· Repealing all additional tax breaks for the top 1%, raising at least $177 billion.
It will also close the tax gap by at least $9.5 billion/year. A recent analysis by the IRS estimates that the federal government collects approximately $345 billion less than is owed to it annually. Most of this tax gap results from underreporting of income and failure to collect reported tax obligations. This amounts to a 16% noncompliance rate. In addition IRS enforcement apparatus is seriously under funded, which makes it hard to collect even known tax debts, not even taking into account tax cheats. The National Treasury Employees Union estimates that $31 in lost tax revenue can be collected for every additional dollar invested in the IRA enforcement and collections apparatus. Finally, the Progressive Caucus budget will increase federal revenue by at least $17.1 billion/year for the next year by cracking down on corporate welfare. It will close some of the copious tax loopholes and special interest tax breaks every year for the next decade. Examples include:
- Elimination of corporate tax incentives for off-shoring jobs. The tax code has a number of preferences that directly or indirectly encourage U.S. companies to relocate operations and jobs overseas;
- Revaluation of LIFO inventories of large, integrated oil companies. Under current law, these companies are generally permitted to use a last-in, first-out (LIFO) method to account for their inventories, provided they use the same accounting method for other reporting purposes. Consequently, when prices are rising (as with oil prices in recent months), the LIFO Method generally reduces the business’ income and its tax liability;
- Elimination of tax deferral for American-owned foreign corporations. “Deferral” of taxes on profits that American-owned corporations claim to earn offshore is really more like an exemption for income that is styled as “foreign.” The Joint Committee on Taxation projects the cost to be $6 billion/year; and
- Elimination of percentage depletion for property from which oil and gas are derived. Percentage depletion for oil and gas properties is a particularly glaring feature of our energy tax policy. Most businesses must write off the actual costs of the property over its useful life (until it wears out.) If oil companies had to do the same, they would write off the cost of oil fields until the oil was depleted. Instead, some oil companies get to simply deduct a flat percentage of gross
revenue. The percentage depletion deductions can actually exceed costs and can zero out all federal taxes for oil and gas companies. The Joint Tax Committee projects the cost to be $4.7 billion/year
[1] This figure includes the amounts requested for the wars in Iraq and Afghanistan. The historical comparison is adjusted for inflation. See Steven M. Kosiak, “Both DOD Base and War Budgets Receive Big Boosts, Total Funding at Highest Level Since The End of the World War II,” Center for Strategic and Budgetary Assessments, February 5, 2007, www.csbaonline.org.
[2] See “Seven in Ten Americans Favor Congressional Candidates Who Will Pursue a Major Change in Foreign Policy: US Public Wants Less Emphasis on Military force, More on Working Through United Nations,”
(Note: You can view every article as one long page if you sign up as an Advocate Member, or higher).
