individual tax evasion by promoting the repeal of the Foreign Account Tax Compliance Act (FATCA), an effective anti-tax evasion measure. Since the Joint Committee on Taxation (JCT) estimated that FATCA will return $8.7 billion that would otherwise have been lost to tax avoidance over the next decade to the U.S, this proposal would stick American taxpayers with the bill for this revenue shortfall through either increased taxation or spending cuts. In sharp contrast to the GOP plan, the Democratic Party’s new tax policy proposals would improve the lives of ordinary Americans by making corporations and the wealthy pay their fair share.