A coalition named Americans for Tax Fairness (ATF) has recently held events in sixteen states for the purpose of pressuring Congress to close corporate/business tax loopholes. It is their premise that removing the ambiguities in the corporate tax code will help to prevent impending budget cuts to vital services and benefits. The ATF, which has more than 325 state and national chapters, is organizing the events at this time in anticipation of the conflict on budget and tax issues which is expected to occur in Congress shortly after the Labor Day recess.
A report called The High Price of Tax Loopholes was released by the ATF on August 20th. This report discusses some existing business tax loopholes in the context of what cuts in government services and benefits could be avoided if each of the loopholes was closed. The following is a listing of some of the key business tax breaks identified in the report:
- Allowing US businesses to defer taxes on overseas income until the funds are brought back into the country.
- Providing subsidies to large oil and gas companies which are already highly profitable.
- Allowing tax cuts on large percentages of the income earned by hedge fund managers.
For each of the tax escapes identified above, the AFT report describes a reduction in some government service or benefit that could be avoided if Congress would act to limit that specific corporate tax break.
The data shows that during the two and a half years that Congress has been working to reduce the budget deficit, measures passed to increase revenue have totaled just over $600 million. Budget-cutting measures passed during this same time period have totaled three times this amount, approximately $1.8 trillion. In addition, the deficit reduction law which is scheduled to take effect on October 1st calls for another $109 billion in cuts. President Obama did address the subject of increasing revenue which could potentially eliminate further budget cuts down the road when he announced on July 30th that he would work with Republicans to remove existing business tax loopholes. He further said that he would use any revenue generated by these efforts to fund projects aimed at creating jobs.
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