A Fair Tax and Budget Program for Working People and Our Communities
Over the past decades, corporate America and Wall Street financiers have used the tax code and government budget process to enrich themselves at the expense of millions of working families and communities. Their so-called “better business climate” program is designed to cut taxes on the rich and big corporations, eliminate government regulations, especially on the financial sector, cut government social spending to pay for these big tax breaks for the wealthy, and attack unions and the collective bargaining process.
The result of this “trickle down” tax and budget program – driven by a corporate-funded campaign detailed in the Chamber of Commerce’s 1971 “Powell Memo” -- has been a disaster for working families, redistributing the fruits of our labor to the wealthiest Americans. In recent decades, the gap between the richest Americans and everyone else has widened as collective bargaining coverage has declined, workers’ wages have stagnated, household and student debt have skyrocketed, and one out of every five American children live in poverty. Over the same period, the top one percent saw incomes rise by over 200 percent, CEO pay is 347 times average worker pay, while income earned by those in the financial sector exploded. In recent years, as our economy has begun to recover from the Great Recession, the top one percent captured a full 85 percent of income growth.
Despite the populist rhetoric of the Trump presidential campaign, the Trump Administration and key Republicans in Congress are pushing tax and budget policies to benefit the wealthiest Americans, including the Wall Street executives and billionaires that dominate the Trump cabinet. The Trump tax plan would cut the corporate tax rate from 35 to 15 percent, retain current corporate tax loopholes, and lower the top individual rate for the wealthiest Americans. Citizens for Tax Justice estimates that almost half the benefits of the Trump tax plan would go to the top 1 percent.
These tax proposals come in the context of a federal tax system in which everyday working Americans pay taxes on their income every week, yet many of the wealthiest Americans, corporate executives, and Wall Street bankers pay little or no tax at all.
The corporate share of federal taxes dropped from 32 percent in 1952 to just 11 percent in 2015, due to cuts in the corporate tax rate, special interest tax loopholes, and the ability of corporations to park $2.6 trillion in foreign subsidiaries and foreign countries where they pay no U.S. taxes.
The income of the top 25 hedge fund managers equals that of the combined income of the 158,000 U.S. kindergarten teachers. Yet, special interest loopholes enable hedge fund managers to pay a lower federal tax rate than that paid by those teachers and most working Americans.
After driving our economy off a cliff with their recklessness and greed, precipitating the Great Recession, the biggest banks benefited from taxpayer-funded bailouts and returned to
profitability. Yet nine of the largest and most profitable U.S. banks paid an average federal tax rate of 18.6 percent between 2008 and 2015 and avoided paying $80 billion in taxes that could have helped make college more affordable or repair our aging infrastructure and communities.
To be sure, our federal tax system needs reform, but not the reforms proposed by President Trump, key Republicans in Congress, and their corporate and Wall Street allies. We need progressive tax reform to close corporate and special interest loopholes, and that is why CWA, together with labor, consumer, faith-based allies and Americans for Financial Reform, have launched the “Take on Wall Street” campaign. Together we will fight to eliminate corporate tax loopholes for companies that offshore jobs, get rid of the provision that rewards hedge fund managers with lower tax rates, end the “CEO Bonus” that allows corporations to exclude most of their compensation from taxation, and adopt a Wall Street sales tax that would reduce Wall Street speculation while raising revenue for essential public programs.
The Trump Administration and Congressional Republicans propose to fund their tax cuts for the rich with drastic cuts or elimination of many critical programs that CWA members and our families, and all working families, rely on, leading to direct loss of jobs for thousands of CWA members. The Trump budget would cut federal discretionary spending in half, slashing Medicaid, the Children’s Health Insurance Program, unemployment insurance, employment and training programs, OSHA, food stamps, Social Security Disability Insurance, education, housing, environmental protection, and many other programs that support working people and our communities.
Even the urgent national priority of repairing our neglected roads, bridges, highways, ports, airports and high-speed broadband infrastructure has become another tool for Wall Street and the Big Banks to use to line their pockets. Instead of providing direct public investment in long overdue infrastructure repairs that would create millions of good paying jobs, the administration and key Republican leaders in Congress are looking to auction off critical public assets like highways and ports to major financial interests – including foreign entities – giving these lenders and Wall Street interests a direct handout of public tax dollars. This at the same time that Trump’s budget calls for $2.4 billion in cuts to federal transportation programs.
These “public private partnership” financing schemes are yet another way of privatizing and outsourcing critical public sector jobs and are used as a tool to drive down public sector workers wages and benefits, creating yet another “race to the bottom” for all workers.
CWA supports an alternative vision – one embodied in The People’s Budget proposed by the Congressional Progressive Caucus. The People’s Budget proposes practical, progressive programs that invest in 21st century infrastructure and jobs, tackles inequality, makes corporations pay their fair share, and strengthens essential education, health care, environmental, housing, veterans, and other public programs to support economic growth and strong communities and families.
Resolved: CWA supports equitable tax policies that make the wealthy and corporations pay their fair share in order to provide adequate resources to support the public investments necessary to build a strong economy, vibrant communities, and a good quality of life for all Americans. CWA opposes tax plans in Congress, as well as at the state and local levels, that would reduce tax rates on corporations, the financial industry, and the wealthy.
Resolved: As part of the Take on Wall Street Campaign, CWA will fight to get rid of tax breaks for companies that offshore jobs and profits; eliminate the “CEO bonus loophole” that permits tax write-offs for executive compensation; and end tax preferences that allow private equity and hedge fund executives to pay lower tax rates than most working Americans. In addition, CWA will fight for a Wall Street sales tax that imposes a fee on all Wall Street transactions to discourage short-term market speculation and make sure Wall Street funds Main Street.
Resolved: CWA opposes the Trump Administration budget and any federal budget proposals that slash critical programs that working families rely on and that eliminate the jobs of thousands of CWA members. CWA will fight for public investments in health, education, public safety, transportation, veterans, environmental, labor, and other domestic programs that build a strong economy, communities, and families.
Resolved: CWA opposes federal legislation that does not directly invest in public infrastructure programs and create meaningful jobs. We oppose funding mechanisms that are intended to line the pocket of Wall Street financiers and bankers, to privatize critical public infrastructure, and to drive down the wages and benefits of public sector jobs.
Resolved: CWA will continue to educate our members, activists, and leaders through our “Runaway Inequality” and other political education programs as a critical component toward building a broad-based, strategic movement for progressive political change.