Unnecessary Austerity, Unnecessary Shutdown

For Immediate Release

Contact: 

Emily Schwartz Greco; emily@ips-dc.org; (202) 297-5412 (m)
Chuck Collins at 617-308-4433 or Chuckcollins7@mac.com
Scott Klinger at 443-602-0136 or Scottklinger@earthlink.net
 

Unnecessary Austerity, Unnecessary Shutdown

Reversing tax giveaways to the super-rich and the nation's largest corporations could raise $4 trillion within a decade and avert possible government closures, according to a new Institute for Policy Studies report.

WASHINGTON - "Unnecessary Austerity," a new Institute for Policy Studies report, explains how Congress could raise more than $4 trillion in revenue over the next decade by reversing years of tax giveaways to the richest Americans and largest corporations. 

The report examines massive shifts in the tax code since 1961, the year President Barack Obama was born. For example, if corporations and households amassing $1 million or more in income each year paid taxes at the same rates as they did in 1961, the Treasury would collect an additional $716 billion a year — $7 trillion over a decade.

"This potential shutdown is an unnecessary exercise," said report co-author Chuck Collins, who directs the Institute's Inequality and the Common Good project. "Congress has prioritized tax cuts for the wealthy and failed to crack down on corporate tax dodgers, fueling a budget crisis."

The report prescribes eight new potential revenue sources. Taken together, they would boost revenue by $4 trillion over the next decade. These include:

  • Closing overseas tax havens ($90-100 billion)
  • Adding new tax brackets for households with more than $1 million ($60-80 billion) in annual income
  • Instituting a modest financial transaction tax ($150 billion)
 
America's increasingly concentrated income and wealth, coupled with historically low effective tax rates on the richest households, are fueling the deficit, according to this new report.

For example, if U.S. corporations were taxed at the same effective rate that they paid in 1961, the additional tax revenue would total $485 billion.

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