April 20, 2021
Senate Finance holds hearing on inequality in the tax code
The Senate Finance Committee's April 20 hearing, "Combatting Inequality: The Tax Code and Racial, Ethnic, and Gender Disparities" included discussion of the lower taxes for wealth income versus wage income, Opportunity Zones, the benefits of the TCJA, and the SALT cap, with Republicans noting that repealing the limitation benefits higher income taxpayers. Witness Mihir Desai discouraged the Committee from pursuing corporate tax increases, especially on their global activities, because the idea that there is a lot of revenue to be gained there is not well-founded and doesn't reflect that half the corporate tax is borne by workers. There was also discussion of the tax gap, which some senators are arguing should be a revenue source, especially after recent comments from the IRS commissioner that it may be $1 trillion per year. The Committee has noticed another hearing, "Creating Opportunity Through a Fairer Tax System," in the Fiscal Responsibility and Economic Growth Subcommittee, for next Tuesday, April 27 (2:30 p.m.).
In an opening statement, Chairman Ron Wyden (D-OR) called for more tax data transparency, saying it "makes no sense to blind lawmakers to the key data that would illuminate injustice in our tax laws" and "this committee is going to make sure that happens." Ranking Member Mike Crapo (R-ID) listed beneficial provisions in the TCJA and said, "It will be increasingly challenging to return to an economy as robust as we saw before the pandemic with the endless streams of tax hikes and regulation that the current Administration continues to propose."
Testimony in brief:
Additional information is available in the attached Tax Alert.
Statements and testimony are availabe here.
Inequality in the Tax Code