The Congressional Progressive Caucus has countered the Trump and GOP budget proposals with one of their own -- called The People's Budget: A Roadmap For The Resistance. Yesterday, I brought you parts one and two of that budget. Here are parts three and four:
3. FAIR TAX SYSTEM FOR WORKING FAMILIES
Our current federal tax system is rigged to benefit large corporations and the wealthiest few at the expense of middle-class families, those working to enter the middle class, and small businesses. It encourages multinational corporations to shift profits and jobs overseas. It allows some hugely profitable companies to pay nothing, or next to nothing in taxes, while working people and small business owners who play by the rules are left to foot the bill. It taxes hedge fund managers at a lower rate than ordinary workers. At the same time, the tax code is riddled with loopholes that allow for the richest and most powerful to play by their own set of rules and avoid contributing to our nation’s needs.
The CPC Budget follows the rule laid out by Treasury Secretary Steven Mnuchin that there should be “no absolute tax cut for the upper class.” With growing income inequality and corporate profits at record highs, the richest individuals and corporations should contribute more for the public investments that contributed to their success, not less. The CPC Budget raises revenue from those who can afford it so America can invest in infrastructure, education, and other critical priorities. It closes wasteful loopholes that mostly benefit very wealthy individuals and large corporations. And it expands vital tax credits to help working families make ends meet and achieve a better future.
Eliminate tax break for offshoring jobs and profits — Our corporate tax code is rigged to favor investment overseas by giving multinational corporations a special tax break on profits they earn outside the United States. Corporations currently owe $700 billion in taxes on $2.5 trillion worth of profits parked abroad. Today’s tax code lets them effectively put off payment in perpetuity through “deferral.” The deferral tax break gives multinationals two perverse incentives: (1) to create jobs abroad instead of here in America and (2) to avoid paying their fair share of taxes by funneling profits made in the U.S. to sham subsidiaries in tax havens like the Cayman Islands.
The CPC Budget ends deferral and requires multinationals to pay the taxes they owe on the profits they have stashed offshore. Ending the tax break for offshore profits would level the playing field for small and domestic businesses that currently face a competitive disadvantage, and it would ensure that multinationals contribute to the costs of the infrastructure, education, and national security that they rely on to do business. This reform would raise $901 billion in revenue.
Stop companies from renouncing American citizenship to dodge taxes — There has been a surge in U.S. companies expatriating for tax purposes by purchasing smaller foreign entities and reincorporating abroad to dodge U.S. taxes. Forty-seven of those “tax inversions” occurred between 2004 and 2014. Inversions allow formerly U.S. companies to still reap the benefits of doing business in America without paying their fair share of U.S. taxes.
Current law prohibits an inversion if the foreign company makes up 20 percent or less of the new combined corporation. The CPC Budget would incorporate Reps. Levin and Doggett’s Stop Corporate Inversions Act, increasing the foreign ownership threshold to 50 percent, reducing future inversions, and raising $43.8 billion in revenue.
Tax Wall Street to fund Main Street — Financial transaction tax: The CPC Budget includes a tax on Wall Street transactions. More than 30 countries around the world have some form of financial transaction tax, as did the U.S. until 1966. This policy would tax stock transactions at 0.25%, bond transactions at 0.004%, option premiums at 0.25% per year to maturity, foreign exchange transactions at 0.004%, and futures and swaps at 0.01%. The tax would reduce reckless speculation that adds uncertainty while driving up prices of key commodities. It would raise $1.8 trillion to invest in America.
Financial institution excise tax: The People’s Budget places a quarterly 0.035% tax on assets exceeding $500 billion as former Ways and Means Committee Chairman Dave Camp outlined in his tax reform proposal. The tax would raise $101 billion in revenue from some of America’s largest Wall Street institutions that contributed to the 2007-2008 financial crisis – including Citigroup, JPMorgan Chase, Bank of America, Goldman Sachs, Morgan Stanley, Wells Fargo, and AIG.
Close corporate tax loopholes — End taxpayer subsidies for executive bonuses: Our current tax law tells companies, the more you pay your executives, the less you pay in taxes. The disparity between CEO to worker pay skyrocketed to 335-to-1 in 2015. Working families and small businesses should not foot the bill for lavish corporate bonuses. The CPC Budget closes that tax loophole by putting an end to unlimited tax write-offs for executive pay and adopts Rep. Doggett’s Stop Subsidizing Multimillion Dollar Corporate Bonuses Act, saving U.S. taxpayers nearly $50 billion.
Close the stock option loophole: Our Budget repeals the "Facebook loophole," which allows companies to avoid $32 billion in taxes by deducting stock options cashed in by an employee at the inflated current market value rather than the original cost to the corporation.
End tax breaks for private jets: The CPC Budget ends the $3 billion tax giveaway to owners of private jets, replacing the generous five-year depreciation available to private jet owners with the seven-year schedule provided to commercial airlines.
Cut corporate meal and entertainment deduction: The People’s Budget lowers the frequently abused corporate tax deduction for meals and entertainment to 25%. Today, American businesses can write off 50% of the cost of meals and entertainment.
Eliminate the preference for investment income over labor income — A hedge fund manager can earn the same amount as salaried employee through a hard day’s work, but the employee on salary often pays a higher tax rate. Currently, the tax code gives preferential treatment to income from investments, long-term capital gains, and qualified dividends. The CPC Budget creates parity between investment and labor income. It also requires payment of capital gains tax on the entire change in an asset’s value (carryover basis) rather than exempting gains that a previous owner never paid taxes on (step-up in basis).
Ensure the rich pay their fair share — New tax rates for millionaires and billionaires: The CPC Budget preserves existing marginal tax rates for middle-class families while asking the richest Americans to contribute more to fund national priorities. It would restore Clinton-era tax rates from annual incomes above $250,000. For annual incomes above $1 million, it would adopt new progressive tax rates (Rep. Schakowsky’s Fairness in Taxation Act): 45% for $1 million-$10 million, 46% for $10 million-$20 million, 47% for $20 million-$100 million, 48% for $100 million-$1 billion, and 49% for $1 billion and over.
Estate tax reform: The estate tax raises vital revenue without costing middle-class Americans a dime. In fact, 99.7% of Americans do not face any burden from the estate tax. Those who do pay are multimillionaires and billionaires, including President Trump and several members of his Cabinet. The CPC Budget sets three estate tax brackets and creates a surtax for estates over $1 billion, identified in Rep. Schakowsky’s Responsible Estate Tax Act. It also expands the exclusion of farmland from the estate tax to ensure that family farmers do not face additional tax burden.
Cap tax deductions for highest tax brackets: Only 30% of households itemize tax deductions, and the benefits from deductions go overwhelmingly those with the highest incomes. An individual making $100,000 would get a $2,800 tax benefit on $10,000 of deductions. An individual making $1,000,000 would get a $3,960 tax benefit on the same $10,000 of deductions. The CPC Budget would limit the tax benefit of deductions at 28% so the millionaire gets the same tax benefit as someone making $100,000. This change raises $577 billion.
End tax break for vacation homes and yachts: The CPC Budget preserves the mortgage interest deduction for American homeowners on their primary residences while ending the $10 billion tax giveaway for vacation homes and yachts.
Strengthens tax credits for working families — The People’s Budget expands eligibility for the Earned Income Tax Credit to childless workers and supports the Child Tax Credit maximum deduction of $3,000.
4. JUSTICE AND FAIR ELECTIONS
The People’s Budget increases investments in programs to reform our criminal justice system and bring fairness and justice to all Americans. Our justice system has been dominated by racial disparities and The People’s Budget endorses significant changes to the criminal justice system, seeking to end excessively harsh criminal justice policies that result in mass incarceration and over-criminalization which stands in the way of a fair and equal society. We also invest in Department of Justice programs which investigate and take-on corporation monopolies and stop anti-competitive mergers.
Criminal Justice Reform — The CPC Budget supports criminal justice reforms which strengthen public safety, reduce unnecessary incarceration and the use of force. The People’s Budget also calls for rebuilding trust in the justice system by increasing funding for community oriented policing reforms.
Our budget endorses federal investments consistent with the goals of Rep. Bobby Scott’s (D-VA), Safe, Accountable, Fair, and Effective (SAFE) Justice Act of 2015. This bill takes a broad-based approach to improving the federal sentencing and corrections system, from frontend sentencing reform to back-end reintegration policies. It is also the first bill that addresses the federal supervision system – ensuring that probation does a better job stopping the revolving door at federal prisons. The legislation would reduce recidivism, increase the use of evidence- based alternatives to incarceration, curtail over-criminalization, reduce crime, and save money.
The People’s Budget also supports new funding for Second Chance Act re-entry programs consistent with the goals of the Second Chance Reauthorization Act of 2015. Our budget makes important investments aimed at improving the re-entry process for offenders in prisons, jails and juvenile facilities. Robust funding for housing, job training, medical care, education, and other re-entry programs will help drastically reduce the rate of recidivism and put ex-offenders on a path toward success in their communities again.
The CPC Budget provides robust funding for the Department of Justice’s Civil Legal Aid program to ensure states and localities have the funding to provide low-income individuals with rightful representation.
Gun Safety — The People’s Budget adopts policies and initiatives to significantly reduce gun violence. We support funding for 200 new special agents and investigators for the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF). Additionally, the budget would fully fund grants to local communities to help improve local recordkeeping and reporting to the National Instant Criminal Background Check System (NICS).
Ending Racial and Religious Violence — The CPC is deeply concerned with racial and religious profiling in communities throughout the U.S. which has led to increased violence against Muslim, African American, and Latino populations. The People’s Budget devotes significant resources to Department of Justice programs which empower communities to end racial profiling by law enforcement and to also crack down on the rise of hate crimes which we have seen across the country. Education is critical to prevent violence and discrimination of religious and racial minorities.
Voting Rights — The CPC Budget calls for increased funding for the Department of Justice’s Voter Protection Program and voter protection agencies, including funding for the Help America Votes Act to ensure American’s have access to the polls and do not have to wait in excessively long lines in order to exercise their right to vote. The People’s Budget would also ensure states and localities have the funding they need to have modern voting technology to protect voting machines from electronic hacking and ensure that every vote is counted accurately.
Public Financing of Campaigns — In the aftermath of the Citizens United decision, the wealthy and well-connected have flooded our politics with big-money campaign contributions. Corporations are not people and elections should never be bought. The People’s Budget adopts Rep. Sarbanes’ Government by the People Act and provides $10 million for the public financing of campaigns and invests in the Federal Election Commission. Public financing gives a voice to small donors that have been drowned out. It is more important than ever to make sure every American’s voice is heard and provide candidates with alternatives to financing their campaigns. Public financing and rigorous enforcement of election finance laws keeps politicians accountable to the voters that elect them instead of to special interest money.
Taking on Monopolies and Anti-Competitive Behavior — In recent years, the wave of mergers in nearly every sector of the US economy has imposed significant costs on our economy and slowed economic growth. This consolidation of economic power in fewer and fewer hands has led to stagnating wages, increased costs to consumers, less private sector investment, and less innovation. The People’s Budget would revitalize the work of the Department of Justice’s Antitrust Division and Federal Trade Commission’s Bureau of Competition by increasing their budgets by 20 percent, which would allow for the hiring of 200 additional attorneys and support staff. Increased enforcement of Section 2 of the Sherman Antitrust Act and additional scrutiny of mergers will help stop powerful corporations from rigging our economy and corrupting our political system.
