Letter to Nancy Pelosi, Speaker of the House, Kevin McCarthy, House Minority Leader, Mitch McConnell, Senate Majority Leader, and Chuck Schumer, Senate Minority Leader - Over 100 Lawmakers: Put the Brakes on Corporate Tax Breaks in Future Relief Legislation

Letter

By: Rick Larsen, Joaquin Castro, Veronica Escobar, Suzanne Bonamici, Yvette Clarke, Ben Lujan, Jr., Rashida Tlaib, John Sarbanes, Joe Courtney, Katie Porter, Ruben Gallego, Gwen Moore, Tim Ryan, Joyce Beatty, Grace Meng, Debbie Wasserman Schultz, Ted Deutch, Anna Eshoo, Jerry McNerney, John Garamendi, Ann Kirkpatrick, Pramila Jayapal, Eddie Johnson, Mike Doyle, Jr., Marcia Fudge, Marcy Kaptur, Carolyn Maloney, Deb Haaland, Dan Kildee, Anthony Brown, Stephen Lynch, Katherine Clark, Danny Davis, Cindy Axne, Alcee Hastings, Sr., Diana DeGette, Jimmy Gomez, Grace Napolitano, Jared Huffman, Peter Welch, David Cicilline, Dwight Evans, Brendan Boyle, José Serrano, Andy Levin, Jamie Raskin, Joe Kennedy III, John Yarmuth, André Carson, Hank Johnson, Jr., Judy Chu, Chris Murphy, Alexandria Ocasio-Cortez, Nydia Velázquez, Bobby Rush, Jahana Hayes, Mark Takano, Julia Brownley, Ro Khanna, Patrick Leahy, Tim Kaine, Martin Heinrich, Amy Klobuchar, Dick Durbin, Mary Scanlon, Bonnie Watson Coleman, Ilhan Omar, Brenda Lawrence, Jim McGovern, Darren Soto, Jack Reed, Bob Casey, Jr., Tina Smith, Tammy Duckworth, Brian Schatz, Adriano Espaillat, Jerry Nadler, Bennie Thompson, Alan Lowenthal, Bernie Sanders, Tom Udall, Mazie Hirono, Richard Blumenthal, Kamala Harris, Mark Pocan, Paul Tonko, Barbara Lee, Raul Grijalva, Tammy Baldwin, Sheldon Whitehouse, Jeff Merkley, Sherrod Brown, Cory Booker, Chris Van Hollen, Jr., Elizabeth Warren, Steve Cohen, Peter DeFazio, Chellie Pingree, Ed Markey, Jan Schakowsky, Chuy Garcia, Eleanor Norton, Rosa DeLauro, Lloyd Doggett II
Date: July 2, 2020
Location: Washington, DC

Dear Speaker Pelosi, Leader McCarthy, Leader McConnell, and Leader Schumer:

Thank you for your leadership as we work together to deliver more assistance to struggling families across the country. In addition to presenting immediate hardships, the COVID-19 pandemic has laid bare and magnified the economic inequality that existed long before the crisis. As we consider additional relief, we urge you to reject corporate tax breaks that would widen the income gap and reward wealthy shareholders instead of workers.

The Congressional Budget Office (CBO) found recently that aid to state and local governments and increased Medicare spending are far more effective at stimulating the economy than more business tax breaks. Mark Zandi, the chief economist for Moody's Analytics similarly found that such tax breaks cost many times more than the economic activity they generate.

While small businesses and laid-off workers are struggling, the stock market is soaring, ensuring that large corporations continue to have access to capital. Those that require additional liquidity can seek assistance from the $500 billion Federal Reserve fund, which remains largely untouched. In addition, the 2017 Trump tax law already provided an enormous corporate windfall, and additional changes to tax policy have accrued favorably to corporate tax liability. While low-income workers anxiously awaited $1,200 stimulus checks, one of the tax breaks included in the CARES Act delivered an average of $1.6 million to just 43,000 taxpayers earning more than a million dollars in annual income.

Despite such generous handouts, large corporations are seeking a second helping. While Republicans continue to stand in the way of expanding refundable tax credits for working families like the Earned Income Tax Credit and Child Tax Credit, they stand ready to award refundable tax credits to large corporations. Part of why large businesses seek refundability or what they call monetizing their tax credits is because so many corporations have little or no tax liability following the historic deficit-financed giveaways they received under the Trump tax law.

In addition to pushing corporate handouts in the form of tax credits, President Trump's economic advisor Larry Kudlow proposed slashing the already record-low corporate tax rate in half for companies that bring jobs home. Unfortunately, the Trump tax law already allows companies to pay half the U.S. rate on offshore investments and in some cases even zero. No tax break, however well targeted can beat the zero rate current loopholes already allow. Multinationals with armies of tax lawyers would be able to game such provisions to reap further windfalls.

We urge you to oppose such corporate tax breaks, which have little to do with pandemic relief and much to do with temporarily boosting the stock market and benefiting the wealthiest among us. Whether in the form of tax breaks, loans, or other federal support, any assistance to corporations must at the very least come with adequate guardrails to ensure workers benefit instead of executives and shareholders. However, our focus must be on advancing more efficient relief measures that put assistance directly into the hands of the families that need it most.


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