As Congress gets ready for “Round 2” of the Fiscal Showdown—yet another manufactured budget crisis that will unfold during the month of March and over the course of this year—Republicans are resisting proposals to make this crisis go away once and for all by closing tax loopholes for Wall Street and the richest 2% of Americans.
Democratic Sen. Carl Levin (D-Mich.) is set to offer legislation that would start Wall Street down the path of paying its fair share and make this crisis go away.
According to Bloomberg News, Levin will offer legislation, called the “Cut Unjustified Tax Loopholes Act,” which would close some gaping tax loopholes that benefit Wall Street and raise about $200 billion over a decade.
The Levin bill would close one particular tax loophole that President Obama also criticized this week: The loophole that allows Wall Street hedge fund managers pay a lower tax rate on their income than working people pay on theirs. Closing this loophole—called the “carried interest” loophole—would raise $21.4 billion.
Another provision of the Levin bill would close the tax loophole that allows Wall Street derivatives traders to pay a lower rate on their income than working people pay on theirs, raising another $3 billion.
Levin’s bill would also close corporate tax loopholes because, as Sen. Levin says in a memo, “U.S. multinational corporations can use a myriad of tax loopholes to keep their taxes far lower than their domestic competitors.” In fact, 30 of the largest U.S. multinational corporations, with combined profits of $160 billion, paid no corporate income tax at all from 2008 to 2010.
Find out more about Levin’s proposal from Bloomberg News.
Republicans in Congress are threatening to shut down the government in March so they can get their way and enact the same economic agenda voters overwhelmingly rejected in the last election. The Republican ransom demands are the same as always: cuts to Social Security, Medicare and Medicaid benefits; tax cuts for the wealthy and Wall Street; and budget austerity for the rest of us, which is already causing the economy to sputter.
Even before the government shutdown that Republicans are threatening for the end of March, automatic, across–the-board budget cuts are scheduled to kick in on March 1. These cuts—called “sequestration”—are the result of an earlier episode of Republican hostage-taking in the summer of 2011, when Republicans in Congress threatened to cause a U.S. government default unless they got their way.
Democrats such as Sen. Levin are proposing to replace these across-the-board budget cuts with tax revenue from Wall Street and the richest 2% of Americans. But Republicans are not giving an inch, insisting on protecting the tax loopholes of Wall Street and the richest 2%, no matter what the cost.
The AFL-CIO is urging lawmakers to simply repeal “sequestration.” The sequester was a bad idea in the summer of 2011, and it is still a bad idea now. Any further deficit reduction should come from closing tax loopholes for Wall Street and the richest 2% of Americans, not from budget cuts that threaten the economic future of the 98%.
Call your representatives at 888-659-9401 and urge them to:
- Protect Social Security, Medicare or Medicaid from benefit cuts.
- Repeal the “sequester” and close loopholes for Wall Street and the wealthiest 2% of Americans instead.