Blog - Federal Policy
497 posts
Action (lack thereof) on Economic Aid Reflects Longstanding Anti-Government Agenda
August 14, 2020 • By Amy Hanauer
The biggest danger we face right now is that politicians will fail to get this health crisis under control and Americans will continue to die. The second biggest danger is that elected officials will fail to help families and communities, leading to foreclosures, evictions, and impoverishment—and also torpedoing the economy. With their inaction this week, the Senate seems determined to do both. Hold on everyone, we’re in for a sickening ride.
Between the Lines: Amazon Q2 Report Hints It Will Avoid Taxes on This Year’s Record Profit Haul
August 5, 2020 • By Matthew Gardner
The House Judiciary Committee last week held an antitrust hearing to scrutinize Amazon and other tech companies’ growing dominance. A look at the online retail giant’s new quarterly report and past tax avoidance reveals why lawmakers should be equally concerned about how the tax system allows dominant, profitable corporations to avoid most or all federal tax on their profits. Amazon, yet again, is poised to pay little or no federal income tax on its record profits, and it appears likely to do so using entirely legal tax breaks for stock options and research and development.
Sorry, States: GOP Senate Ignores Need for Federal Relief to State and Local Governments
July 31, 2020 • By Meg Wiehe
During the Great Recession, the most ambitious state revenue-raising efforts closed just 10 percent of shortfalls and most states relied heavily on federal aid and budget cuts to balance their budgets. Of course, states can and should turn to progressive revenue-raising options now, but as the pandemic rages on, the extent of this crisis will become too significant for states and localities to handle on their own. The federal government should step in to help.
Biden’s Minimum Corporate Tax Proposal: Yes, Please Limit Amazon’s Tax Breaks
July 29, 2020 • By ITEP Staff, Matthew Gardner, Steve Wamhoff
A large majority of Americans want corporations to pay more taxes and Democratic presidential candidate Joe Biden has several proposals to achieve that. The newest idea is to require corporations to pay a minimum tax equal to 15 percent of profits they report to shareholders and to the public if this is less than what they pay under regular corporate tax rules. A recent article in the Wall Street Journal quotes several critics of the proposal, but none of their points are convincing.
Americans are demanding policy that meets the needs of this urgent moment. There are now competing proposals from the U.S. House and Senate: One is a reasonable response to the staggering crisis we’re in. One is not.
While the White House hasn’t clarified what it is proposing, we know that a payroll tax cut would not be well-targeted. In a new report, ITEP estimates the effects of suspending Social Security and Medicare payroll taxes for employees and employers from September 1 through the end of the year. We find that 64 percent of the benefits would go to the richest 20 percent of Americans while 24 percent of the benefits would go to the richest 1 percent.
SALT Cap Repeal Has No Place in COVID-19 Legislation: National and State-by-State Data
July 17, 2020 • By Steve Wamhoff
The Trump-GOP tax law enacted at the end of 2017 includes a $10,000 cap on the amount of state and local taxes (SALT) that people can deduct on their federal tax returns, and this is one of the few limits the law places on tax breaks for high-income people. Unfortunately, it is also the provision that some Democrats are most determined to remove.
Adequately Funding the IRS Would Be One Small Step Toward Racial Equity in the Tax Code
July 10, 2020 • By Jenice Robinson
IRS Commissioner Charles Rettig vowed to work with Congress to explore how the federal tax system contributes to the racial wealth gap. There are at least two ways this can happen: tax policies enacted by Congress and IRS enforcement of these policies.
Congressional Budget Office Confirms That IRS Budget Cuts Lose Money and Benefit the Rich
July 9, 2020 • By Steve Wamhoff
Lawmakers often claim that they are “saving” taxpayers money by slashing federal spending, but the truth is that these cuts often are counterproductive and costly in the long-term. One type of budget-cutting has costs that are immediate and obvious—cuts to the IRS, the agency that collects the revenue that pays for federal spending. A new report from the Congressional Budget Office (CBO) confirms that lawmakers’ anti-government, IRS funding-cuts zeal has increased the deficit.
White House Incredibly Still Believes Tax Cuts Are the Answer to America’s Problems
June 2, 2020 • By Steve Wamhoff
White House officials continue to discuss tax cuts in response to the COVID-19 pandemic. Steve Wamhoff provides a roundup of these terrible ideas that would do little to boost investment or reach those who need it most.
Trump-GOP Tax Law Encourages Companies to Move Jobs Offshore–and New Tax Cuts Won’t Change That
June 2, 2020 • By ITEP Staff, Matthew Gardner, Steve Wamhoff
New tax cuts to incentivize bringing jobs back to the United States will fail. No new tax provisions can be more generous than the zero percent rate the 2017 law provides for many offshore profits or the loopholes that allow corporations to shift profits to countries with minimal or no corporate income taxes.
Trump Administration Stops Pretending to Care About the Economy with Its Capital Gains Tax Proposal
May 28, 2020 • By Steve Wamhoff
Proponents of capital gains tax breaks have always offered a weak argument that they encourage investment and thereby grow the economy. But the Trump administration is now floating a temporary capital gains tax break, which is supported by no argument at all. It would only reward investments made in the past while doing nothing to encourage new investment.
The Health Economic Recovery and Omnibus Emergency Solutions (HEROES) Act includes important changes to business tax provisions in the CARES Act, the most recent COVID-19 legislation enacted by Congress and the president. The House-passed plan would undo CARES Act changes that make it easy for businesses to claim losses to reduce or avoid all taxes. […]
JPMorgan Chase CEO Jamie Dimon, in a May 19 memo to employees, outlines steps the company is taking to help its customers, small businesses and communities stay afloat. The part of the public relations memo that has received the most attention, however, is Dimon’s call for “rebuilding a more inclusive economy.” “It is my fervent […]
House Democrats today introduced a proposal that responds to our staggering economic crisis with the right policies at the necessary scale. It’s a refreshing change from some of the misdirected ideas that have passed or been floated in these alarming economic times.
Which Workers Wouldn’t Be Helped by a Payroll Tax Cut?
May 8, 2020 • By Jessica Schieder, Lorena Roque
New data released today estimates 20.5 million jobs were lost in the month of April alone. Workers not currently receiving paychecks would be left out of any benefits provided by a payroll tax cut.
Trump’s Latest Tax Break Proposals Include Everything—Except Helping Regular People
May 6, 2020 • By Steve Wamhoff
None of the tax proposals considered by the administration would provide help to those who need it or do much, if anything, to boost investment.
Trump’s Payroll Tax Cut Makes Even Less Sense as Job Losses Mount
May 5, 2020 • By Steve Wamhoff
Last August, long before COVID-19 ravaged the U.S. economy, the Trump Administration began touting a payroll tax cut as a stimulus. Now, with more than 30 million official unemployment claims and projections that the jobless rate could grow to Depression-era levels, the White House is claiming that a payroll tax cut is the best way […]
There is every reason to believe that Amazon will continue its tax-avoidance ways in 2020. The entirely-legal tax avoidance tools the company used to zero out its federal income tax bills over the last three years remain entirely legal today. From accelerated depreciation to the research and development tax credit to the deduction for executive stock options, Amazon’s tax avoidance tools have been blessed by lawmakers, and presidents, of all stripes.
A bipartisan group of governors and senators from Louisiana to Maryland to Ohio have called for at least $500 billion in state and local fiscal relief. They also need specific help with testing, protective equipment, unemployment costs, Medicaid costs, social services, education and infrastructure. States can’t be on their own as they address the double whammy of plunging revenue and skyrocketing needs.
The CARES Act Provision for High-Income Business Owners Looks Worse and Worse
April 24, 2020 • By Steve Wamhoff
A select group of millionaires will receive an average tax break of $1.6 million thanks to a CARES Act provision that is receiving delayed but well-deserved scrutiny. Wealthy business owners are receiving this windfall because the CARES Act provides tax breaks to people with losses from a business they own. This approach may seem sensible because businesses small and large are taking a hit from the economic recession, but on close inspection, these provisions benefit those least in need and can be easily abused.
Partying Like It’s 2017: How Congress Went Overboard on Helping Businesses with Losses
April 24, 2020 • By Steve Wamhoff
The Coronavirus Aid, Relief, and Economic Security (CARES) Act provides some needed relief for individuals and families, but two arcane tax provisions related to business losses will further enrich the wealthy and fail to boost our economy more broadly.
To Avoid the CARES Act’s Flaws, Invest in Automatic Relief
April 23, 2020 • By Jessica Schieder
With adequate automatic stabilizers, the United States might not end up with economic relief bills that have provisions tucked in them mostly helping millionaires, as we learned was the case with a CARES Act provision suspending limits on business losses. And regular people could get help more quickly, blunting the economic downturn.
Addressing the COVID-19 Economic Crisis: Advice for the Next Round
April 7, 2020 • By Steve Wamhoff
Americans need many things right now beyond tax cuts or cash payments. But for people whose incomes have declined or evaporated, money is the obvious, immediate need to prevent missed rent or mortgage payments, skipped hospital visits and other cascading catastrophes. So, what should Congress do next to get money to those who need it?
Last week, President Trump destroyed everyone’s coronavirus press conference bingo card by announcing that a conversation he had with celebrity chef Wolfgang Puck inspired him to propose restoring a corporate tax deduction for business entertainment expenses. Trump’s own signature tax plan repealed this break two years ago.
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