January, 16 2024, 11:49am EDT
ITEP Statement on Federal Tax Deal on Child Tax Credit, Business Tax Breaks
See below for a statement from ITEP Federal Policy Director Steve Wamhoff on the tax deal announced this morning by Sen. Ron Wyden and Rep. Jason Smith.
STATEMENT of STEVE WAMHOFF, ITEP FEDERAL POLICY DIRECTOR:
Child poverty is a problem. Corporations paying too much in taxes is not. Unfortunately, many members of Congress have refused to direct resources to help children in poverty unless an equal amount of resources is simultaneously directed towards corporate tax cuts.
The result is the tax package just announced by Congressional leaders that would devote an equal amount of resources towards improving the Child Tax Credit (CTC), mainly for low-income families, and towards expanding the Trump tax cuts for corporations.
The fact that this legislation is a compromise does not mean that it is not worth enacting. The current CTC rules are poorly designed in that they limit the credit for those families who most need it because their earnings are low. The bill would loosen, although not eliminate, those limits, particularly for very low-income families with more than one child.
This falls far short of the reforms that Congress enacted for 2021, which dramatically reduced child poverty in America by removing the limits on the refundable portion of the credit entirely, meaning that the poorest children all benefited from it.
The tradeoffs for this boost to child and family wellbeing are high. The corporate tax breaks in this bill would provide huge benefits to corporations that seem scarcely in need of more favors from the government by undoing several cost-containing provisions that were included in the Trump tax law.
One would reinstate a tax break that supposedly subsidizes “research,” but the companies claiming it range from a brewery and a company that develops frozen and packaged foods to a sausage business and a company that develops electronic games for casinos, so it’s unclear what public value this so-called “research” has.
Another is “bonus depreciation,” which supposedly encourages investment but really rewards companies for doing what they would do even in the absence of any tax break. The main accomplishment of this provision is to allow many corporations to pay little or nothing in corporate taxes.
Yet another would allow a looser limit on the deductions that large companies take for interest payments they make on their debts. As arcane as this sounds, it ultimately will benefit the private equity industry and its practice of acquiring corporations and loading them up with debt, a technique that has led to the collapse of collapse of Toys “R” Us, Payless and other well-established companies.
As unwise as these corporate tax breaks are, there was a time when Congress might have enacted them without much consideration and without attaching provisions that also help low-income families. The hesitation of many lawmakers to provide any more corporate tax breaks and the desire of many to fully reinstate the 2021 expansion of the Child Tax Credit is a testament to the growing recognition that our tax code should work for everyone, not just the most powerful interests in Washington.
Founded in 1980, the Institute on Taxation and Economic Policy (ITEP) is a non-profit, non-partisan research organization, based in Washington, DC, that focuses on federal and state tax policy. ITEP's mission is to inform policymakers and the public of the effects of current and proposed tax policies on tax fairness, government budgets, and sound economic policy. ITEP's full body of research is available at www.itepnet.org.
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A new analysis explores the possible payout if fossil fuel companies—who have already shown a willingness to put a price tag on the value of planet Earth—agree to the presumptive Republican nominee's election year "quid pro quo" deal.
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A new analysis reveals that the alleged $1 billion election year "quid pro quo" offer that presumptive Republican nominee Donald Trump made to executives of major oil company's could, if they agreed to the deal, bank them a handsome profit.
According to the study by Friends of the Earth Action, first reported by The Guardian on Thursday, the "remarkably blunt and transactional" offer from Trump—in which $1 billion in campaign funding put together by the nation's major oil companies would be repaid upon his election with massive deregulation of the oil and gas sector as well as tax relief for the industry—would yield a major windfall for those same corporations, including an estimated $110 billion from the tax breaks alone.
As The Guardian reports:
Biden wants to eliminate the tax breaks, which include long-standing incentives to help drill for oil and gas, with a recent White House budget proposal targeting $35bn in domestic subsidies and $75bn in overseas fossil fuel income.
"Big oil executivess are sweating in their seats at the thought of losing $110bn in special tax loopholes under Biden in 2025," said Lukas Ross, a campaigner at Friends of the Earth Action, which conducted the analysis.
Ross said the tax breaks are worth nearly 11,000% more than the amount Trump allegedly asked the executives for in donations. "If Trump promises to protect polluter handouts during tax negotiations, then his $1bn shakedown is a cheap insurance policy for the industry" he said.
Republicans in Congress last year confirmed that if Trump wins back the White House and the GOP resume control of both chambers, they will move aggressively to make the Republican's 2017 tax cuts, which largely benefited the wealthy and corporations, permanent. As some of the most profitable companies in the U.S., oil and gas companies stand to benefit greatly from that outcome.
In Florida last month, not long before his meeting with oil executives, Trump told a different crowd of "rich as hell" supporters gathered at Mar-a-Lago: "We're gonna give you tax cuts, we're gonna pay of our debt." The problem with the second half of that claim is presented in a recent CBO report which found that another wave of tax cuts like those passed by the GOP in 2017 would skyrocket the national debt by an estimated $4.6 trillion over the next ten years.
Earlier this week, House Democrats, led by Oversight Committee Ranking Member Rep. Jamie Raskin (D-Md.), launched a probe into the "quid pro quo" allegations between Trump and Big Oil, including letters to company executives believed to have been in attendance.
The blatant nature of Trump's corrupt intent, according to some political observers, is an opportunity that Democrats and champions of climate action and other progressive causes should not miss.
Writing about the circumstances in The New Yorker on Wednesday, journalist and veteran climate activist Bill McKibben argued that the stakes of this election are made plain in what Trump has offered the fossil fuel industry in exchange for its financial backing.
"Trump's reported billion-dollar offer to fossil-fuel executives shows that this is the key year to save the planet," McKibben writes.
"Given four years to finish the implementation of the Inflation Reduction Act, a second-term Biden Administration might finally be able to break the hold of fossil fuel’s political influence," his essay explains. "Another term of Trump, however—and with all that it means for undercutting global efforts at climate regulation, as well—offers an entirely plausible and entirely opposite outcome: climate chaos combined with continued fossil-fuel dependence."
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As Federal Trade Commission Chair Lina Khan appeared before a U.S. House of Representatives subcommittee on Wednesday, Congressman Mark Pocan highlighted recent FTC action against fossil fuel industry price fixing and urged criminal consequences.
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The FTC earlier this month barred Sheffield from serving on the board of directors of or as an adviser to ExxonMobil, which just acquired Pioneer, due to his alleged collusion with the representatives of the Organization of Petroleum Exporting Countries (OPEC) and OPEC+.
While welcoming the FTC's move, Pocan noted that "if you commit theft, the average sentence... in the United States is 23 months" and the multibillion-dollar profit that fossil fuel giants make from price gouging "is more than grand larceny theft."
🚨BIG: @RepMarkPocan applauds @FTC for revealing an oil price-fixing scheme that cost Americans billions from 2021-2023.
"I just did a little napkin math ... That's $175 million a year—just for people in my district—that we're being gouged." pic.twitter.com/maM8Uk6usY
— American Economic Liberties Project (@econliberties) May 15, 2024
"What else can we do to these oil companies that are ripping us off?" the congressman asked Khan, an appointee of President Joe Biden with "a pro-working families record."
The FTC chair responded that "price fixing and output reduction in a coordinated way can be criminal violations of the antitrust laws. As enforcers we can't specifically speak to what we're referring and what we're not, but as a general matter, it's been a priority of mine to make sure we are referring more criminal candidates to the Justice Department, because we need to make sure companies and executives aren't just treating fines as a cost of doing business and that they take seriously the rule of law."
Referencing a television show that takes place in federal prison, Pocan told her that "I would recommend 'Orange Is the New Black,' if we need to, to make a point. It would be helpful because we're feeling it at the pumps and clearly this kind of behavior, we know, isn't isolated."
Sharing a video of his remarks on social media, Pocan declared: "Unacceptable! A slap on the wrist isn't enough. I think jail time should seriously be considered."
As the American Economic Liberties Project (AELP) pointed out, Pocan wasn't the only lawmaker to reference the recent price fixing revelations during the Wednesday hearing; he was joined by Reps. Matt Cartwright (D-Pa.) and Rosa DeLauro (D-Conn.).
"Finally it's being noticed!" said AELP's Matt Stoller, who has written about the alleged collusion. "Dem House members get it!"
Stoller wasn't alone in welcoming the discussion in Congress—after days of limited attention on the issue among national figures.
"This illegal oil corporation price fixing conspiracy cost Americans as much as $2,100. Per year," saidMore Perfect Union, sharing a video of Pocan and citingThe American Prospect.
The Ohio AFL-CIO stressed: "Greedflation is not inflation. Pass it on."
Noting that Sheffield is getting a $68 million "golden parachute on his way out," former U.S. Labor Secretary Robert Reich argued Wednesday: "That money (and more) should be refunded to the American people. Not sent to his bank account."
Groundwork Collaborative executive director Lindsay Owens similarly said last week that "the Department of Justice should criminally prosecute Scott Sheffield and Congress should tax back the industry's windfall profits and issue every American a refund."
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Lily Greenberg Call, a special assistant to the chief of staff in the Department of the Interior, became the first Jewish political appointee to resign her post in protest of U.S. President Joe Biden's support for Israel's genocide in Gaza.
Call announced her resignation on Wednesday, which is also the 76th anniversary of the Nakba—or the expulsion of the majority of Palestinians from their homes in 1948 as part of the process of creating the current state of Israel.
"Nakba and Shoah, the Hebrew word for Holocaust, mean the same thing: catastrophe," Call wrote in her letter. "I reject the premise that one people's salvation must come at another's destruction. I am committed to creating a world where this does not happen—and this cannot be done from within the Biden administration."
"What Israel is doing to people in Gaza and to Palestinians across the land is incredibly un-Jewish to me and such a disgrace to our ancestors."
In her letter, addressed to Interior Secretary Deb Haaland, Call said that she had worked for both Vice President Kamala Harris' presidential campaign in 2019 and Biden's in 2020 and was "thrilled" to accept a position at DOI.
"I joined the Biden administration because I believe in fighting for a better America, for a future where Americans can thrive: one with economic prosperity, a healthy planet, and equal rights for all people," she wrote.
However, that changed with Biden's financial, military, and political backing of Israel's war on Gaza.
"I can no longer in good conscience continue to represent this administration amid President Biden's disastrous, continued support for Israel's genocide in Gaza," she wrote.
Call spoke of her Jewish immigrant heritage and how her family story—moving from grandparents without college degrees to a granddaughter with a presidential appointment—represented the American dream.
"And yet, I have asked myself many times over the last eight months: What is the point of having power if you will not use it to stop crimes against humanity?" she wrote.
"President Biden has the blood of innocent people on his hands."
Call also spoke of how her Jewish faith and lifelong experience in the Jewish community informed her decision.
"What I have learned from my Jewish tradition is that every life is precious. That we are obligated to stand up for those facing violence and oppression, and to question authority in the face of injustice," she said.
In a separate interview with The Associated Press, she criticized Biden for "making Jews the face of the American war machine," adding that this was "deeply wrong."
For example, the AP wrote:
Call pointed to comments by Biden, including at a White House Hanukkah event where he said, "Were there no Israel, there wouldn't be a Jew in the world who was safe" and at an event at Washington's Holocaust Memorial last week in which he said the October 7 Hamas-led attacks that triggered the war were driven by an "ancient desire to wipe out the Jewish people."
Call's own views on Israel have altered dramatically in the last few years. As The Washington Post reported:
Greenberg Call, who graduated from the University of California at Berkeley in 2019, was president of Bears for Israel, an affiliate group of the American Israel Public Affairs Committee (AIPAC), and said she grew up going to student events hosted by the group. In a piece for Teen Vogue two years ago, she said she began to question AIPAC and its mission of ensuring unconditional American support for Israel as she got to know more Palestinians and after AIPAC endorsed Republican candidates who supported Donald Trump's false claims that the 2020 election was stolen.
Call told the Post that it had been a struggle to make the decision she did because of her deep roots in the Jewish community, but that Jewish values were ultimately what led her to go through with it.
"What Israel is doing to people in Gaza and to Palestinians across the land is incredibly un-Jewish to me and such a disgrace to our ancestors," she said.
Call wrote in the letter that while she knew people who lost family in Hamas' October 7 attack on Israel that killed around 1,100 people and was "terrified" by rising antisemitism, she was "certain that the answer to this is not to collectively punish millions of innocent Palestinians through displacement, famine, and ethnic cleansing."
Call outlined the horrors of Israel's war on Gaza: more than 35,000 people and 15,000 children killed, attacks on hospitals, mass graves, the destruction of every university in Gaza, and the targeting of journalists.
"These are all violations of international law, none of which would be possible without American weapons, and none of which have been condemned by President Biden," she wrote.
She continued:
The president has the power to call for a lasting cease-fire, to stop sending weapons to Israel, and to condition aid. The United States has used nearly no leverage throughout the last eight months to hold Israel accountable. Quite the opposite, we have enabled and legitimized Israel's actions with vetoes of United Nations resolutions designed to hold Israel accountable. President Biden has the blood of innocent people on his hands.
Call's resignation comes one day after Biden announced another $1 billion weapons shipment to Israel, even as it continues an assault on Gaza's southernmost city of Rafah. Biden had previously called a ground offensive on Rafah a "red line" that Israel should not cross, yet critics point out that Israel's current operations in Rafah should certainly qualify.
"There's been many moments in the last eight months that I have thought about it," Call toldMiddle East Eye of her decision to resign, "and I think everything that has happened in the last few weeks in particular, made me feel like the time is right."
Her letter also comes days after polling indicated that around 13% of 2020 Biden voters in six key swing states would not vote for him in 2024 because of his Gaza policy.
"I think the president has to know that there are people in his administration who think this is disastrous," Call told AP. "Not just for Palestinians, for Israelis, for Jews, for Americans, for his election prospects."
Call is at least the fifth Biden official to resign over his Gaza policy and the second political appointee, according to AP. While she is the first known Jewish Biden staffer to resign, Army Maj. Harrison Mann also cited his Jewish background when announcing his resignation decision on Monday.
"As the descendant of European Jews, I was raised in a particularly unforgiving moral environment when it came to the topic of bearing responsibility for ethnic cleansing—my grandfather refused to ever purchase products manufactured in Germany—where the paramount importance of 'never again' and the inadequacy of 'just following orders' were oft repeated," he wrote.
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