“Tax Day” rallies were staged at post offices across the nation demanding that Congress enact President Obama’s 2010 budget which includes tax reforms that would close loopholes that enable corporations to escape billions in taxes each year.
As one labor movement economist told the World, “Our grandparents taxed the rich. We should too.”
Nicole Tichon, Budget and Tax Reform Advocate of the U.S. Public Interest Research Group (US-PIRG), said, “On the day that taxpayers are paying their taxes, facing our yearly responsibility to report all our earnings, we are reminding lawmakers that a lot of corporations are hiding their earnings.”
US-PIRG, the American Federation of State County and Municipal Employees, the Association of Community Organizations for Reform Now (ACORN) and others in the coalition, she said, released a report charging that the U.S. Treasury loses $100 billion each year or $1 trillion each decade from U.S. corporations setting up P.O. boxes in the Cayman Islands and other offshore havens. “The cost of that loophole is made up by ordinary taxpayers like you and me,” Tichon told the World in a phone interview. “Obama’s budget would recoup this windfall by closing that loophole.”
Among the corporations identified in the report are AIG, the insurance giant that has received $170 billion in taxpayer bailouts, American Express, Bank of America, Comcast, Coca Cola, Dell, Exxon-Mobil, Pepsi, and Pfizer.
Tichon said grassroots interest – more accurately, anger – has increased in recent months. “I think the financial meltdown has caused people to pay a lot of attention to where their tax dollars go, especially in light of the financial bailouts for the banks that their tax dollars are paying for. People are certainly engaged.”
ACORN organizer, Brian Kettenring, told the World “We have dozens of rallies around the country in support of President Obama’s budget which closes corporate tax loopholes that cost the Treasury hundreds of billions of dollars.”
He said the tax reform measures in Obama’s budget prove it is a “progressive and responsible budget.”
He scorned the Republican’s “Tax Day Tea Parties” instigated by the ultra-right “Freedomworks” and promoted by Rupert Murdoch’s Fox TV to muster support for ex-President George W. Bush’s trillions in tax giveaways to the rich, today’s equivalent of the economic royalism despised by the patriots who staged the real “Boston Tea Party” of 1773. “We’re not very worried by these events,” Kettenring said. “They just prove how marginal and out of touch they are.”
The Institute for Policy Studies (IPS) released a report on Tax Day titled “Reversing the Great Tax Shift: Seven Steps to Finance Our Economic Recovery Fairly.”
In 1955, according to the report, the nation’s top 400 taxpayers reported an average $12.3 million in income and paid federal income tax at a 51.2 percent rate. Half a century later, in 2006, the richest 400 reported an average $263.3 million income and paid federal income taxes at a measly 17 percent rate. If these 400 super-wealthy taxpayers paid federal taxes at the 1955 rate, the report states, the U.S. Treasury would have collected $35.9 billion more in revenues. Apply the 1955 tax rates to all those earning over $2 million annually and the U.S. Treasury would have collected $202 billion more in 2006.
Sam Pizzigati, editor of the online economic journal, “Too Much,” and a fellow of IPS is a co-author of the report. “Real tax reform couldn’t be more urgent,” he told the World in an email. “To stage an effective economic recovery, we need to invest far more in our nation’s future than we are now. We can either borrow to pay for it…or tax the rich.
The report declares that since the year 2000, “Our federal government … has squandered hundreds of billions of borrowed dollars on tax cuts for the wealthy and militarized solutions to global problems. They have given massive bailouts for the Wall Street investment firms that created the current economic crisis.”
The report continues, “Without additional revenues, we as a nation will either have to shortchange long overdue investments in infrastructure, health, energy, and economic opportunity or leave an unsustainable debt to generations ahead.”
The report offers a list to begin reversing the tax burden that includes:
• Immediate reversal of tax breaks on households with annual income over $250,000 by raising the top income tax rate to 39.6 percent and increasing the capital gains tax to 20 percent, both proposed by President Obama.
• Tax financial transactions at the rate of a penny for every $4 in trading of stocks and bonds raising an estimated $100 billion annually in federal tax revenues.
• Eliminate tax preference for capital gains and dividends raising $80 billion annually in revenues.
• Levy a progressive estate tax on large fortunes raising $40-$60 billion per year.
• Create a top tax bracket of 50 percent for incomes of $2 million or higher. This would generate $60-$70 billion in tax revenues.
• End overseas tax havens raising $100 billion in annual revenues.
• Eliminate subsidies for excessive executive compensation generating $18 billion each year.
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