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TAX FAIRNESS: WE NEED A “PLAN B”




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May 7, 2013 | 4,164 views | 2 comments

By Richard Trumka

Most voters agree that big corporations and the wealthy should start paying their fair share in taxes. But of course big corporations and the wealthy don’t want to do that. They want to pay less, and they are used to getting their way. So what do you do?

Some people in Washington think the answer is a “Grand Bargain.” In a “Grand Bargain,” Republicans agree to stop protecting millionaires from having to pay a single penny more in taxes. In return, Democrats agree to cut Social Security, Medicaid, and Medicare benefits.

That doesn’t sound like a bargain to me. It sounds more like working people getting ripped off. Of course big corporations and the wealthy need to start paying their fair share--but cutting benefits is not the answer.

Let’s not forget how we got here. The richest Americans have been getting richer for decades, while the wages of working people have barely kept up with inflation. Then tax cuts for Wall Street and the wealthy threw the economy even more out of balance. Now economic inequality is the highest it has been since the Great Depression and the tax burden has shifted more and more to working people.

Even worse, some of the tax breaks enjoyed by Wall Street are doing real harm to our economy. Take the tax subsidy for sending jobs overseas, for example. Right now, corporations can lower their tax bill by moving factories to lower-tax countries. That’s not right.

Eliminating the tax subsidy for offshoring would raise $583 billion over 10 years. That’s not chump change. That’s money that could be used to invest in education and infrastructure, put people back to work, and lay the groundwork for long-term economic prosperity.

Right now, this idea is not taken seriously in Washington because Wall Street doesn’t like it. But the American people are overwhelmingly in favor. Surely that should count for something in a democracy.

Asking Wall Street and the wealthy to pay their fair share is not only the fair thing to do, it is also necessary to fix the economy. It would reduce inequality, which has been acting as a drag on economic growth. Reinvesting these revenues the right way could also put more buying power in the hands of the middle class, which was once the secret of America’s economic success.

By contrast, the Grand Bargain takes us in the opposite direction. Cutting Social Security, Medicaid, and Medicare benefits would increase inequality and undermine consumer buying power.

Some people tell us we don’t need to worry about any “Grand Bargain.” They say that Republicans’ refusal to tax millionaires and big corporations means there will never be a “Grand Bargain” that cuts benefits.

But think about what this means. It means big corporations and the wealthy will never have to pay their fair share of taxes. Or it means our only hope of getting them to pay their fair share is to cut benefits eventually.

Let’s face it: the “Grand Bargain” is a dead end.

If we want to rebuild our economy, raise wages, put America back to work, and rebuild the middle class, we need to set a different course--sooner rather than later.

--
Richard Trumka is President of the AFL-CIO.
 
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Your Opinions and Comments

 
New Guy  
Wilson County  
May 8, 2013 7:53am
 
Old news, move on. This happened in July 2012. Things have changed like the taxs raised on the top earners.

 
American Citizen  
USA  
May 7, 2013 4:03pm
 
WHAT A CROCK! Eliminating the tax subsidy for offshoring would raise $583 billion over 10 years. I hope someone will explain this ...

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