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Monday, December 09, 2019 {{ new Date().getDay() }}

Taxes

Sen. Ted Cruz

Photo by NASA HQ PHOTO is licensed under CC BY-NC-ND 2.0

Reprinted with permission from Daily Kos

Senate Republicans are dead set on making sure that the rich people who they've been helping to avoid pay their taxes continue to have the privilege of cheating the rest of us. It would appear that the Democrats participating in the sham called bipartisan infrastructure negotiations are okay with that. According to Sen. Jon Tester, a Montana Democrat, the group is "looking at alternative pay-fors to IRS tax enforcement."

Again, this is about letting the wealthy off the hook for the taxes they already owe. It's not about new taxes. It's not about raising anyone's taxes. It's about continuing to allow the super-rich to cheat the rest of us, who do pay our tax bills every year.

Republicans have been raising holy hell over the idea that President Joe Biden wants to strengthen the IRS enough so that it can go after the really big tax cheats, the ones robbing the nation of hundreds of billions of dollars, instead of the working poor peoplewho are easier to audit, the ones who can't afford lawyers to intervene. Fully funding the IRS and clawing those owed tax dollars out of the hands of people who can damned well afford to pay has been included as one of the ways that the bipartisan group has said they'll pay for their almost $600 billion proposal for hard infrastructure.

That, apparently, is out and apparently Democrats in the bipartisan group are accepting that fact. Even though it's the likes of extremist Republican Sens. Ted Cruz and Marsha Blackburn who are raising hell—extremists who were never going to vote for an infrastructure plan that helps President Joe Biden in the first place. Senate aides working with the group confirmed to The Washington Post that "it is likely to be removed from the deal."

That means that the fire sale of existing infrastructure to the highest hedge fund bidders, who would then be in a position to make the public pay for its use all over again, could still be in. Because they have to figure out how pay for it somehow anyway. Or at least they say they do, which they really don't because borrowing money is still cheaper than dirt. As of earlier this month, White House aides were telling Democrats in phone conversations that was not an option, but we haven't seen a high-level, public denunciation of that idea.

Republicans aren't just having hissy fits over the IRS making them and their buddies pay all their taxes, however; they're outraged that Majority Leader Chuck Schumer wants them to finish their work. A short exhibit of their varied tantrums:

Never mind that they've supposedly been working on this since April, when Sen. Shelley Moore Capito (R-WV), who is so concerned that there just isn't enough time, started negotiating with Biden. They announced this supposed bipartisan agreement more than three weeks ago. She added that she thought Schumer's scheduling the vote was an attempt "to put pressure on the group to either put up or shut up."

Well ... yes. And about time, too. Because seriously, they've been at this forever. Now, we all know Republicans are awfully rusty when it comes to doing actual work (like writing bills), but there's a bunch of Democrats who could be doing all of that hard part. So what in the hell have they been doing all these weeks, that they can't be ready by next Wednesday?

They've been wasting time, is what they've been doing, hoping to draw this process out and have it die from neglect. And Democrats have been letting them get away with it because "bipartisanship." Now that the $3.5 trillion budget resolution train is getting loaded up, yes, this group needs to put up or shut up. And pay their damned taxes.

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Sen. Elizabeth Warren

Reprinted with permission from ProPublica

Two prominent members of the Senate Finance Committee are calling for an investigation into tax avoidance by the ultrawealthy, citing ProPublica's "Secret IRS Files" series.

In a letter sent today, Elizabeth Warren (D-MA.) and Sheldon Whitehouse (D-RI) wrote to the committee's chairman, Ron Wyden (D-OR), that the "bombshell" and "deeply troubling" report requires an investigation into "how the nation's wealthiest individuals are using a series of legal tax loopholes to avoid paying their fair share of income taxes." The senators also requested that the Senate hold hearings and develop legislation to address the loopholes' "impact on the nation's finances and ability to pay for investments in infrastructure, health care, the economy, and the environment."

Last month ProPublica began publishing a series of stories about tax avoidance among the ultra-wealthy, based on a vast trove of tax data concerning thousands of the wealthiest American taxpayers and covering more than 15 years. ProPublica conducted an unprecedented analysis that compared the ultra-wealthy's taxes to the growth in their fortunes, calculating that the 25 richest Americans pay a "true tax rate" of just 3.4 percent.

The wealthy pay so little in taxes primarily because they keep their incomes low, the article explained, often borrowing against their fortunes to fund their lifestyles. Amazon's Jeff Bezos, Tesla's Elon Musk, Bloomberg L.P.'s Michael Bloomberg and other billionaires have each paid no federal income taxes in one or more recent years. The tax avoidance techniques described in "The Secret IRS Files: Trove of Never-Before-Seen Records Reveal How the Wealthiest Avoid Taxes" are legal, and routine among the ultrawealthy.

In a subsequent article, ProPublica highlighted how some rich people, such as Peter Thiel, have been able to use Roth individual retirement accounts, intended as vehicles to bolster middle-class savings, to create vast untaxed fortunes. A third article showed how billionaires use a provision in the tax code to reduce their taxes after buying sports teams.

Banks and financial institutions are lending more to the rich than ever, according to a story in The Wall Street Journal last week. The senators called for an investigation of banks and wealth management firms to understand the techniques, strategies and products offered to the wealthy that enable them to avoid paying taxes. Morgan Stanley's wealth management clients have $68 billion worth of loans backed by securities and other investments, more than double the amount they had five years ago, and Bank of America has loans worth over $62 billion, the Journal reported.

In March, Warren introduced a bill, co-sponsored by Whitehouse, that would create a tax on the wealth of the richest Americans. Most Republicans and some Democrats oppose such a measure.

Update, July 14, 2021: In a statement, Wyden said that he agreed with the points raised by Warren and Whitehouse. "The country's wealthiest — who profited immensely during the pandemic — have not been paying their fair share," he said. "I've been working on a proposal to fix this broken system since 2019 and continue to work to get the bill ready for release. I'm also going to work with my colleagues on other ways the committee can tackle this issue."