Restore
Fairness, Sanity to Federal Taxes And Spending
By Tony Flora
By Tony Flora
Talk about kicking someone when shes down: a woman who lost her job when the AJ Wright distribution center in South Bend shut down was recently told her unemployment benefits will be trimmed by over 10 percent, thanks to the mindless federal budget cut known as the "sequester."
This indiscriminate, across-the-board reduction in federal spending has denied cancer treatment to seniors, snarled air travel, imperiled education for the poor and disabled, and is projected to cost our country 750,000 jobs this year.
And
now it is even taking money out of the pockets of the cash-strapped unemployed.
This is not a sane or humane way to grow our economy and bring our federal
finances under control.
As president of the North Central Indiana labor council, I represent thousands of working Hoosiers. And whether currently employed or temporarily unemployed, they should not be the ones bearing the brunt of deficit reduction. They've struggled too hard for too long through a national recession punctuated here in North Central Indiana not only by the Wright closure -- which cost 600 jobs -- but the shuttering of the Bosch and Cequent plants, which cost hundreds more.
Instead,
we should reverse the sequester cuts and bring down our debt by closing
corporate tax loopholes and ending special tax preferences that only the
wealthy enjoy.
You
don't have to look far for examples of corporate tax dodging: multinational
corporations headquartered right here in Indiana work the system to avoid
paying their fair share. According to Citizens for Tax Justice, Eli Lilly of
Indianapolis made $5 billion in profits from 2008 to 2010 and paid just a 4
percent tax rate. In one year, instead of paying any federal income taxes, it
got a refund check back from Uncle Sam even bigger than its bottom line.
The same group determined Cummins Engine of Columbus has stashed over $2 billion in profits overseas -- $800 million in the last year alone -- putting all that cash outside the reach of U.S. taxation.
The same group determined Cummins Engine of Columbus has stashed over $2 billion in profits overseas -- $800 million in the last year alone -- putting all that cash outside the reach of U.S. taxation.
Nationwide,
corporate tax avoidance costs us $90 billion a year, according to a recent
report by the Institute for Policy Studies. If we collected that lost revenue,
we could completely cancel the sequester cuts for 2013 and still have money
left over to invest in the economy and pay down public debt.
The nonpartisan Congressional Budget Office has determined that corporations paid only one-third of the official income tax rate last year, and according to another government report, corporate taxes as a share of federal revenue is at a 60-year low.
The nonpartisan Congressional Budget Office has determined that corporations paid only one-third of the official income tax rate last year, and according to another government report, corporate taxes as a share of federal revenue is at a 60-year low.
Meanwhile,
top Lilly and Cummins executives -- along with the rest of the wealthiest 2
percent of taxpayers -- have access to deductions on their personal income
taxes unavailable to the middle class. Let's say you're an Indianapolis banker
with a million-dollar mansion in the Meridian-Kessler neighborhood. Youd be
able to deduct almost 40 cents of every dollar you pay in mortgage interest.
But a middle-class letter carrier with a home in South Bend or a plumber in Goshen can only write off 28 cents or less depending on their income. That's not only unfair, but expensive: the joint tax committee of Congress says we can recoup over the next decade $500 billion in savings on this giveaway to the wealthy if we cap tax breaks at the middle-class rate.
But a middle-class letter carrier with a home in South Bend or a plumber in Goshen can only write off 28 cents or less depending on their income. That's not only unfair, but expensive: the joint tax committee of Congress says we can recoup over the next decade $500 billion in savings on this giveaway to the wealthy if we cap tax breaks at the middle-class rate.
Amazingly,
some politicians in Washington, rather than trying to end such abuses, want to
make them worse. According to the nonpartisan Tax Policy Center, the budget
passed earlier this year by the House of Representatives would cut taxes on
households making over a million dollars a year by an average of more than
$400,000.
How
does the budget propose we fund this bonanza for the wealthy? With $800 billion
in additional cuts (on top of the sequester) over the next decade to programs
on which the middle class and poor depend, ranging from education to
nutritional assistance.
This backwards approach to budgeting -- taking from those with little to spare in order to give to those who already have more than enough -- is why the U.S. Conference of Catholic Bishops announced that it was "profoundly concerned" by the House tax-and-spending plan.
This backwards approach to budgeting -- taking from those with little to spare in order to give to those who already have more than enough -- is why the U.S. Conference of Catholic Bishops announced that it was "profoundly concerned" by the House tax-and-spending plan.
We
can do better. We can do right by our federal finances, our national economy --
and our unemployed brothers and sisters here in North Central Indiana and
across the country. All it takes is a balanced, sensible approach to federal
budgeting that includes smart investments to grow our economy and create jobs,
strengthens critical benefits and services like Social Security and Medicare,
and pursues responsible deficit reduction once our economy recovers.
To
do all of that requires more from those with the most to give: big corporations
and wealthy Americans who are not paying their fair share of taxes.
Flora is president of the North Central Indiana
AFL-CIO Council.