Sen. Warren: “That’s what this tax battle is really about: Who does the country work for?”
Washington, D.C. – Americans for Tax Fairness applauds Senator Elizabeth Warren’s leadership in working for corporate tax reform that benefits middle-class families and small businesses, not just wealthy multinational corporations. In a speech today at the National Press Club, Sen. Warren debunked the conventional wisdom that U.S. corporations are paying too much in federal income taxes, laid out her guiding principles for reforming the tax code, and also directly refuted three of the industry-supported corporate tax reform proposals.
“Senator Warren cut through the lobbyists’ spin to explain the real problems with our country’s corporate tax code. She showed leadership today that few elected officials have been bold enough to exhibit,” said Americans for Tax Fairness Executive Director Frank Clemente. “Senator Warren stood up to the big-moneyed corporate special interests, challenged their misleading ‘story about high U.S. taxes,’ and proposed guiding principles for tax reform that would best serve the interests of all Americans.”
In her speech today, Senator Warren clearly framed the issue: “It’s not that taxes are far too high for giant corporations, as the lobbyists claim. No, the problem is that the revenue generated from corporate taxes is far too low.”
“The average American household pays a federal tax rate of 17.6 percent. The average tax rate for an American corporation with fewer than 500 employees is 17.5 percent. Shoot, even Mitt Romney paid 14 percent. But the biggest American companies are paying far, far less–in many cases, nothing at all. They enjoy all the benefits of being an American company–but they leave it to families and small businesses to pick up the bill,” Senator Warren explained.
Senator Warren’s guiding principles for corporate tax reform are that it:
Must substantially increase the share of long-term revenues paid by big corporations.
Must level the playing field between small business and big business.
Should promote investment in jobs here in the U.S.
“Americans for Tax Fairness supports Senator Warren’s guiding principles for corporate tax reform and we are proud to say that they neatly align with our own organizing principles,” Clemente said.
Additionally, Senator Warren strongly criticized three core reforms to the international tax system outlined in a framework proposed by Senators Chuck Schumer and Rob Portman, calling them “genuinely terrible ideas”:
Deemed repatriation. “Deemed repatriation says bring home the money, but pay only half of what you owe on it. … Think about what this means. All the small business owners who have been paying their taxes in full can keep right on paying in full. But the tax dodgers get a special deal.”
Taxing overseas income at a lower rate than U.S. income. “It’s like holding up a giant sign that says, ‘Higher taxes if you invest in the U.S., lower taxes if you invest abroad.’ The result would be that every small business and family in America would be subsidizing foreign investments of multinational corporations.”
Establishing an “innovation box.” “For big pharmaceutical companies and giant tech companies, a provision like this just makes paying taxes–or a chunk of taxes–optional.”
These concerns with the Schumer-Portman framework are widely shared. In September, 24 widely-respected international tax experts sent a letter to members of Congress expressing their opposition to key elements of the Schumer-Portman framework.
Americans for Tax Fairness produced a booklet of 16 charts and data tables that used publicly available data to disprove some of the claims made in support of Schumer-Portman. In July, a group of 56 national organizations sent a letter to U.S. Senators explaining their objections to Schumer-Portman.
###
Americans for Tax Fairness is a diverse coalition of 425 national and state endorsing organizations that collectively represent tens of millions of members. The organization was formed on the belief that the country needs comprehensive, progressive tax reform that results in greater revenue to meet our growing needs. ATF is playing a central role in Washington and in the states on federal tax-reform issues.