Published piece, Sept 12, 2022

Democrats should ignore their specious arguments and, instead, use this tax initiative as a rallying cry for the upcoming midterm elections

President Joe Biden recently signed the Inflation Reduction Act (IRA) into law, making it the Democrats’ signature healthcare, climate, and tax reform package. This historic achievement will likely be remembered as one of Biden’s most significant legislative victories. Many aspects of the IRA make it a big win for tax fairness, but by far the most notable is the 15% minimum tax that the bill levies on America’s biggest and most profitable corporations.

Most Americans desperately want to see taxes raised on the wealthy and corporations.

Unfortunately, not everyone in America is celebrating the IRA’s 15% corporate minimum tax as a “win.” Conservative politicians and high-profile media pundits have wasted no time in bemoaning its passage. Republican Senator Mike Crapo, a ranking member of the Senate Finance Committee, promised that a corporate minimum tax would burden American manufacturingand fall as an “increased tax” on low-income Americans.

Since the 2017 Tax Cuts and Jobs Act lowered the corporate tax rate and created new tax loopholes, billion-dollar corporations have been getting away with murder when it comes to paying taxes. In 2020, no fewer than 55 companies—including household names like Nike, FedEx, and Salesforce—paid nothing in corporate income taxes. The 15% corporate minimum tax ends this egregious behavior and finally forces corporations to start paying the taxes they rightfully owe.

Nothing could be further from the truth. The only Americans that will “suffer” under such a tax will be ultra-wealthy C-suite executives and corporate investors—ordinary Americans and American manufacturing will be just fine.

According to an analysis by the Joint Committee on Taxation (JCT), roughly half of the revenue raised from the corporate minimum tax over the next decade will come from companies in the manufacturing industry. Senator Crapo claims this is unfair, as these companies are “already struggling with inflation, supply-chain disruptions, and an impending recession.” But in reality, the new corporate minimum tax will only affect companies that make at least $1 billion in profits and that currently pay significantly less than the current corporate tax rate. These sorts of companies can hardly be considered “struggling.”

Senator Crapo would also have Americans believe that the corporate minimum tax would spell the end to domestic manufacturing. But the facts suggest otherwise. According to a separate analysis from the JCT, about half of the manufacturing companies subject to the tax will be textile, apparel, leather, pharmaceutical, and electronic companies that produce most of their products abroad. Rather than pushing manufacturing abroad, the new corporate minimum tax could actually incentivize more domestic manufacturing as it cracks down on companies that choose to shift profits and operations overseas.

Democrats shouldn’t be scared by Republican pushback; they should sell this new tax to the American people as a serious win. Call me crazy, but I believe that most Americans agree that corporations should be paying taxes in the country where they’re based and sell most of their products. They don’t deserve free rides any more than anyone else in America.

Corporations rely on our publicly funded infrastructure—our streets, highways, roads, and bridges—to move their products around just like the rest of us. They rely on our public schools to educate their workers just like the rest of us. They rely on our publicly funded courts to sue foes just like the rest of us. And for these reasons, it’s time that they finally start paying for it all, just like the rest of us.

The corporate minimum tax, as written in the IRA, is not perfect. It differs in some critical ways from the 15% global minimum tax that over 130 Organization for Economic Cooperation and Development (OECD) countries agreed upon last year. And it certainly doesn’t go far enough to reverse the trend that is the corporate consolidation of wealth and power in America. But it nonetheless is an important first step in stopping the worst of corporate tax dodging and putting an end to stories of mega-corporations like Nike and FedEx paying nothing in taxes.

Even though the corporate minimum tax is now the law of the land, Republicans like Senator Crapo will not stop their attacks. Democrats should ignore their specious arguments and, instead, use this tax initiative as a rallying cry for the upcoming midterm elections. Most Americans desperately want to see taxes raised on the wealthy and corporations. The corporate minimum tax won’t completely undo the immense inequality in our tax code, but forcing some of the country’s most profitable corporations to pay more taxes is certainly a great start in giving voters what they want.

---

Published by Common Dreams (https://www.commondreams.org), Sept 12, 2022. Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.

DALE WALKER

Dale Walker is a former financial services executive living in San Francisco and is an active member of the Patriotic Millionaires.

We Democrats have a lot of problems!

The polarization between the extremes within our party is a major problem. The issue is not our diversity of opinion, but rather, our failed process to reach agreement. Agreement must be reached sufficiently prior to the election to allow time for proper messaging, campaigning, and media, all of which should present a clear and unified point of view–without the extremes complaining they didn’t get all they wanted. This failure occurs repeatedly by Democrats–inability to reach a consensus. Differences are often aired from our own extremes, and this has the likelihood of drawing off voters, especially independent voters, from trusting the wisdom of the party in terms of the precise legislation which is brought to the floor. Take the examples of Manchin and Sinema in the latest round of negotiations. We can’t be airing our own grievances right up to the ballot box. We claim we want unification? Demonstrate it yourselves, our Democratic representatives!

It’s one thing to stand on principal, but at the end, the alternative is loss of the legislation, and/or living with the Republican proposal, likely far worse.

Joe Biden. He’s a great President, especially for these times. bi-partisan, centrist, politically experienced, honorable, with high integrity. However, he’s also a burden to the Democratic Party. He’s old, sometimes stumbles verbally. He’s unpopular because he’s up against a high level of inflation, partly inflicted by his own legislation, and exacerbated by global issues beyond any President’s control. Let’s face it, even we Democrats yearn for a younger John Kennedy type who could rally people equally with Trump–or better.

Messaging is another problem for Democrats. Take the border. Yes, we are allowing more people to cross the border, seeking asylum. Republicans focus totally on the illegality, the dangers of crime, etc. We Democrats should be messaging the plight of specific families. We should be messaging the need for immigrant workers. We should be illustrating why and how we can accommodate more immigrants. We should be making specific proposals for streamlining our legal immigration process. We should be preaching Christian charity to Republicans, who claim to be highly religious. We should be arguing that Republicans just don’t care about the needs of our factories and farmers, and about the desperate needs of our black and brown immigrants, vast majority of whom are obeying all laws, working, paying taxes, and contributing mightily to our great nation. We seem paralyzed by the Republican issue–just whether we have enough control of the border.

And, do we demonstrate what we preach when we have the authority to do so? Take housing policy. In the 18 states in which Democrats control all three seats of government, do we actually manage to create affordable housing? In California, we do not. We are locked in nimby-ism here. Furthermore, we don’t have the most progressive taxing systems in those Democratic controlled states. Some Republican controlled states are more progressive than we are in California or Washington. Third, we allow school funding by districts, resulting in the kids with the greater needs having the least resources. There are other examples.

All this said, how about the Republican Party? Wow, the comparison would astound a cosmic visitor. Mistakes and shortcomings for the “liberal” party of the US pale by comparison to those of the “conservative” party. There was absolutely nothing of significant positive value to the nation contributed by Donald Trump Presidency. There is nothing of value contributed by Trump continuing to wield power over the Republican Party. That is, except for the benefit to the Democratic Party, as voters examine Trump’s weak candidate endorsements in the upcoming midterms, and his mounting legal troubles. Yes, all of this is likely to deny Republicans control of both Houses of Congress in the midterms, now only 60 days away.

So, Democrats need to get-it-together. Lots of mistakes. But Republicans are caught in a suicide pact with Donald Trump

If it comes down to two old guys in 2024, the same two, I’ll take our guy. He’s head and shoulders above and beyond Trump, and even a good case of dementia would not change that ranking.