This afternoon, Senate Republicans on the Senate Budget Committee cast a vote that underscores the genuine nature of the differences between Republicans and Democrats on taxes in a fresh way. They voted unanimously against an amendment — to the Dem budget — that would seek to close loopholes that enable profitable corporations to pay nothing in taxes.
The amendment, introduced by Senator Bernie Sanders, is described this way by a Budget Committee summary:
This amendment would establish a deficit reduction reserve fund that would seek to ensure that large profitable corporations cannot use loopholes to entirely avoid income tax, and direct savings recovered from closing such loopholes to deficit reduction.
Citizens For Tax Justice has found that as of last spring, over two dozen major corporations “remained in the no-federal-income-tax category over the 2008-2011 period.”
The good news is that the amendment passed the committee with all Dems voting for it, though its future in the Senate budget legislation is anything but assured. The noteworthy point is that every Republican on the committee voted against it.
Dems on the committee are taking this vote as a sign that there is literally no proposal to bring in new revenues that most Republicans are willing to support, no matter how sensible or fair minded. Republicans have argued in the past that corporations have a responsibility to their shareholders to reduce the amount they pay in taxes as much as possible within the law. But what this vote shows is that Republicans prioritize this corporate imperative over deficit reduction, even in the cases of corporations that pay no taxes at all. This really doesn’t bode well for the chances that Republicans may agree to new revenues, does it?
The politics of this are very odd. As you know, Republicans also oppose measures that would ensure that some millionaires and billionaires — the ones who currently pay a lower rate than many middle class families — would pay an income tax rate of 30 percent. They also oppose taxing carried interest and dividends as ordinary income. Why do Republicans want to be the party that prioritizes defending the ways the tax code is rigged in favor of the rich and corporations — over reducing the deficit they claim is a threat to American civilization? Yes, yes, yes, Republicans want “tax reform.” Indeed, Republicans on the committee couched their opposition to today’s vote as rooted in a desire to wait for comprehensive tax reform to deal with such issues, according to one source who was present. But as today’s vote shows, the hostility towards finding ways in the short term to make the tax code fairer via new revenues — even in service of reducing the deficit – is overwhelming.
Even Joe Scarborough is trying to beat it into the heads of Republicans that this is not a smart political stance to take. On Morning Joe today, he said Republicans should open themselves up to a deal that generates revenues by closing loopholes, or face political peril. “When I hear people are paying 16 percent in taxes, I resent them. I think they should pay at least 30 percent in taxes. And you know what? there are a lot of conservative republicans that feel like I do,” he said. Scarborough continued that Republicans should stop being “the party that protects billionaires” and “hedge fund brokers” who “pay 16 percent in taxes.” Scarborough may have something to say about today’s vote, too.