Today, 84 groups promoting economic and social justice sent a letter to President Biden and Vice President Harris in support of their Build Back Better public investment and tax fairness agenda.
The groups, representing a diverse coalition of unions, faith, policy and advocacy organizations said in the letter: “Your tax and investment plans were the boldest of any major party presidential nominee in modern American history. They received widespread media coverage and, perhaps more significant, your boldly progressive tax plan was heavily attacked by your political opponents, who spent untold millions of dollars and claimed falsely that the middle-class would pay more. Yet, you won the most votes ever of any U.S presidential candidate, with a central promise of your campaign to make the rich and corporations pay their fair share of taxes. You have a clear mandate to pursue your agenda.”
The groups specifically endorsed rollbacks to the Trump tax cuts proposed by Biden during the 2020 presidential campaign, including:
- Returning the top marginal tax rate on the highest incomes to 39.6%, from 37% today.
- Lifting the corporate tax rate on domestic profits to 28% from the current 21%, thereby restoring half the cut made to the corporate rate by the TCJA.
- Addressing the perverse outsourcing incentives embedded in TCJA’s international tax provisions by imposing a true 21% minimum tax on offshore earnings that applies to all profits and on a country-by-country basis. (Though this reform would be an improvement, ideally domestic and offshore tax rates should be equal to discourage outsourcing and profit shifting.)
- Phasing out for business owners making over $400,000 the 20% pass-through income deduction—a break that mostly benefits the richest owners.
- Restoring the estate tax to its 2009 levels, which would still mean only the richest 0.59% of estates would pay the tax.
The groups also backed other tax reforms proposed by candidate Biden to better ensure the wealthy and corporations pay something closer to their fair share:
- For those making over $1 million a year, ending the current almost 50% tax discount on investment income from long-term capital gains and dividends, so that such income from wealth is taxed at the same rate as income from work. Crucially, your plan also closes the “stepped up basis” loophole so that decades of investment gains on inherited property no longer go untaxed when those assets pass onto heirs.
- Significantly investing in IRS enforcement of high-income taxpayers and corporations as a means of paying for ambitious investments in childcare and the rest of the care economy.
- Capping the value of itemized deductions at 28% for the wealthiest taxpayers, so they no longer get a bigger tax benefit than a middle-income taxpayer from the same dollar-amount deduction.
- Ensuring that large corporations pay at least a 15% minimum tax on the profits they report to shareholders.
- Imposing a “financial risk fee” on large Wall Street banks.
- Ending tax breaks for the real estate industry, the fossil fuel industry, and for pharmaceutical drug advertising.”
The groups further noted that: “There are many other sensible tax reform proposals that meet your criteria, which the Americans for Tax Fairness coalition submitted to your administration earlier this year. They include a 10-percentage point “Millionaires” surtax on all income above $2 million; ending the ability of wealthy business owners to avoid self-employment and investments taxes, which fund healthcare programs; a tiny financial transaction tax on stock and bond trades; and a wealth tax on ultra-millionaires.”