Will Congress pass a Billionaires Wealth Tax?
Will a Billionaires Wealth Tax happen?
The current proposal would not tax the top 1%, it would tax the top 0.0002%, just 700 billionaires. And force them to start paying taxes every year on at least some of their wealth, just like ordinary Americans who work for a living.
Democrats in Congress are close to finalizing a deal on the Biden Build Back Better Agenda, and they’re considering including one of the most significant tax changes in decades – the Billionaires Wealth Tax – in their reconciliation bill.
This is a pivotal week for both the Billionaires Tax and the entire Build Back Better Agenda. Many members of Congress barely knew anything about the Billionaires Wealth Tax before last week, and haven’t made up their minds on it yet – they need to hear this week from their constituents who support it.
In other states advocates are urging folks to “Please take a minute out of your day to call your Senators at 202-224-3121 and urge them to support the Billionaires Wealth Tax so that billionaires will pay taxes every year, just like working people like you.”
But with Wyden and Merkley as our Oregon Senators, that is clearly unnecessary. Instead, a “Thank you” for their sound judgement is due! We know they’ll support the Billionaires Tax. Shoot, it was Wyden’s proposal when other ideas were shot down!
This will not fix all the loopholes in the tax code designed to make the rich richer. But it is a commendable change.
New Tax Breaks for Google
The Oregonian’s Google set to win new tax breaks in The Dalles, makes it obvious that with two new data centers on the drawing board, Google may have played Oregon to avoid paying taxes yet again.
Google may simply abandon their oldest building rather than pay all property taxes on it when their 15 years of tax breaks end soon. They could simply move their data center into a new building with a new 15-year property tax deal.
A Wasco county administrator told Oregonian report Mike Rogoway that “negotiators working on Google’s new Strategic Investment Program deal did not consider seeking any assurances from the company about the older data center, its operations or how it would be valued. We’re just strictly negotiating the SIP agreement”
You have to get to the end of the Oregonian article to get to that juicy bit.
The beginning of progress…
Last Friday, the Organization for Economic Cooperation and Development (OECD), an international organization of countries working together toward economic progress, announced that 136 countries, including the United States, have agreed to a global minimum corporate tax rate of 15%.
This is huge news. For far too long, countries around the world have engaged in a “race to the bottom” with regards to corporate taxes. Countries have catered to the needs of big multinationals by pushing their corporate tax rates lower and lower with the aim of “winning” investments from those companies. Companies like Google, Apple, and Facebook took advantage of this race to the bottom and overwhelmingly established their headquarters in low-tax jurisdictions so they could avoid paying their fair share back home. In the end, the only winners of that race were wealthy corporations that ended up paying almost nothing in taxes on significant portions of their profits.
But thanks to significant work by the international tax community, this OECD agreement will limit the corporate tax avoidance that has gone unchecked for too long. Long-time tax haven holdout countries like Ireland and Hungary have signed onto the agreement, signaling a global shift in the fight for tax fairness
Now, multinational corporations making more than $866 million in revenue a year will have to pay a reasonable tax rate, no matter where they are physically headquartered. A 15% global minimum corporate tax rate will raise billions in new revenue for countries to spend on repairing infrastructure, combating climate change, improving healthcare systems, and more. It will also reduce economic inequality and make a positive, tangible difference in the lives of millions. In the midst of our own ongoing debate on taxation here in the United States, we welcome this news with open arms.
While we believe that a 15% corporate tax rate is a little too low to drastically reduce inequality, we certainly think that this is a massive step in the right direction for tax fairness.
There is, however, a catch to all of this. Even though all 136 countries have agreed to a 15% minimum corporate tax rate, they now must go home and change their own tax laws and treaties to comply with this agreement, ideally by 2023.
This is, as you might imagine, a real political challenge, and the United States is no exception. Congress must now pass legislation that raises the US corporate tax rate on international profits to at least 15%, up from the 10.5% rate that we currently have in place (just half of the domestic corporate rate of 21%), if they want to maintain compliance.
The obvious solution would be for Democrats to raise the corporate tax rate through the major reconciliation bill that is currently being negotiated. Republicans in Congress have already voiced opposition to the OECD agreement, and getting enough of them to sign onto a corporate tax increase to pass a bipartisan bill would be nearly impossible. Democrats are going to have to do this alone, and they have the ability to do so.
But as we’ve seen recently with the moderate opposition to Biden’s Build Back Better Agenda, Democrats are certainly not all aligned on raising taxes on the rich and corporations. It’s going to be a fight over the next several weeks (or months) to make sure that these international changes make it into the Democrats’ reconciliation bill, and you can be sure that we’re going to be on the front lines of that fight.
But for now, let’s take a moment to recognize how monumental and rare it is for over 100 countries to all agree on raising taxes on corporations, and celebrate this as an important milestone in the fight for tax fairness and economic justice!
Raise federal taxes on the wealthy, call Congress today
Tax Fairness Oregon urges you to call your representative before Friday, when the U.S. House may vote on the budget reconciliation bill.
Kurt Schrader (Oregon City) is a wavering member of the Democratic caucus, one of its least reliable votes. He needs our help in standing for the bill. Let’s call him, and help him vote for the bill.
The House bill would take modest steps to reverse some of the tax benefits Congress has extended to wealthy individuals and corporations. The Democrats’ narrow margin led them to ignore many Biden administration proposals that would reduce income inequality. It’s the best that can be done, and so it deserves our support.
Senate Finance Committee Chair Ron Wyden has released a “discussion draft” outlining some provisions he would include in a tax bill. He has not yet scheduled committee consideration.
We urge action because now is the best time to put your representative on notice that the bill matters to you. If the House fails to pass the bill, the effort may collapse. Few in the Democratic caucus are happy with the tax title of the bill. We aren’t. But progress in a polarized country is incremental.
Presidents Reagan, W. Bush and Trump signed tax cuts that exacerbated wealth and income inequality; Clinton and Obama signed reversals that mitigated some of the damage. The bill under consideration would undo some of the worst aspects of the Trump tax cuts.
We always have more work to do. This is our work: making our voices heard for a more equitable tax code. Whether your representative is Schrader, Blumenauer, Bonamici or DeFazio, your call is important. Call both Schrader and your own representative. The Capitol switchboard is (202) 225-3121.
Legislators tell us that calls are more effective than letters or email. And they take less of our time!
The top 1% are evading $163 billion a year in taxes
|A new report makes the case that narrowing the tax gap is part of the Biden administration’s
ambition to create a more equitable economy.
|As we’ve spoken with legislators since the end of session, one of the issues they’ve thought
worth pursuing is tax enforcement. We’ve an upcoming appointment with the new director of
Oregon’s Department of Revenue to explore the audit issue.If you want to help with this project, or if you’ve had a recent experience being audited by
either the IRS or the Oregon DOR, please, give a call to Brenda at 541 590-5060.Here’s the NY Times article on tax evasion by the rich and Biden’s plan:
Lobbyists parachute into Portland to defend the 1031 tax break
When our colleague Bennett Minton read an op-ed in Portland Business Journal from two out-of-town lobbyists extolling the benefits for Black investors and Black communities of IRC section 1031, he got riled. Googling around, he connected some dots. His results are outlined in a letter published August 30 in Tax Notes Federal, a premier national journal for tax practitioners that covers Congress.
Considering the racist past and present of Portland and Oregon, he’s still disappointed that a leading business publication would give space to the oft-repeated claim that trickle-down economics addresses racial equity. Bennett concludes: “When Black residents say ‘You don’t get it,’ this is perhaps something of what they mean, even though the front page of the August 27 Portland Business Journal teases three articles about the BIPOC community.” Here’s his letter in Tax Notes.
Support HB 2379 with the New Amendment
Should the legislature bring back a tax when this
Changes to this?
Oregon counties are in desperate need of funding. For the past 20 years, an unfair timber tax system has allowed logging companies to profit from rural counties’ natural resources and leave them in the lurch financially. Now these communities are struggling to maintain their sheriff’s departments and fund mental health and emergency services for their residents.
Additionally, the corporate structure of many timber companies that own land in Oregon (e.g., real estate investment trusts and timber investment management organizations) allows them to get away with paying no corporate income taxes. So while these companies prosper from Oregon’s natural resources, the state has lost out on revenue.
Now is the time to take action, and we need your help: write to your legislators to encourage them to pass a bill this year to rectify this financial imbalance.
HB 2379 is a solution. It proposes reinstating the severance tax, which is a tax on the value of timber at the time of harvest. Logging companies would pay this in addition to the tax on the land they own. This system would ensure that all landowners are paying their fair share.
The bill is currently with the House Revenue Committee. HB 2379’s sponsor, Rep. Paul Holvey, is submitting a new amendment to the bill that would direct money collected from the tax as follows:
- 40% to the counties where timber is harvested
- 40% to the Wildfire Management Fund
- 10% to the Forestry Department to administer the Oregon Forest Practices Act
- 5% to the Oregon Watershed Enhancement Board
- 5% to Oregon State University Forestry Education and Research to fund educational programs for K-12 students
The proposed tax rates are:
- 1% for landowners of 500 acres or less
- 3% for landowners of 500–2,500 acres
- 4% for landowners of 2,500-5,000 acres
To promote sustainable forest management, there are incentives for landowners that receive Forest Stewardship Council certification:
- 50% reduction in severance tax for landowners with 5,000 acres or less
- 1% reduction in severance tax for landowners with 5,000 acres or more
With this amendment, the bill would:
- ensure that timber counties have the money they need to pay for services
- collect proceeds for firefighting as we face increasingly devastating wildfire seasons
- assist communities with wildfire preparedness so residents can reduce harm to their homes
- tax industrial timber companies—which have lower costs and higher profits—at higher rates than small timberland owners
- promote responsible and sustainable forest management, which is critical for protecting drinking water supplies and fighting climate change
Timber companies have skated by long enough and our communities need funds to pay for the many challenges they’re facing.
Our legislators need to hear that the unfair timber tax structure is an urgent problem they must act upon now to fix. Please write to your legislators and the members of the House Revenue Committee to urge them to support HB 2379 with the new amendment.