An article on secret tax breaks, written by the political analyst Robert Reich, identifies a development that seems to have slipped by the regular media and, therefore, is yet another example of Trump’s totally opaque method of governing … if you can call it that: The Trump administration is handing out secret tax breaks for the country’s richest and most powerful corporations.
President Biden included in his Inflation Reduction Act a Corporate Alternative Minimum Tax (CAMT), which was designed to end one of the most outrageous forms of inequality in the tax code; that is, allowing corporations that make more than $1 billion a year in profits to tell shareholders one story while telling the IRS another. Before CAMT, those corporations could publicly report huge profits to their shareholders while reporting minimal, or no, profits to the IRS, thus paying nothing in federal income taxes. AND they could do that without any form of prosecution.
I must admit that when I first read this report my reaction was, “how could that possibly have happened in the first place?” How could Congress have allowed such a flagrant violation of the tax code? Even Congress doesn’t make a mistake of that size without it being deliberate: It almost defies belief. It is so outrageous that I initially thought it put Reich’s reporting into question. However, the fact that Biden’s Inflation Reduction Act finally sought to close that gap by requiring those giant corporations to pay at least a 15% tax on the profits they publicly flaunt, suggests that Reich reporting is accurate. Equally obviously, that particular loophole in the tax code was carved out through many years of high-powered lobbying.
The CAMT provision was expected to raise $222 billion over a decade and put an end to the era of trillion-dollar companies skating by tax-free.But now, Trump’s Treasury Department and IRS are busily rewriting enforcement rules, raising income thresholds, and creating massive exemptions for favored industries, effectively signaling to America’s biggest corporate tax dodgers that the coast is clear, yet again. Trump-favored industries, such as cryptocurrency, private equity, and multinational firms, are being handed freshly designed loopholes to avoid even the modest 15% minimum tax.
This is a gargantuan inequality; corporations posting billion-dollar profits to shareholders while paying pennies, or nothing at all, to the country they profit from. Every exemption and loophole is a windfall to billionaire investors and corporate insiders, allowing them to walk away tax-free while workers and families shoulder the burden. Congress can, and must, stop this egregious backflow of billions into bulging corporate coffers. Lawmakers must hold hearings to expose the full extent of these secret deals and require the Treasury Department and IRS to enforce the Corporate Alternative Minimum Tax exactly as Congress wrote it. This isn’t asking them to do something radical, it is merely asking them to do their job. All they need is the “backbone” and the guts to stand up to Trump’s administration and to Trump himself. Their conduct to date doesn’t give me much confidence that will suddenly acquire such virtues.
When corporations cheat, the public pays. When billionaires avoid taxes, essential services like nutrition assistance for children, Medicaid, Medicare, and the Affordable Care Act are starved of resources. Working families are left holding the bag, saddled with rising prices, medical debt, and skyrocketing healthcare premiums.
I have taken the essence of Robert Reich’s article and added some thoughts of my own. That’s why the blog is not presented in quotes.
At the end of his article, Robert Reich requests that the American public, and the American voters, “stand up for just and fair taxation for the good of our country”. I couldn’t agree more.
