Archive for the ‘Congress’ Category

Weissman-FTT-memeFollow on Twitter

Now that the election and its tidal wave of dark money spending has passed, hopefully Congress will get to the process of governing. Granted, forging bipartisan alliances will be even more important as we usher in a new Congress, but holding Wall Street accountable for the financial crisis and reining in high speed trading is something leaders on both sides of the aisle should be able to get behind.

That’s why this fall Public Citizen and a diverse coalition of consumer, labor and economic policy groups hosted a congressional briefing outlining the benefits of a Wall Street Tax (sometimes called a Financial Transaction Tax or Robin Hood Tax) and explaining the great progress that’s taking place in Europe on this issue. But we’ve yet to gain even one Republican co-sponsor to this commonsense policy.

People — individual voices of constituents — are one of the best ways to get the attention of reluctant congressmembers. That’s where you come in. Public Citizen supporters like you have achieved some huge victories and reach very important milestones and we are calling on you to help us win another fight against Wall Street.

If you haven’t already done so, please send an email to your lawmaker in support of the tiny Wall Street Tax (three cents for every $100 traded) that would raise over $352 billion in less than a decade. Then take the next steps to help us win a Wall Street Tax: Watch and share the video below and share the image of Public Citizen President Robert Weissman calling for a Wall Street Tax.

Continue Reading

Share/Bookmark

Autumn is upon us. In addition to leaf color tours, pumpkins and cider, this fall has brought a political frenzy to Michigan as numerous members of the congressional delegation retire. Among the departing lawmakers is a real tax policy heavyweight, U.S. Rep. Dave Camp (R).

Camp soon will leave his position as chairman of the powerful U.S. House of Representatives Ways & Means Committee without having accomplished his chief goal of comprehensive tax reform. His languished swansong proposal to update the tax code, though flawed in many ways, offered some bold moves, like taxing banks and limiting executive pay.

In his remaining time, Camp should continue to push for such bold proposals. He also should focus on closing international tax loopholes that cost the U.S. an estimated $90 billion per year, and which allow some highly profitable companies pay no federal corporate income tax. With 150,000 Michigan families being hit by food stamp cuts, this is unacceptable.

Corporations avoid taxation in a number of ways, including using tax breaks that allow corporations to indefinitely put off — or “defer” — paying taxes on certain profits. One such scheme allows tax avoidance on some profits that appear to be made by foreign subsidiaries. Another huge loophole allows tax deferral on profits from interest made by foreign financial subsidiaries. Apple and GE are well known to make use of these supposedly temporary loopholes, which are bundled with 50 plus other tax breaks, referred to in Washington, D.C., as “extenders” because they are renewed every couple of years.

The package of corporate tax breaks is estimated to cost taxpayers more than $84 billion and up to nearly $700 billion over 10 years if they are continuously renewed. Even with that stunningly high price tag, the cost of these tax cuts won’t be held to the same standard as is applied to programs on which ordinary Americans depend. For example, House Republicans have refused to allow a vote on extending emergency unemployment benefits for the 3.6 million Americans who have been out of work for more than six months, unless the $25 billion-plus cost of the program is “paid for” with other cuts or tax increases.

Continue Reading

Follow on Twitter

In a move apparently to be more progressive and inclusive, Burger King recently changed its motto from “have it your way” to “be your way.” It’s good the company is trying to be more inclusive, but, the company’s recent decision to merge with Tim Hortons and move its headquarters to Canada which reportedly could score tax reductions for the company, is the opposite of progressive, it’s downright regressive.

By merging with Tim Hortons and reincorporating as a new company in our neighbor to the north, Burger King is deserting its American consumer base, leaving average citizens to pick up the tab for the lost taxes from a profitable U.S. business. A business that will continue to operate in our country, have management and workers here, despite becoming on paper a foreign entity.

The whopper of a tax move is called an “inversion” and it is a way for a company to transfer headquarters on paper to another county with lower tax rates or other policies that reduce the amount of U.S. taxes a corporation pays. Dozens of corporations have done it in recent years, and more have deals currently in the works. Each new company announcing its intent to defect to a foreign tax jurisdiction fans the flames of consumer displeasure.

Recently, America’s largest drugstore chain, Walgreens, made a tactical retreat and dropped plans to reincorporate after merging with a Swiss company in order to invert. After shoppers and activists united in calling on the company to stay true to its U.S. roots and pay its fair share of corporate taxes, Walgreens decided to keep its headquarters (and tax contributions) here in America.

Given all the rightful criticism of American people and press to the problem of inverted companies, it was welcome news when the U.S. Treasury Department announced last week that it is taking some small but positive steps that went part of the way toward addressing inversions. Treasury did that by limiting economic incentives of these inversion deals. The changes to the interpretation of the tax code took away some of the benefits of inversions like ending some types of subsidiary loans, restructuring deals, and cash and property transfers.

Currently, under the tax code, when companies merge and reincorporate in another country but retain 80 percent of their previous shareholders, they are classified as “inverted” under the tax code. That means the inverted company is treated as domestic for tax purposes and is not able to escape paying its fair share of taxes. The new changes from Treasury tighten up the “80 percent rule” by ensuring that companies aren’t able to artificially shrink via dividend payouts or grow by counting passive assets like cash in order to squeak in below the 80% previous shareholders threshold.

Continue Reading

Congressmembers on both sides of the aisle yesterday joined forces to pass the so-called “Jobs for America Act” (H.R. 4).

In the vote, 221 Republicans and 32 Democrats matched the absurd anti-regulatory rhetoric of the U.S. Chamber of Commerce and other Big Business groups with absurd anti-regulatory policy. The bill contains provisions designed to stifle, stall, shrink and stop safeguards the public relies on and includes the text of familiar deregulatory bills like the Regulatory Accountability Act and the REINS Act (which the House already has voted on). If enacted, H.R. 4 represents a green light allowing reckless corporations to do simply whatever they want with as little oversight as possible.

Big Business groups have been making hyperbolic claims about regulations killing jobs – and the inverse claim that gutting regulation will create jobs – for decades. The predictions never come true.

Consider the following examples from Public Citizen’s recent report:

  • 1974: The Occupational Safety and Health Administration bans the carcinogen, vinyl chloride. The plastics industry claimed that the OSHA regulation would kill 2.2 million jobs. Those claims were proven completely false. A new way to manufacture vinyl chloride was developed within a year without any jobs lost.
  • 1975: The National Highway Traffic Safety Administration increases the fuel efficiency standard. Industry reports warned that 1.5 million jobs would be lost. By 1985, automakers had met the higher standard without losing any jobs.
  • 1990: The Environmental Protection Agency sets new pollution standards under the Clean Air Act. Business Groups responded with doomsday hysterics, claiming up to 2 million jobs would be lost. Those were proven entirely wrong. Instead, according to the Investor’s Business Daily, “Pollution has been falling across the board for decades, even while the nation’s population and economy have expanded.”
  • 1995: EPA removes lead from gasoline. Monsanto claimed 43 million jobs would be killed. The removal of lead is now considered one of the biggest public health success stories while gas prices did not dramatically increase and no jobs were lost.

Continue Reading

The Permanent Subcommittee on Investigations has weighed in on the progress the Internal Revenue Service (IRS) has made after last years’ “scandal,” and the majority is advocating bright line rules for political activity for nonprofits.

Committee members criticized the current facts and circumstances test and called for its replacement, lending their voice to the many nonprofits and citizens that have been calling for a bright-line definition of political activity applicable to all nonprofits. Such a rule would make it easier for nonprofits to engage in our democracy without fear of jeopardizing their nonprofit status.

“The facts and circumstances test used by the IRS was criticized as difficult to administer by every IRS official interviewed,” says the report.  It goes on to say that the test “produced subjective and inconsistent decisions on applications.”

The minority staff filed a separate report, and did not discuss the facts and circumstances test or provide recommendations for the future. The full report is available here.

The IRS is currently engaged in a rulemaking that could provide the sort of easily administered definition the report – and Public Citizen’s Bright Lines Project – calls for. A new draft of the rules is expected early next year.

Emily Peterson-Cassin is the Bright Lines Project Coordinator for Public Citizen’s Congress Watch division

Sign up to receive a weekly email highlighting the best from Public Citizen’s blogs.

© Copyright . All Rights Reserved.