When President Donald Trump travels to Springfield, Missouri, on Wednesday to stump for tax reform, he’ll rely on a well-worn argument that giving businesses a tax break will create more…
Advanced Search
Projects
Clear
Authors
Clear
When President Donald Trump travels to Springfield, Missouri, on Wednesday to stump for tax reform, he’ll rely on a well-worn argument that giving businesses a tax break will create more jobs.
But while the argument sounds compelling, there’s little evidence to back it up. And a new analysis from the Institute for Policy Studies, a left-leaning Washington think tank, throws more cold water on the idea.
Supporters of cutting corporate taxes argue that those savings would free up more capital for investment, allowing companies to expand operations and hire more workers.
A just-released report by the Institute for Policy Studies (IPS) — a DC think tank providing analysis on peace and economic, racial, and climate justice — provides evidence that tax cuts for corporations do not necessarily correlate with an increase in jobs. Additionally, increased CEO compensation does not routinely result in increased employment. These are important findings, because the number one rationale that politicians use to justify corporate tax cuts is that the increased business revenue will lead to decreased unemployment.
Tax-dodging corporations paid their CEOs more than other big firms
Job-cutting firms spent tax savings on buybacks, which inflated CEO pay
The August 30 report refutes the claim being made by Trump, who is now formally beginning his “tax reform” campaign, that reducing the corporate tax rate from 35 percent to 15 percent will result in increased and higher-paying jobs.
As President Donald Trump kicked off his aggressive, Koch brothers-backed tax “reform” push with a speech in Missouri on Wednesday, progressive advocacy groups and policy analysts argued that the president’s tax agenda is nothing more than a “scam” that would take money from low-income families and hand it to the rich.
Make no mistake, what Trump and Republican leaders in Congress are proposing is not tax reform,” Frank Clemente, executive director of Americans for Tax Fairness (AFT), said in a statement on Tuesday. “They simply want massive tax cuts for millionaires, billionaires, and big corporations, at the expense of everyone else. And those tax giveaways will be paid for by cuts to Social Security, healthcare, education, and other programs that maintain living standards for working families.”
Corporate tax cuts would be a major windfall for American corporations. For American workers, perhaps not so much.
President Donald Trump and Republican lawmakers will focus their efforts on crafting tax legislation when Congress heads back to work next week. They have promised a yet-to-be-detailed plan that will slash corporate tax rates among other measures in an effort to boost investment and create jobs, but it is unclear that will actually be the result.
A new study from the Institute for Policy Studies, a left-leaning think tank in Washington, D.C., analyzes data from the Institute on Taxation and Economic Policy to determine what companies that pay lower tax rates do with their extra earnings. Researchers looked at 92 publicly-held companies that reported a U.S. profit from 2008 to 2015 and paid a federal income tax of less than 20%, the rate proposed by House Republicans, by exploiting loopholes in the current tax code.
President Trump is slated to land in Missouri on Wednesday to give a much-awaited speech about his plans for tax reform, the next target on his legislative agenda. The reduction, he has argued, would encourage companies to stay and grow and hire in the United States. “There’s no reason for them to leave anymore because your taxes are going to be at the very, very low end,”
President Trump, after a summer of neglecting his top legislative priority, will make a full-throated pitch for tax reform today in Missouri. The still-fuzzy plan will have a lot of moving parts: lower top marginal rates, simplification of deductions, and elimination of the estate tax, which “only morons pay,” according to Trump’s economic adviser, Gary Cohn. But one centerpiece will be a significant reduction in the corporate tax rate, from the current 35 percent rate to as low as 20 percent.
This is necessary for three reasons, according to Republicans: “Jobs, jobs, jobs,” to quote House Speaker Paul Ryan this June. Though congressional Republicans and the White House rarely see eye-to-eye these days, they are united on the idea that cutting corporate taxes will spur an hiring boom that will reach down to the ordinary worker.
A new report from the Institute for Policy Studies shows this isn’t true. US companies are already paying minimal amounts in corporate taxes, and the ones most likely under Republican theory to pour tax savings into job creation have instead been more likely to cut their workforce over the past nine years. The data shows that low corporate tax rates more often lead to increases in CEO pay and boosts for shareholders.
A progressive think tank was joined by hundreds of supporters Thursday in a Twitter campaign demanding that corporations pay a fair tax rate.
A day after President Donald Trump touted his “scam” tax proposal, the Institute for Policy Studies’ #PayUpCorps campaign highlighted needs in infrastructure, healthcare, and other sectors that could be paid for with all the money corporations stand to save under the Koch brothers’-backed tax plan.
Trump and Republican leaders in Congress hope to cut the corporate tax rate from an already low 35 percent to 20 percent—though the Institute on Tax and Economic Policy has found that many Fortune 500 companies effectively already pay only about 20 percent of their profits in taxes, and contrary to Republican promises, the savings don’t lead to job creation.
Eleven years ago Jimmy Carter had the temerity to put the word “apartheid” in the subtitle of his book Palestine: Peace not Apartheid, and he paid the price. The former president was drubbed out of the Democratic Party, and Wolf Blitzer and Terry Gross questioned him harshly for the word choice on major media.
But the grass roots and human-rights community worked hard to counter that resistance: the US Campaign to End the Israeli Occupation (now renamed the US Campaign for Palestinian Rights) made a commitment ten years ago to use the word apartheid because it described the dual system of law they had witnessed. “Our goal is to delegitimize Israel’s right to commit apartheid,” Phyllis Bennis said then.
Today we see the word cropping up more and more in mainstream coverage of the legal arrangements inside Israel and Palestine.
In a speech in Missouri later today, President Trump will attempt to relaunch his administration’s tax-reform crusade. If you believe what he says, his plan will be the bestest, biggest, boldest tax reform ever devised in the whole history of man.
It will be beautiful; it will be huge, that I can tell you.
However, once you peer inside that nicely wrapped giftbox — when you peel off the gilt-edged rhetoric and the beautifully tied bow — what do you find inside?
Not over yet –> As Houston began to recover from Hurricane Harvey, the storm made landfall again on Wednesday, dumping as much as two feet of rain on smaller towns near the Texas-Louisiana border, including Orange, Port Arthur and Beaumont. Todd Frankel, Avi Selk and David A. Fahrenthold report for The Washington Post that the biggest storm ever recorded in the US has left at least 37 people dead and 35,000 in shelters.
