This fall a major showdown is brewing over tax and budget priorities in our nation’s capital. Senator Max Baucus (D-Montana) and Congressman Dave Camp (R-Michigan) have been laying groundwork for a rewrite of the U.S. tax code.
At a time when austerity economics have forced poor and middle-class families to shoulder nearly $2 trillion in cut-backs during recent budget debates, a fundamental question faces policy makers: will tax reform finally require corporations and the wealthiest 2% to pay their fair share to help right our economic ship?
For a long time, the conventional wisdom in Washington, DC – though sometimes we question the wisdom of Beltway elites simply following their own conventions – has been that the business community would speak with one voice on the issue of rewriting our tax code. But, increasingly fissures are emerging over priorities for tax reform.
Here’s a quick guide.
- The U.S. Chamber of Commerce. The Chamber and other big business coalitions want tax reform to lower corporate tax rates and hope to permanently enshrine offshore tax dodging into the U.S. tax code by implementing a so-called “territorial” tax system.
- NFIB. The NFIB – which purports to be “The Voice of Small Business,” but has been increasingly called out for their right-wing partisan ideology – normally finds itself aligned with the big business crowd. But, during the “fiscal cliff” debate, NFIB was upset that the very wealthiest business owners were asked to contribute a little more when marginal tax rates increased for the top 1% of taxpayers. Now, they’re out with a study that complicates the case for the corporate titans showing that the largest corporations pay lower effective tax rates than many small businesses.
- The Main Street Alliance. There are other small business voices that take a more holistic view of the impact of tax and budget debates on the Main Street economy. Small business owners from the Alliance-affiliated Main Street Alliance network recognize that the top issue limiting small business success is weak consumer demand, and continued job-killing budget cuts are limiting the potential of economic recovery. The Main Street Alliance came out last week with a compelling counter-analysis to the NFIB’s tax rate study that points to what ought to be its logical conclusion: tax reform should require corporations to pay their fair share.
In the meantime, grassroots activists from Alliance for a Just Society affiliates across the country are taking to the streets in coalition with Americans for Tax Fairness to put the pressure on Congress to end offshore tax dodging and invest in U.S., with events happening in local communities across the country next week as the congressional August recess continues.