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100-Plus Organizations Urge Congress to Reject Giant Tax Loophole for Offshoring and Tax Avoidance

Republican Proposal for a “Territorial Tax System” Would Encourage Corporations to Send Jobs Offshore and Avoid Paying Taxes

(Washington, D.C.) Today, more than 100 organizations sent a letter urging members of Congress to reject a proposal that would allow U.S. multinational corporations to pay little to nothing on their offshore profits.

President Trump and Republican leaders in Congress included this proposal for a “territorial tax system” in the tax framework they unveiled last week.

The letter says, “This is an incredibly bad idea. Ending taxation of offshore profits would give multinational corporations an incentive to send jobs offshore, thereby lowering U.S. wages. It would also be a giant loophole for corporations to use accounting gimmicks to move their profits to tax havens, resulting in the loss of billions of dollars in tax revenue for the United States.”

“I’ve got to hand it to them. They’ve really outdone themselves this time. It must take a lot of effort to come up with an idea this bad,” said AFL-CIO President Richard Trumka. “It takes a lot of nerve to propose tax incentives for offshoring and then try to fool people into thinking you’re doing the exact opposite. Up is down, black is white.  What a con job.”

“Already, the U.S. encourages tax avoidance by allowing U.S. corporations to indefinitely defer taxes on profits that they book offshore. If the United States moves to a territorial tax system, multinational companies would have even greater incentive to engage in accounting tricks and move their profits to countries with zero or single-digit corporate tax rates. Corporate bosses would win while the rest of us would be left to pick up the tab,” said Alan Essig, executive director, Institute on Taxation and Economic Policy

“This scheme is a massive tax cut for wealthy corporations, that puts Main Street businesses and domestic companies at a terrible disadvantage,” said Frank Clemente, executive director, Americans for Tax Fairness. “We must continue to fully tax the profits U.S. corporations make offshore. If they pay less U.S. taxes on offshore profits than they pay now, or if they pay no taxes, they will have even more incentive to send jobs offshore and shift profits to tax havens to avoid paying their fair share.”

“It is, quite simply, the largest offshore loophole in the history of our tax code,” said Gary Kalman, Executive Director of the Financial Accountability and Corporate Transparency (FACT) Coalition. “While hard to fathom, the proposal creates new and greater incentives to book profits offshore. When you get past the rhetoric, they propose a near zero percent tax on all profits moved offshore. Other countries have tried this, failed, and are now struggling desperately to fix it. How do you look at their failure and say ‘let’s do the same?’”

For more details on why a “territorial” tax system rigs the rules of the economy in favor of multinational corporations and against working people, see this fact sheet from the Institute on Taxation and Economic Policy (ITEP).

Income Inequality Grows As CEO Pay Jumps 6 Percent To 347 The Average Worker

Image courtesy of the AFL-CIO

A new report and searchable database from the AFL-CIO’s Executive Pay Watch highlights the lavish compensation executives receive while workers wage remain stagnant.

Income inequality has become one of the largest economic issues facing America.  As workers wages remain stagnant, corporations continue to rake in massive profits and pay their executives lavish salaries.

According to the new AFL-CIO Executive PayWatch, the average CEO of an S&P 500 company made $13.1 million per year in 2016 – 347 times more money than the average rank-and-file worker. CEO pay for major U.S. companies has risen nearly 6 percent, as income inequality and outsourcing of good-paying American jobs have increased.

“This year’s report provides further proof that the greed of corporate CEOs is driving America’s income inequality crisis,” said AFL-CIO President Richard Trumka. “Big corporations continually find ways to rig the economy in their favor and line their CEOs’ pockets at the expense of the workers who make their businesses run. Too often, corporations see workers as costs to be cut, rather than assets to be invested in. It’s shameful that CEOs can make tens of millions of dollars and still destroy the livelihoods of the hard-working people who make their companies profitable.”

The Executive PayWatch website showed that in 2016, the average production and nonsupervisory worker earned approximately $37,600 per year. When adjusted for inflation, the average wage has remained stagnant for 50 years.

Take for example, Raymond Barrette, CEO of White Mountain Insurance Group LTD of Hanover, NH.  Barrette raked in $8.1 million in salary and stock options.  That is 270 times the average rank and file worker.

Another example comes from Patrick T. Ryan, CEP of Press Ganey Holdings in Wakefield, Massachusetts. He collected a whopping $28.9 million in compensation, 769 times the average worker.

The report allows viewers to search their comprehensive database of CEO pay by industry or state.

Screenshot from Executive Pay Watch

The PayWatch site also highlights U.S. corporations that don’t pay taxes on their offshore profits. By “permanently reinvesting” these profits overseas, they can forever defer paying federal income taxes and reinvesting back into the community.

According to the report, Massachusetts based General Electric is holding $82 billion in “Unrepatriated Profits” overseas in tax havens.  That is only one-third of the amount of money Apple is shielding overseas ($230 billion).

The report also highlights the growing trend of corporations offshoring good American jobs at the expense of hard working people.

“Avoiding corporate income taxes is one way CEOs boost their companies’ profits and thereby increase their own pay. This corporate tax avoidance reduces the amount of money that is available for public goods like roads and schools. As a result, our economy increasingly has become out of balance,” wrote the AFL-CIO in their report.

Image courtesy of the AFL-CIO

Mondelēz International, highlighted in this year’s PayWatch, represents one of the most egregious examples of CEO-to-worker pay inequality. The company, which makes Nabisco products, including Oreos, Chips Ahoy and Ritz Crackers, is leading the race to the bottom. Last year, it closed the Oreo cookie line at the iconic Nabisco factory in Chicago, sending 600 family-sustaining jobs to Mexico, where workers face poor labor and safety standards. Mondelēz CEO Irene Rosenfeld made more than $16.7 million in 2016 – about $8,000 per hour.

“Greedy CEOs are continuing to get rich off the backs of working people,” said Michael Smith, who was among hundreds of Nabisco workers from the South Side of Chicago laid off in March of 2016. “I loved working at Nabisco, and I took pride in the work I did to make a quality product. It’s not as if the company isn’t profitable. The Oreo alone brings in $2 billion in annual revenue, and the CEO makes more in a day than most of us made in a year. I just don’t understand the disrespectful attitude toward working people.”

While companies are continuing to put profits over people, working people are fighting back. The AFL-CIO has endorsed the Bakery, Confectionery, Tobacco Workers and Grain Millers’ International Union (BCTGM) boycott of Nabisco products made in Mexico.

These corporations are just examples of the insatiable greed that has taken over Corporate America.  The never ending race to the bottom continues to punish worker, shipping their jobs overseas.  To begin to address the growing income inequality in America, we must first address the outrageous pay ratios between CEO’s and rank and file workers.

Leo W Gerard: Another GOP Tax Plan For Captains

Donald Trump
Image by DonkeyHotey CC FLIKR

It’s based on the same voodoo economics we’ve heard many times before.

As he ran for office, Donald Trump repeatedly reminded audiences that he was “really, really rich,” but assured voters that as president he would be a working man’s champion, a blue-collar Superman.

He said he would stop corporations from offshoring manufacturing jobs with a border adjustment tax on imports. He would end trade cheating and declare China a currency manipulator on his first day in office. He would launch within his first 100 days a $1 trillion infrastructure improvement program to create millions of jobs fixing the nation’s airports, bridges and roads.

Trump’s record of promise-keeping to America’s working men and women in his first 100 days is this: So far, no good. The tax plan, well, the one-page tax sketch that the administration released last week is symbolic. While it would slash federal levies on fat cats and corporations, administration officials refused to say it would help the middle class at all. And it contains no border adjustment tax.

The tax plan rewards the captains of industry, the captains of Wall Street, the captains of real estate, like, well, like Trump himself. But the middle class, not so fast. The poor, not at all. Someone needs to tell Donald Trump that banksters and real estate tycoons sporting navy golf polos aren’t blue-collar workers. The tax scheme, like so many of Trump’s other pledges to workers, is a stab in the back of that indigo shirt.

On the campaign trail, Trump said rich people like him should pay more in taxes. Yet, the tax plan he offered last week would cut his taxes – by tens of millions a year. That’s because it would eliminate the alternative minimum tax. This is a levy intended to require billionaires like Trump to pay at least something after subtracting their multitude of special-rich-people deductions.

Trump has refused to release his tax returns – the first American president to keep them secret since Gerald Ford, who provided summaries. But Trump’s 2005 return, uncovered in part by a newspaper, shows that he had to pay $31 million as a result of the alternative minimum tax.

Trump’s plan also calls for eliminating the estate tax. That is paid only by people who inherit more than $5.5 million – as Trump’s children will. And it calls for cutting by more than half, to 15 percent, the tax paid by entities called pass-through corporations. Trump’s attorneys indicated in his presidential financial disclosures that his approximately 500 businesses are almost all pass-throughs.

Trump will be hobnobbing with his country club buddies in benefitting from this break. A 2015 study by the nonpartisan National Bureau of Economic Research found that the top 1 percent gets 69 percent of pass-through income.

Right now, a worker can’t get in on that low 15 percent tax rate unless reporting income below $37,950. But doctors and lawyers and investment bankers would get that special discount rate, no matter how much they make, as long as they pay a few bucks to establish a pass-through corporation. Trump’s plan would allow a lawyer paid $1 million a year to cut his taxes by $180,000 by setting up a pass-through.

Certainly, with all of those perks going to the nation’s most wealthy, Trump’s tax men would assure workers that they will benefit too.

Not really. When asked on ABC’s “Good Morning America” last week whether the middle class would pay more under the plan, Treasury Secretary Steven Mnuchin said: “I can’t make any guarantees.”

And the director of Trump’s National Economic Council, Gary D. Cohn, could not say how much of a break – if any­ – a middle-income American would get under the plan.

If it’s not absolutely clear who Trump’s tax plan would benefit, there’s also this from George Callas, the senior tax counsel for the Speaker of the House. Callas wants a permanent break for corporations, saying of a temporary one:

“It would not alter business decisions. It would not cause anyone to build a factory. It would just be dropping cash out of helicopters on corporate headquarters for a couple of years.”

Lots of small towns in Ohio, Michigan and Pennsylvania – towns that suffered when corporations offshored factories, towns that voted for Trump – would really benefit from cash dropping out of helicopters for a couple of years.

But that’s not Trump’s plan.

Trump’s money men, Mnuchin and Cohn, said slashing levies on the wealthy will pay for itself because giving the rich more cash will spur economic growth. So, no need to worry about Trump’s tax cuts ballooning the national debt, they assured.

This is called the Laffer Curve. Really.

Economist Arthur Laffer, an adviser to Trump, explained to the Washington Post last week that it works like this: “When you think about cutting that corporate rate, let’s say, from 35 to 15, that’s not going to cost you any money.”

He convinced the likes of Ronald Reagan and George W. Bush this hocus-pocus would work. And now, he has bamboozled Trump.

Both Reagan and Bush cut taxes. Both also left the country with larger deficits and uneven economic growth. Reagan raised taxes several times after his initial 1981 cut. Bush gave the country the Great Recession.

Laffer still insists his curve works, contending, “It’s a no-brainer.”

No. It’s voodoo economics. That’s what George H.W. Bush called it.

The Committee for a Responsible Federal Budget, a nonpartisan group that advocates fiscal restraint, estimated that Trump’s Laffer tax plan could reduce federal revenue by $3 trillion to $7 trillion over a decade. The economy would need to grow at a rate of 4.5 percent to make that proposal self-financing.

It grew at a pathetic 0.7 percent during Trump’s first quarter in office. In President Obama’s last quarter, the fourth of 2016, it increased at 2.1 percent. To rise at 4.5 percent would be phenomenal. Maybe paranormal.

Maya MacGuineas, president of the Committee for a Responsible Federal Budget, put it this way: “It seems the administration is using economic growth like magic beans: the cheap solution to all our problems.”

Ronald Reagan, who like Trump was adored by blue-collar workers, promised that benefits from his massive tax cuts for the rich would trickle down to the rest. That never worked. But now Trump is taking advice from the same Svengali and promoting the same flim-flam plan.

Those heartland workers can’t tolerate another hit. But it’s not just taxes. The health insurance proposal Trump is pushing would cost many low- and middle-income workers thousands of dollars more a year. Trump has proposed eliminating the Chemical Safety Board, which prevents workplace deaths. He delayed rules protecting workers from deadly silica and beryllium. He signed a law ending a requirement that large federal contractors disclose and correct serious safety violations. Trump has no federal infrastructure plan and reneged on naming China a currency manipulator.

These are all the actions of a president protecting the captains of commerce, not one championing blue-collar workers.

The Media Are Not The Only Ones Who Believe Trump Should Release His Taxes And Divest From His Company

By now, you have probably already heard about the train wreck that was President-Elect Trump’s first press conference as the President-Elect and his first press conference since July of last year as a nominee.

During the press conference a few key issues were supposed to be resolved mainly dealing with the President-Elect’s business and his potential conflicts of interest.

Trump has continued to say that the President cannot have conflicts of interest and that he will do whatever is necessary to resolve any potential conflicts that stem from his business. Part of the problem is that we do not even know what those conflicts are because we have not seen his tax returns to see what investments he holds or has direct dealings with that could be impacted by decisions made by the federal government.

Trump announced that his sons would be taking over the family business while he is President but will not be divesting from the company in any way.

“President-elect Trump’s planned arrangement with the Trump Organization falls far short of what’s necessary to avoid conflicts of interest and Emoluments Clause violations that will dog his administration and severely undermine the public’s faith in government,” said Common Cause Vice President for Policy & Litigation Paul S. Ryan. “Common Cause has called on President-elect Trump to divest from the Trump Organization and put his wealth into a blind trust managed independently from him. Instead, he’s decided to retain full ownership of the Trump Organization and have two of his sons run it—no divestment and no independence.”

“These are the same two sons who recently had their name attached to an inauguration fundraiser that promised access to their father for those willing to pay $1 million dollars. The event was cancelled but the precedent was troubling,” Ryan continued.

Common Cause describes themselves as “a nonpartisan, grassroots organization dedicated to upholding the core values of American democracy. We work to create open, honest, and accountable government that serves the public interest; promote equal rights, opportunity and representation for all; and empower all people to make their voices heard in the political process.”

“It is clear from President-Elect Trump’s statement and answers today that he will not fully separate himself from his business transactions and potential conflicts of interest. He also has no intention of disclosing his financial interests, as past presidents have done. His response to these legitimate questions was simply ‘trust me.’ Our democracy and the American people deserve better,” said NH Congresswoman Carol Shea-Porter.

Shea-Porter has cosponsored legislation to hold President-Elect Trump accountable and to investigate the Russian interference in the U.S. elections to remedy this dangerous situation. H.R. 371, the Presidential Conflicts of Interest Act, and H.R. 356, which would establish a bipartisan commission on the Russian interference in our elections, will protect our democracy and ensure that the President-Elect cannot enrich himself and his family while conducting the official business of the United States. Congresswoman Shea-Porter has also cosponsored H.J.Res. 26, which would deny Congressional consent for President-Elect Trump to accept any present, Emolument, Office, or Title of any kind from a foreign leader or government.

“The legislation I have cosponsored would apply the ethical standards, norms, and precedents that have been developed over decades to our incoming administration, which refuses to follow them. I urge Speaker Ryan to put these measures to a vote and pass them with the urgency these critical issues demand,” continued Shea-Porter.

“The American public must now demand complete transparency of the Trump Organization and President-elect Trump’s finances. Such transparency is America’s only hope for protecting itself against conflicts of interest and Emoluments Clause violations—and holding President-elect Trump accountable for his promises to avoid conflicts and violations of the constitution,” Ryan added.

During the campaign Trump confirmed he would release his taxes after the election however now that he is the President-Elect he is stating that it is only the media who wants to see his tax returns.   This is simply not true.

Paul S. Ryan stated that Common Cause’s 700,000 members are also demanding to see his tax returns.

“The President-elect must take additional steps immediately to safeguard the integrity of the office of the President. To begin with, Trump must release his taxes and quit hiding the facts and the potential conflicts from the American people. At today’s press conference, when asked to release his tax returns, the President-elect rejected the request and claimed that the ‘only one that cares about my tax returns are the reporters.’ Common Cause’s more than 700,000 members and supporters care about the President-elect’s tax returns and additional financial disclosure. We demand it.”

What exactly is he hiding by not releasing his taxes? Is he hiding the fact that he has failed to pay anything in taxes for the last few years due to loopholes in our tax laws? Is he hiding the fact that he and his company have been doing business with foreign governments that are currently under sanction from the US Government? Is he hiding the fact that he will gain massive amounts of wealth from simple policy changes he can make as President?

We do not know because he is hiding it all from us.

It is time to come clean and do what he promised to do: release his taxes, fully divest from his company and put all of his assets in a blind trust.

Small Business Owner Destroys Trump On Taxes And Business Practices

Small Business Owner to Undecided Voters: Donald Trump is a Recession Waiting to Happen

Washington, D.C.-  Today Main Street Alliance (MSA) released its first political web ad, featuring MSA Executive Committee member and small business owner Kelly Conklin. Polling suggests Donald Trump’s path to the presidency must include winning New Hampshire. That is why it is so important to Kelly and Main Street Alliance that voters in the Granite State hear the voice of real small business owners before casting their ballots. 

Check out Kelly’s video appeal to New Hampshire’s undecided voters. View the full 75-second version HERE and the shortened 30-second version HERE.

A poll conducted in September found nearly 60 percent of small business owners siding with Donald Trump. With less than two weeks until Election Day, Conklin, owner of Foley-Waite LLC, a woodworking company in Kenilworth, New Jersey, makes his case against a Trump presidency.

“Donald Trump is a recession waiting to happen,” Kelly says. “And on November 8th you have a choice, whether we are going to go ahead on a steady course or whether we are going to plunge the country into one of its darkest eras ever. The master of disaster or a proven entity who can do the job.”

Amanda Ballantyne, National Director of MSA, said Trump’s behavior and business practices inspired the group to speak up.

“Donald Trump’s rhetoric throughout the election has been toxic and dangerous. His almost glib explanations for his tax avoidance and bad business practices, and shirking small business owners he works with shows a misunderstanding of what it takes to make our economy thrive,” said Ballantyne. “For that reason, we can no longer sit on the sidelines. We worked with our members to produce this video expressing the concerns of real small business owners who have earned their success by doing business the right way.”

Full 75 sec video below.

[Leo W Gerard] Donald Trump: Valueless

Warren Buffett threw down the gauntlet to Donald Trump again last week. It happened after Trump lied about Buffett’s federal income tax payments on national TV.

During the second presidential debate on Oct. 9, Trump said Buffett “took a massive deduction,” suggesting it was the kind that the Republican nominee used for years to dodge income taxes.

The next morning, Buffett reported to the world that he paid federal taxes every year since 1944 when he was 13. He owed $7 then. Last year, he paid $1.8 million, about 16 percent of his $11.6 million income. He gave $2.858 billion to charity that year. Yes, that’s billion with a b.

By contrast, Trump’s “charitable” foundation is under investigation for self-dealing, and he is the first presidential candidate in 40 years to refuse to disclose any federal income tax information.

In August, Buffett, who is six times richer than Trump, challenged the Republican nominee to a tax throw down. The point of honor in that duel would be revealing their returns. Buffet pointed out that both men are under audit, so that would be no excuse to chicken out. Still, Trump begged off.

Image By DonkeyHotey on FLIKR

Image By DonkeyHotey on FLIKR

It’s not enough for a presidential candidate to boast before adoring crowds. It’s crucial that candidates both embody and demonstrate American values. Those standards don’t include lying or shirking taxes or bragging about sexual assault or creating a charity to pay a candidate’s own bills. Buffett demonstrates American values in both words and actions. Trump displays utter obliviousness to those values.

Trump claims he’s going to be the law-and-order president. But in the second presidential debate, he admitted he used a nearly $1 billion business loss to avoid paying federal income taxes for years.

That means he didn’t contribute to uniforms or cars or guns for FBI agents or offices for federal prosecutors or salaries for federal judges. He’s a $10 billionaire. But he didn’t participate. He didn’t help pay for law and order. Or for veterans’ hospitals or protective gear for military personnel, for that matter. Or border patrols. He’s all bluster, but no action when the dollars count.

Trump said “that’s smart,” when confronted with his tax shirking. To mill workers and waitresses and school teachers, whose federal taxes are deducted from every paycheck, it’s not smart. It’s cheating. It’s dishonorable. It’s unethical.

Like virtually all wealthy people, Warren Buffett paid less than half the highest marginal rate of 39.6 percent. His was lower because of deductions for charitable contributions and state income taxes.

Buffett has said repeatedly, however, that such a low rate for the wealthy is inappropriate. He thinks it should be 30 percent, no matter the deductions, for anyone earning more than $5 million. That’s called the Buffett Rule because he has so strongly espoused it.

By contrast, Trump wants to lower taxes on the wealthy.

Despite Buffett’s billions, he believes in a very basic American value, the meritocracy. He plans to give 99 percent of his $65 billion fortune to philanthropic causes during his lifetime. That means his three children will inherit precious little. He explained the philosophy behind that to Fortune magazine, saying he would give them, “enough money so that they would feel they could do anything but not so much that they could do nothing.”

Giving any child, as he put it, “a lifetime supply of food stamps just because they came out of the right womb” was harmful and an antisocial act. That is a man who opposes aristocracy.

By contrast, Trump would slash the current inheritance tax by more than half, an act that would sustain aristocracy in America, like the one Trump’s own fortune arose from.

Buffett started giving his money away in 2006. He pledged most of it to the Bill and Melinda Gates Foundation. Not long afterward, the three billionaires asked other wealthy Americans to pledge at least half of their fortunes to charity.

In a letter making that request, Buffett wrote, “The asset I most value, aside from health, is interesting, diverse, and long-standing friends.”

He said living in America, luck and compound interest had brought him wealth, and he and his family felt gratitude for that. If they were to spend more than 1 percent of their fortune on themselves, he said, their happiness and well-being would not be enhanced. “In contrast, that remaining 99 percent can have a huge effect on the health and welfare of others. That reality sets an obvious course for me and my family. Keep all we can conceivably need and distribute the rest to society, for its needs.”

That is an American value: help others pull themselves up by their bootstraps.

Donald Trump did not pledge 50 percent of his fortune to charity. In fact, his relationship with charity is truly suspect. His namesake foundation is under investigation. A new report by the New York Daily News raises doubts about whether Trump ever paid the $10,000 he pledged to 9/11 funds. And it took public badgering on Twitter late in May by Washington Post investigative reporter David A. Fahrenthold to get Trump to finally pay to veterans’ groups the $1 million Trump had promised at a Jan. 28 nationally televised fundraiser.

Fahrenthold also found that what appears on its face to be Trump’s charitable group, the Donald Trump Foundation, may not really be much of a charity. It gave money improperly to a political candidate, then lied about it on an IRS document. It may have violated laws against self-dealing by using $258,000 in foundation money to settle lawsuits against Trump and to purchase two massive portraits of Trump and a Tim Tebow football helmet. And Trump failed to properly register the foundation after he stopped giving his own money to it in 2008 and used other people’s money to fund it.

That’s not very charitable.

After Trump boasted during the campaign that he donated millions, the Washington Post made a concerted effort to track down those gifts. It couldn’t find millions. It discovered that between 2006 and May of 2016 Trump gave less than $800,000. That would be less than $80,000 a year. From a guy who claims to be a billionaire.

That does not appear to be much of an effort to help Americans who were born with no spoon in their mouths.

Buffett urged the wealthy to join him in giving to charity to aid those who drew short straws in life. Donald Trump urged the wealthy to give to his charity to aid his ability to buy portraits of himself.

America expects more in its presidents.

Powerful New Coalition Aims To Advance Bold Wall Street Reform Agenda

Labor organizations and community groups representing 25 million Americans unite behind tough agenda: closing Wall Street tax loopholes, making banks smaller and simpler, curbing predatory lending, and more 

Senator Elizabeth Warren (image by Ninian Reid FLIKR)

Senator Elizabeth Warren (image by Ninian Reid FLIKR)

U.S. Senator Elizabeth Warren (D-Mass.) today headlined an event in Washington, DC, where membership organizations, policy experts and elected leaders launched a new campaign for bold reforms to overhaul the country’s broken financial system. The Take on Wall Street coalition represents approximately 25 million Americans, including members of labor organizations like the AFL-CIO, AFT and CWA; grassroots community organizing networks like People’s Action and the Center for Popular Democracy; and others, including faith based organizations, MoveOn.org and the Working Families Party.  

As the 2016 campaign season has demonstrated, Americans across the political spectrum remain angry and frustrated with Wall Street and the Big Banks, which they see as both drivers and beneficiaries of a rigged system.  Wall Street billionaires continue to rake in outrageous profits through business practices that hurt working families—families that are still struggling to recover from the crisis Wall Street greed and recklessness precipitated eight years ago. Poll after poll demonstrates that most Americans strongly favor financial reform to support a fair economy.  

The Take on Wall Street campaign will advance a set of ambitious policy goals for a more equitable and inclusive economy.  The coalition members aim to convert the anger about Wall Street’s growing political and economic dominance into concrete, bold and lasting legislative gains at the state, local, and federal levels. 

“Hardworking men and women across the country want a fighting chance to build a real future for themselves and for their children,” Senator Elizabeth Warren said. “I’m glad to stand alongside the Take on Wall Street coalition to push for changes to make our financial markets safer and to create an economy that works for all our families. These are tough fights, but I know that if we get out there and stand together, we can win.” 

At the launch event, Take on Wall Street unveiled a five-point agenda to rebalance the economy so it is no longer rigged against working Americans: 

1.    Close the carried interest loophole which permits private equity and hedge fund managers pay a lower tax rate than most working Americans.

2.    Introduce a Wall Street speculation tax on sales of derivatives, stocks, bonds, and other financial products that would raise billions of dollars, bring banks closer to paying their fair of taxes, and stop some forms of destructive high-frequency trading outright.

3.    Make banks simpler, smaller and safer. End ‘too big to fail,’ and reinstitute the Glass Stegall separation between commercial and investment banks.

4.    Close the CEO bonus loophole, which permits corporations to pay less in taxes the more they pay their executives.

5.    End Predatory Lending and expand access to fair safe financial services by supporting the Consumer Financial Protection Bureau, and expanding access to fair and equitable banking through Postal Banking. 

This is a rare moment in history to achieve fundamental change. This campaign is about rewriting the economic rules. The proposals at the heart of this campaign will drastically improve the way financial services function and mean more money in the pockets of working families, and hundreds of billions of dollars to boost our economy,” said AFL-CIO President Richard Trumka. 

“Finance has become the master of the economy, rather than a tool to serve it. And the outsized influence of the financial industry defends and extends rules that reward the already extremely wealthy but leave everyone else behind,” said Lisa Donner, Executive Director of Americans for Financial Reform, a broad-based coalition that was formed to work for financial reform and create the Consumer Financial Protection Bureau. “This campaign is about moving people into action to demand change that will unrig the game and build a financial system that works for working people.” 

“Predatory lenders and tax-avoiding corporations work in concert to extract wealth from my community, leaving my customers, the lifeblood of my business, trapped in a perpetual cycle of debt and absorbing a larger share of our mutual tax responsibility. We must usher in a set of rules that reins in predatory lending, holds corporations accountable to pay their fair share in taxes, and returns the wealth of communities to the hands of local consumers,” said David Borris, owner of Hel’s Kitchen Catering in Chicago and member of the Main Street Alliance Executive Committee.   

In coming weeks, the campaign will host a tele-town hall with leading champions of reform, and launch a wave of direct actions and media events to call attention to some of the worst Wall Street practices that call out for reform, with particular emphasis on closing the carried interest loophole, which campaign leaders describe as a particularly glaring example of the corrupting influence of Wall Street campaign and lobbying dollars.  

Campaign partner organizations say that they will continue to press elected officials, regulators, and candidates at all levels of government throughout the summer and into the fall. The coalition will focus on naming the executives, legislators, and big banks and financial companies who continue to put our economy in jeopardy – while also shining a light on those champions who are taking action to make Wall Street accountable to working families.  

Current partners in the campaign include:  

  • AFL-CIO
  • Alliance of Californians for Community Empowerment (ACCE) Action
  • American Family Voices
  • American Federation of State County and Municipal Employees
  • American Federation of Teachers
  • American Postal Workers Union
  • Americans Federation of Government Employees, AFL-CIO
  • Americans for Financial Reform
  • Campaign for America’s Future
  • Catholic Alliance for the Common Good
  • Center for Popular Democracy
  • Citizen Action NY
  • Communications Workers of America
  • Consumer Action
  • Courage Campaign
  • Daily Kos
  • Democracy for America
  • Economic Policy Institute
  • Friends of the Earth
  • HedgeClippers
  • Institute for Policy Studies, Global Economy Project
  • International Union, United Automobile, Aerospace, & Agricultural Implement Workers of America (UAW)
  • The Leadership Conference on Civil and Human Rights
  • Media Voices for Children
  • MoveOn
  • National Education Association
  • NETWORK, A National Catholic Social Justice Lobby
  • NYC Communities for Change
  • The Other 98%
  • People for the American Way
  • People’s Action Institute
  • Presente
  • Public Citizen
  • Rootsaction
  • Service Employees International Union
  • Strong Economy for All Coalition
  • The Nation
  • The Rootstrikers at Demand Progress
  • UNITE-HERE
  • Working America
  • Working Families Party

Sanders Singles Out Top-10 Corporate Tax Dodgers

Taxes Cartoon

Major Profitable Corporations Are Collection Tax Refunds While Avoid Paying Their Fair Share

MOUNT PLEASANT, Iowa – Taking aim at how corporate America has rigged the economy, Bernie Sanders on Friday pledged to close tax loopholes like a law that lets profitable corporations exploit offshore tax havens to avoid paying U.S. income taxes.

“Three major profitable corporations not only pay nothing in federal income taxes, they actually got a rebate from the IRS,” Sanders told a town meeting in a student center at Iowa Wesleyan University.

Overall, General Electric, Boeing and Verizon paid no federal income taxes during the combined 2008 through 2013 tax years. During that period, those three corporate giants racked up combined profits totaling more than $102 billion. In fact, they received income tax rebates from the Internal Revenue Service totaling more than $4.1 billion, according to a report from Citizens for Tax Justice.

“In America today we are losing $100 billion in revenue every single year because large corporations are stashing their profits in the Cayman Islands and other offshore tax havens,” Sanders said.

Sanders’ tax plan would close loopholes those and other corporations have exploited and use the revenue to create and maintain at least 13 million good-paying jobs by rebuilding our crumbling roads, bridges, water systems, railways, airports and more.

Sanders singled out GE, Boeing, Verizon and others on his Top 10 list of corporate tax dodgers during a swing through eastern Iowa three days before Iowa’s precinct caucuses. The senator from Vermont also has detailed a plan to reform the tax system.

To crack down on corporate tax avoiders, Sanders would:

  • End a rule allowing American corporations to defer paying federal income taxes on profits of offshore subsidiaries. Under current law, U.S. corporations are allowed to defer or delay U.S. income taxes on overseas profits until the money is brought back into the United States.
  • Prevent corporations from avoiding U.S. taxes by claiming to be a foreign company through the establishment of a post office box in a tax-haven country.
  • Eliminate tax breaks for big oil, gas, and coal companies.
  • Stop American companies from avoiding U.S. taxes through corporate inversions.
  • Close loopholes that allow U.S. corporations to artificially inflate or accelerate foreign tax credits.

To see the list of the Top-10 corporate tax avoiders, click here.

To read more about Sanders’ plan to reform the corporate tax code, click here.

Clinton Unveils New ‘Fair Share Surcharge’ on Multi-Millionaires, Sanders Responds

 

Today at an organizing event in Waterloo, Iowa, Hillary Clinton unveiled a new surcharge on multi-millionaires to ensure these taxpayers pay their fair share so we can invest in creating good-paying jobs and raising wages for the middle class, not just those at the top.

Expanding on the central idea of the “Buffett Rule,” she called for imposing a four-percent “Fair Share Surcharge” on Americans who make more than $5 million per year – a measure that would only affect the top 0.02 percent of taxpayers. That breaks down to about 64,000 people who would see an increase. The remaining 99.98 percent of taxpayers would be unaffected.

“It’s outrageous that multi-millionaires and billionaires are allowed to play by a different set of rules than hard-working families, especially when it comes to paying their fair share of taxes,” said Hillary Clinton. “I disagree with Republicans who say that America needs yet another massive tax cut for the very rich. That’s the exact opposite of what we should do. Instead, let’s make sure the rich pay their fair share. That’s what my proposal would do. It would let us make the investments we need to create more good-paying jobs and make college more affordable. That’s what American families need – not another giveaway to the super wealthy.”

Clinton has pledged that she will not raise taxes on middle-class families and has already proposed tax relief for college and health care costs.

In the United Stated the middle class is defined as the middle three quintiles (20% brackets) of the income distribution. In 2012 you would be considered middle class if you made between $21,000 and $104,000 a vast majority of the population. The true middle 20% is between $30,000 and $65,000 with a true median wage of $52,000 a year (per household).

To be true to her word, Clinton would not be raising taxes on the middle class if she increased taxes on those making $105,000 (in 2012) a year.

Clinton’s “Fair Share Surcharge” is a direct way to guarantee that effective tax rates rise for the taxpayers most likely to avoid paying their fair share through tax gimmicks and exploiting loopholes.

Clinton’s proposal would force Americans making more than $5 million per year to pay an effective rate higher than middle-class families, along with other measures she has proposed to close loopholes such as the “Buffett Rule.”

Michael Briggs, spokesperson for the Bernie Sanders campaign, quickly responded to Sec. Clinton’s proposal to put a surcharge on .02% of the wealthiest Americans.

“At a time of grotesque income and wealth inequality and when trillions of dollars have been transferred from the middle class to the top one-tenth of 1 percent over the last 30 years, Secretary Clinton’s proposal is too little too late. In fact, it would raise less than half of what we need just to pay for paid family and medical leave. We need real tax reform which demands that Wall Street, corporate America and the top 2 percent start paying their fair share.”

The Sanders campaign is suggesting that we raise taxes on people who are currently making $290,000 (household) a year versus Clinton’s proposal to raise taxes on those making $5 million a year.

Leo W Gerard: Burn The TPP

Middle America is smoldering. For too long, average citizens worked harder and produced more, yet corporations cut pay and benefits, off-shored community-sustaining factories, killed family-supporting jobs and crushed opportunity.

GOP presidential candidate Donald Trump stokes that fire by urging Americans to blame anyone but corporations and corporate honchos like himself. One-percenter Trump and his fellow GOP candidates exhort average Americans to hate and fear Muslims, Syrian refugees, Black Lives Matter activists and undocumented immigrants.

This is a divisionary tactic. The intent is to split workers into small sub-groups so they lose strength in numbers. And it’s a diversionary tactic. The ungodly wealthy like Trump, who have taken for themselves all the economic gains from increased worker productivity, finger someone other than one-percenters as the culprit for middle-class wage stagnation and provoke workers to fight among themselves.

Division and diversion help the one percent capture government, securing policies that further enrich the rich, like trickle-down economics under which no benefits ever actually descend, bailouts for Wall Street but not Main Street and job-destroying trade deals like NAFTA and the proposed Trans-Pacific Partnership (TPP). In a real democracy, one where government serves the 99 percent, the smoldering in America would be piles of discarded TPP texts.

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Burning it was advised last week by the Labor Advisory Committee on the TPP, a group established by Congress that includes representatives of every major labor union and labor coalition in America, among them mine, the United Steelworkers (USW). In a 120-page report, the committee detailed exactly how the proposed TPP would injure working Americans and foster the closing and off-shoring of vital American industry, such as steel, aluminum and vehicle manufacturing.

TPP negotiators should start over, the Labor Advisory Committee said. They should produce a deal that puts workers first, not corporations and the one percent.

Unlike labor groups, giant multinational corporations, especially those like Nike andWalmart that exploit slave-wage labor overseas, love the TPP proposal. They hype it using diversion. Look, the U.S. Coalition (of massive corporations) for the TPP says,here’s a map showing how much each U.S. state exports to the 11 other Pacific Rim countries in the proposed deal.

It’s classic hocus-pocus. What the map fails to show is how much each state imports from the 11 countries. And that’s the problem.

When imports exceed exports, creating a trade deficit, Americans lose jobs. That’s exactly what happened under NAFTA. That deal cost more than 845,000 U.S. workers their jobs as their factories closed or moved south of the border and consumers then bought goods manufactured in Mexico rather than in the United States.

The same thing happened after the United States agreed in 2001 to allow China into the World Trade Organization. The resulting trade deficit eliminated or displaced 3.2 million American jobs.

Every time one of these trade deals is proposed, corporations eager to replace American factory workers with long-hour, low-wage foreign laborers promise exports will rise. And often they do. But imports rise much more. And as more stuff is shipped to the United States, American factories close. American workers lose their jobs. And the American middle class shrinks.

The Labor Advisory Committee urged TPP negotiators to include strong, enforceable measures in the deal to prevent this pattern from recurring. They didn’t.

In fact, under the TPP, American workers would lose protections. For example, as it is now, the U.S. government can specify that tax dollars go to create jobs in the United States under the Buy America and Buy American programs. When the federal government builds a new highway or helps fund a sewage treatment plant, it has the right to specify that the steel and concrete be made by American workers in the United States.

The TPP would limit that. Under the TPP, American tax dollars spent on public projects could go to create jobs in Vietnam or Malaysia or Brunei. That means more American jobs lost. But look away, multinational corporations say. Don’t think about those disappearing opportunities.

The TPP also would thrust middle-class American into a wage race to the bottom by pitting them against foreign workers paid pennies per hour and against child and forced laborers. The TPP would, for example, allow Vietnam to do absolutely nothing for five years about violations of workers’ rights in certain areas while the country immediately receives the benefits of tariff cuts on its products exported to the United States. That would put American workers in competition with those in Vietnam earning an average of $150 a month.

But look away, stateless multinational corporations say. Don’t think about the fact that, after inflation, the vast majority of American workers’ wages have flat-lined or fallen since 1979, and the TPP would, clearly, worsen that terrible trend. Don’t worry, multinational corporations say, the TPP would require nations to establish and enforce minimum wages. Don’t think about the fact that the TPP fails to set any sort of standard, enabling a country to institute a minimum wage of 5 cents an hour. Or less.

The Labor Advisory Committee sought to protect American workers by asking the TPP negotiators to include strong measures to stop currency manipulation and to require a high percentage of a product to be manufactured within a TPP country for it to be exempt from tariffs when exported to the United States.

The negotiators did neither. That’s no surprise since they were formally advised by 500 corporate lobbyists. Instead of increasing the percentage of a product that must be manufactured in a TPP country, the deal would lower it when compared to the standards in previous trade pacts.

Rather than penalizing currency manipulation, the TPP would do nothing more than evaluate the practice that countries like Japan and Vietnam use to artificially lower the price of their products while raising the price of American-made exports.

The multinational corporations that want to manufacture in low-wage, low-environmental-protection foreign countries say: Look, there’s something about currency manipulation glommed onto the bottom of the TPP.  It’s not part of the main deal, doesn’t include strong language and isn’t enforceable. But, look away. Check out that guy who speaks broken English standing on the street corner trying desperately to get work as a day laborer.

The Labor Advisory Committee wants average Americans to look directly at this bad trade scheme and the self-dealing corporations pushing it. The measure of trade success should be improving broadly shared prosperity, increasing family-supporting jobs and raising middle-class wages. Corporate profits should rise as well. But the first priority, in a democracy, should be people, not corporations.

The proposed TPP fails this test. Americans’ anger should be directed where it’s deserved. Not at Muslims or Hispanics. But at any politician who would vote to approve this proposal to further lower their wages, destroy their jobs and diminish their economic opportunity.

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