Recent CRS Report Finds ‘Discouraging Findings’ About Tax Law’s Impact
Seven organizations, including Americans for Tax Fairness, AFL-CIO, Communications Workers of America and Economic Policy Institute, have written to the chairmen and ranking members of the House and Senate tax writing committees urging them to investigate the 2017 Tax Cuts and Jobs Act in light of new data and analyses showing the $1.9 trillion tax cut law has failed to spur the economy as its proponents promised.
Specifically, the groups list several issues that require greater scrutiny:
- The much greater loss of corporate tax revenue than had been predicted by official scorekeepers.
- The ability of at least 60 highly profitable Fortune 500 corporations to avoid all federal income taxes last year.
- The failure of the corporate tax cuts to result in the $4,000 pay raise for each working family that the Trump administration had promised would occur.
- The absence of the corporate investment boom that was similarly promised by the law’s backers.
- The major layoffs and outsourcing plans announced by many corporations in the wake of their tax cuts, which were supposed to create jobs.
The groups also highlight the tax breaks, job cuts and outsourcing by three major corporations—AT&T, General Motors and Wells Fargo—under the TJCA to illustrate problems with the law.
The groups cite recent “discouraging findings” by the non-partisan Congressional Research Service about the law’s impact on workers and investment that disprove many of the sunny predictions made by supporters of the law prior to its enactment.
“Why have workers generally not participated in the windfall of the corporate tax cuts through higher wages and better benefits,” the letter asks. “Why has the predicted big jump in corporate capital expenditures not occurred? What role has the huge increase in corporate stock buybacks played in increasing inequality and diverting money from investments in workers, plants, and equipment?”
The full list of groups signing the letter to the chairmen and ranking members of the Senate Finance Committee and the House Ways & Means Committee include Americans for Tax Fairness, AFL-CIO, Americans for Financial Reform, Communications Workers of America, Economic Policy Institute, Institute on Taxation and Economic Policy and United Auto Workers.
Their letter concludes, “Your committee is the fulcrum of U.S. tax policy. Further exercising your investigatory powers to better reveal the true impact of the TCJA on Corporate America, the American economy and working families would help Congress craft much-needed repairs to this deeply flawed law. “