It's not a law of nature that causes government to be impoverished. We get
media propaganda all the time about how we the people should balance the
budget by eliminating beneficial programs -- we don't hear much about
these corporate rip-offs.
-rkm
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Date: Sat, 7 Oct 1995
From: Janice Shields <•••@••.•••>
To: Multiple recipients of list <•••@••.•••>
Subject: TaxWatch Groups and Recommendations
TAXWATCH RECOMMENDS END TO BUSINESS TAX BREAKS
TaxWatch, a broad coalition of organizations across the country*, has
recommended that Congress eliminate 12 business tax breaks that total
$91.1 billion over five years:
Eliminate Percentage Depletion for Oil & Gas, Other Fuels & Other Nonfuel
Minerals
$3.3 billion
Percentage depletion allows companies to claim deductions in excess of
investment costs.
Eliminate Non-Conventional Fuel Production Credit
$4 billion
The credit has distorted fuel markets without displacing imports, has not
resulted in the increased production of nonconventional fuels, and has
added to pollution problems.
Eliminate Possessions Tax Credit
$19.3 billion
The credit provides incentives to invest in Puerto Rico and the Virgin
Islands, rather than a direct incentive to employ workers. Few jobs have
been created relative to the tax revenue lost.
End Deductibility of Business Entertainment Expenses
$2 billion
Outlays for night clubs, sporting events, theaters, etc. should not be
deductible in computing taxable business income.
Eliminate Reduced Rate for First $10 Million of Corporate Taxable Income
$22.1 billion
This provision encourages formation of multiple rather than single
corporations, encourages large corporations to control timing of income
and expenses, and provides tax shelters for high income individuals.
Eliminate Small Life Insurance Company Taxable Income Adjustment
$0.3 billion
Congress agreed that the companies' taxable income was more accurately
reflected without this provision. Reducing taxes on business income
based on the size of the business does not serve the equity purpose of
basing taxes on ability to pay.
Close Loophole Allowing Large Mutual Life Insurance Companies to Avoid
Tax Payments
$8 billion
Mutual life insurance companies are able to deduct taxes paid on capital
gains from income taxes that would have been due on rebates of profits to
policyholders.
Disallow Interest Deduction for Corporate-Owned Life Insurance Loans
$2.8 billion
When corporations take out loans and use employee insurance policies as
collateral, the interest payments are tax deductible even though the
corresponding investment income within the policy is exempt from
corporate income taxes.
Eliminate Exclusion of Interest on Industrial Development Bonds
$1.1 billion
The primary beneficiaries of these bonds are individuals or businesses
rather than the general public and there is no evidence that jobs are
created, rather than simply moved.
Reform Inventory Property Sales Source Rules Deduction
$18.6 billion
Companies declare income from U.S. exports as foreign-source income to
increase the amount of the foreign tax credit that the company can take
against U.S. taxes.
Eliminate Exclusion of Income from Foreign Sales Corporations
$7.7 billion
U.S. exporters are permitted to exempt a portion of their export income
from U.S. taxation.
Impose Minimum Tax on Foreign-Owned Businesses
$1.9 billion
A minimum tax would discourage foreign companies with U.S. revenue, from
using transfer prices to move income out of the United States to avoid
U.S. taxation.
*Organizations and individuals who signed letter to President Clinton and
Members of Congress:
ACORN
Americans for Democratic Action, Inc.
Center for Advancement of Public Policy
Center for Community Change
Center for Law and Social Policy
Church of the Brethren
Citizens for Tax Justice
Communications Workers of America
Community Nutrition Institute
Co-op America
Economic Policy Institute (4 economists)
Environmental Action Foundation
Friends Committee on National Legislation
International Brotherhood of Teamsters
Ralph Nader
National Association of Social Workers
National Black Caucus of State Legislators
National Consumers League
NETWORK: A National Catholic Social Justice Lobby
Oil, Chemical and Atomic Workers International Union
Project South: Institute for the Elimination of Poverty and Genocide
Public Citizen
Share the Wealth
Unitarian Universalist Service Committee
United Steelworkers of America
United We Stand America
-----
Janice Shields
Coordinator, Corporate Welfare Project
Center for Study of Responsive Law
P.O. Box 19367, Washington, DC 20036
202-387-8030 | Internet: •••@••.•••
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