For most hard-working Americans, tax day means paying your fair share to support our national security, infrastructure and vital public services. For Americans as wealthy as President Trump and a number of large multinational corporations, it is more aptly called “tax break day.” With the Trump Administration turning its attention to tax reform, there are more questions than answers. President Trump may be skilled at cutting great deals for himself, but from what we do know, his tax priorities are shaping up to be a bad deal for all but the richest few.
Only he can “fix it”? — President Trump has bragged about bending the Tax Code to his whim. He has said only he can fix it. The question is whether he is going to “fix” it for himself, or fix it for working families. Before Congress considers Trump’s tax reform plan, the American people have a right to know the answer to this question, but we cannot until the President and his allies in Congress stop covering up his tax returns.
We know from media reports analyzing bits of his tax information that there are years where he paid nothing, or next to nothing in federal income taxes. From his recently exposed 2005 return, we know that had his own tax plan been in place, he would have actually paid a tax rate of 3.48 percent – akin to that paid by the poorest half of Americans – on over $150 million in income.
“Tax Break Day” for many multinationals–His tax returns would likely tell a tale of two Tax Days: one for the superrich and large multinationals who can afford armies of tax lawyers to make Swiss cheese of our tax code, and one for the working families and small businesses who pay what they owe.
A recent study from the nonpartisan Institute on Taxation and Economic Policy found that 18 multinational giants didn’t pay a dime in federal income taxes for eight years running. Many multinationals exploit loopholes in the tax code to make profits earned in America appear on the books of shell companies in the Cayman Islands and other tax havens. Some companies renounce their American citizenship to become a “foreign” company for tax purposes, while continuing to benefit from our infrastructure, education system and security.
Tax dodging is not a victimless offense. The failure to close these tax loopholes means we are forced to borrow more from foreign creditors, like China and Saudi Arabia, or make hard-working families and small businesses make up the difference.
How to close the offshore loopholes —I propose to shut the door on multinational corporate loopholes, leveling the playing field for small businesses. I recently introduced two pieces of legislation that would close offshore loopholes encouraging companies to shift jobs and profits offshore, crack down on the type of illegal offshore tax evasion exposed by the “Panama Papers” one year ago this month, and require companies that desert our country to pay an exit tax. While wealthy American individuals who renounce their citizenship must already pay an exit tax, corporate deserters do not. Since the U.S. Supreme Court has held that corporations are people too, we should make them pay up when they seek to abandon America.
Tax reform, not more tax breaks for those who don’t need it — Tax reform should be fair and fiscally responsible. The tax plan released by Trump during the campaign misses the mark by a mile. It would add over $6 trillion to the deficit, the lion’s share of which would pad the bottom lines of the largest corporations and end up in the pocket of those at the top, according to nonpartisan estimates. As the top Democrat on the Tax Policy Subcommittee, I will put the public interest first and fight attempts to force working families to foot the bill for more tax breaks for those at the very top.