One sign that Congress may actually take up tax reform this year is the nervous and aggressive lobbying effort by many corporations and industries to protect their favorite loopholes.
For instance, the U.S. Chamber of Commerce on Tuesday demanded that any rewrite of the tax code protect breaks for capital investments. Other special interests including the pharmaceutical, technology and energy industries have urged the House Ways and Means Committee to preserve tax breaks that allow some corporations to pay 10-to-15 percentage points less than the current corporate tax rate of 35 percent.
“They’re all excited that we’re looking at this opportunity, but they’re also nervous about what we might do,” Ways and Means subcommittee chairman Rep. Pat Tiberi (R-Ohio), told Politico. “There are companies today that have an effective rate in the single digits who wouldn’t like the fact that we’re going to take away credits and deductions to make [the tax code] simpler — because … they might be paying … more than they do today.” - Read more at Politico
See the effective tax rates of 17 companies pressuring Congress to cut corporate tax rates here
HAGEL ACCEPTS PAY CUT IN FURLOUGH SOLIDARITY Defense Secretary Chuck Hagel will forfeit a portion of his pay alongside the thousands of DOD civilian workers facing unpaid furlough days, the Pentagon said Tuesday. Defense workers will be furloughed for 14 days beginning in mid-June. The Pentagon did not specify how large of a pay reduction Hagel would take. Deputy Defense Secretary Ashton Carter also said back in February he will take a voluntary pay cut of up to 20 percent of his salary, though it’s unclear whether that has happened yet. - Read the statement here
FEW SENATORS SACRIFICE PAY On Capitol Hill, though, only a handful of senators are planning to take a voluntary pay cut and send a portion of their salaries to charity or the Treasury amid sequestration, The Hill reports. Last month, the Senate passed a nonbinding measure urging members to forgo 20 percent of their salaries under sequestration, since lawmaker salaries are exempt from cuts. But after surveying Senate offices, The Hill found that only Sens. Lindsay Graham, R-S.C., Mark Begich, D-Ark., Mike Lee, R-Utah, and and Jay Rockefeller, D-W.Va., have vowed to give up $34,000 of their annual take home pay of $174,000. It probably was easier for a Rockefeller to take a pay hike than many of the others. - Read more at The Hill
See the case for giving members of Congress a raise here
FEDERAL WORKERS MISLED? A new audit out today by the Government Accountability Office shows money management firms frequently give workers misleading information about how to handle retirement savings when they switch jobs. Those firms benefit from larger management fees when workers follow that information, the GAO found. In many cases, firms advised their clients to roll their accounts into individual retirement accounts (IRAs) run by the same firms that already manage their retirement money, when it would be best for the employees to keep their money in a 401(k). - Read the report here
FOOD STAMP DEMAND STILL GROWING DESPITE RECOVERY Demand for food stamps has increased by nearly 70 percent since 2008, with 47.8 million Americans relying on the program, despite an improving economy. The Fiscal Times’ Eric Pianin writes that “This extraordinary mounting demand for food stamps amid unmistakable signs of recovery underscores the schizophrenic nature of the U.S. economy today.” - Read more at The Fiscal Times
Follow us on Twitter at @DebtandTaxes and Brianna Ehley at @briannaehley See More Debt and Taxes here
