19 August 2016 EY Center for Tax Policy: This Week in Tax Reform for August 19 CBO update: On Tuesday, August 23 (at 2 p.m.), the Congressional Budget Office (CBO) will release "An Update to the Budget and Economic Outlook: 2016 to 2026." Clinton on tax plan: During an August 17 campaign event in Cleveland, OH, Democratic presidential nominee Hillary Clinton reemphasized her plan to use tax changes for corporations and high-income individuals to pay for infrastructure and education investments. "We are going to tax the wealthy who have made all of the income gains in the last 15 years," she said. "The super wealthy, corporations, Wall Street, they're going to have to invest in education, in skills training, in infrastructure because, we have to grow this economy. We do need to have the resources to do that." Repeating many of the tax proposals she listed in an August 11 speech in Michigan, Clinton promised to end the tax benefits of corporations that outsource jobs, reward those companies who invest in their employees again, and "slap an exit tax on" inverting corporations and otherwise try to dissuade them from moving. She has previously called for increasing infrastructure funding by $275 billion over five years, paid for through business tax reform, but has not provided details. Clinton repeated that she would establish a new tax on multi-millionaires (a 4% "Fair Share Surcharge" on Americans who make more than $5 million per year), "crack down on tax gaming and close loopholes, and then use that money to make the kind of investments that will grow the economy for everybody." By contrast, Republican nominee Donald Trump "wants to give huge tax breaks to people who are wealthy like him and big corporations," Clinton said. She continued to call the Republican nominee's proposed 15% tax rate on pass-through entities the "Trump loophole," and said repeal of the estate tax "would save the Trump family $4 billion and do absolutely nothing for 99.8% of all Americans." She juxtaposed the cost of Trump's proposals with other priorities, saying $4 billion in estate tax relief for the Trump family could build 280 new elementary schools, eliminate the outstanding student loan of 166,000 Ohioans, or provide health care to 370,000 veterans. "And we could sure rebuild every crumbling bridge in this state, and fix a lot of the highways that are causing folks to incur expenses," Clinton said. She said that "Donald Trump doesn't need a tax cut," and neither does she: "It's time for the wealthiest Americans, whoever you are, as well as corporations and Wall Street, to pay your fair share in taxes." Wyden anti-deferral op-ed: In an August 17 op-ed on the Real Clear Politics Web site, Senate Finance Committee Ranking Member Ron Wyden (D-OR) said future tax reform efforts intended to grow the economy, create jobs, and rebuild infrastructure should begin with ending deferral of foreign earnings. "The goal of deferral was to protect against double taxation, but with the rise of tax havens and the ability to transfer intangible property around the world, too often Americans get fleeced by double non-taxation," Wyden said, adding that the policy amounts to $80 billion per year in corporate tax breaks. He said that in addition to creating an incentive to keep corporate profits overseas, deferral also allows companies to use gaps in the tax rules on intangibles to shift US profits abroad and subject them to little or no tax. Wyden said of ending deferral, "Combined with a new competitive corporate tax rate that reflects global tax realities and a structure that prevents shifting income to avoid taxes, it will encourage companies — both domestic and multinational — to build and grow their businesses in the U.S., creating red-white-and-blue-jobs here at home." A February speech in which Wyden laid out principles for international tax reform — a competitive rate, attracting investment/rewarding job creation, and revenue for infrastructure — and said a "plan built around those principles is a territorial system without the gaming" raised questions about whether he had softened his opposition to deferral. Wyden proposed a tax reform plan, most recently in 2011 (co-sponsored by retiring Senate Finance Committee member Dan Coats, R-IN), that would repeal deferral without moving to a territorial system. In his August 17 speech, Wyden said a substantial portion of his previous tax reform proposals would have been paid for by ending overseas tax deferral. "Over the last few weeks Americans have heard lots of talk that the economic system is rigged and corporations don't pay their fair share when it comes to taxes. At the heart of this mess is the big dog of tax rip-offs — tax deferral. This is the rule that encourages American multinational corporations to keep their profits overseas instead of investing them here at home, and it does so by granting them $80 billion a year in tax breaks. This policy is as foolish as it is unfair. It simply defies common sense." — Senate Finance Committee Ranking Member Ron Wyden (D-OR), August 17
Document ID: 2016-1421 | |||||||||||||||
