Warren Buffet famously asked why a billionaire like himself should have a lower tax rate than his or her secretary. Such is the reality of the U.S. tax code Republicans are trying to protect. In most states, low-and middle-income people pay a higher portion of their income in taxes than the wealthy. It’s a tax code riddled with loopholes and exemptions for corporations that, unlike average Americans, can afford to hire an army of lobbyists on Capitol Hill to write their own rules.
Americans overwhelmingly agree it’s time for the 1% and big corporations to pay their fair share in taxes, especially as income inequality in the U.S. is the highest it’s been since 1928. While big corporations continue to post record profits, workers’ wages have been stagnant. In fact, over the last thirty years, wages grew just over 8% even though productivity grew by 65%.
But the Republican party, led by a billionaire who refuses to release his own tax returns for fear of what they may reveal, continues to push tax cuts for the rich, including hedge fund managers, all while adding trillions to the national debt.
Workers have had little to show for the success they helped build for their CEOs over the years, but they still paid their due in taxes. But incredibly, some of the biggest corporations — like Boeing, General Electric and Verizon — didn’t pay a dime in federal taxes in some recent years.
The Office of Management and Budget has identified seven tax breaks for oil companies that cost the government more than $4 billion per year (almost as much as the entire budget for cancer research at the National Institutes of Health).
Most of these tax preferences are exclusive to the oil industry and represent a conservative picture of the oil industry’s century-long subsidization. Meanwhile, oil companies pulled in $90 billion in 2014—even with lower oil prices. According to the Citizens for Tax Justice, several oil companies paid literally no taxes or negative taxes in at least one of the years between 2008 and 2012, including Murphy Oil, Exxon Mobil, Occidental Petroleum, Devon Energy and HollyFrontier. Exxon Mobil actually got money out of the government – raking in more than $25 billion in one of those years while actually getting $954 million out of the taxpayers for a tax rate of negative 38 percent. That money could be far better spent rebuilding America’s outdated schools and crumbling roads and bridges.
Multinational corporations have parked at least $2 trillion in profits offshore, mostly in tax havens like the Cayman Islands. And guess who has to pick up the tab for all that lost revenue? Average U.S. taxpayers, to the tune of about $100 billion every year.
In fact, the average American taxpayer in 2013 had to shoulder an extra $1,200 in state and federal taxes to make up for the revenue lost due to the use of offshore tax havens by corporations and wealthy individuals.
There is no better reason why we need Congress to reform the tax code so everyone plays by the same rules. Unfortunately, House Republicans think millionaires and corporations should be let further off the hook and have even less tax responsibility. The most recent Republican budget the House passed slashes the top individual tax rate and the corporate income tax rate to 25 percent – which would blow a $5 trillion hole in the deficit. We’ve seen this movie before: it was called the Bush tax cuts. And it ended with the worst jobs record in U.S. history and more income inequality than ever. A better bargain for the middle class is an economy that grows from the middle out, not the top down.
Questions to Ask
- Do you think it’s fair that average taxpayers have to pay over $1,200 more to make up for corporations and wealthy individuals hiding their profits offshore?
- Given your vote for the Republican budget plan, how do you specifically intend to make up for the $5 trillion in lost revenue that would come from slashing the corporate and upper income tax rates?
- Can you name a single tax loophole that you would close?
- Would you vote to repeal the $4 billion in taxpayer subsidies Big Oil gets every year despite making massive profits?