Democrats Urge Opposition to Further Corporate Tax Relief

July 2, 2020

The Honorable Nancy Pelosi
Speaker
U.S. House of Representatives
Washington, DC 20515

The Honorable Kevin McCarthy
Republican Leader
U.S. House of Representatives
Washington, DC 20515

The Honorable Mitch McConnell
Majority Leader
U.S. Senate
Washington, DC 20510

The Honorable Charles Schumer
Democratic Leader
U.S. Senate
Washington, DC 20510

Dear Speaker Pelosi, Leader McCarthy, Leader McConnell, and Leader Schumer:

Thank you for your leadership as we work together to deliver more assistance to struggling families across the country. In addition to presenting immediate hardships, the COVID-19 pandemic has laid bare and magnified the economic inequality that existed long before the crisis. As we consider additional relief, we urge you to reject corporate tax breaks that would widen the income gap and reward wealthy shareholders instead of workers.

The Congressional Budget Office (CBO) found recently that aid to state and local governments and increased Medicare spending are far more effective at stimulating the economy than more business tax breaks. Mark Zandi, the chief economist for Moody's Analytics similarly found that such tax breaks cost many times more than the economic activity they generate.

While small businesses and laid-off workers are struggling, the stock market is soaring, ensuring that large corporations continue to have access to capital. Those that require additional liquidity can seek assistance from the $500 billion Federal Reserve fund, which remains largely untouched. In addition, the 2017 Trump tax law already provided an enormous corporate windfall, and additional changes to tax policy have accrued favorably to corporate tax liability. While low-income workers anxiously awaited $1,200 stimulus checks, one of the tax breaks included in the CARES Act delivered an average of $1.6 million to just 43,000 taxpayers earning more than a million dollars in annual income.

Despite such generous handouts, large corporations are seeking a second helping. While Republicans continue to stand in the way of expanding refundable tax credits for working families like the Earned Income Tax Credit and Child Tax Credit, they stand ready to award refundable tax credits to large corporations. Part of why large businesses seek refundability or what they call monetizing their tax credits is because so many corporations have little or no tax liability following the historic deficit-financed giveaways they received under the Trump tax law.

In addition to pushing corporate handouts in the form of tax credits, President Trump's economic advisor Larry Kudlow proposed slashing the already record-low corporate tax rate in half for companies that bring jobs home. Unfortunately, the Trump tax law already allows companies to pay half the U.S. rate on offshore investments and in some cases even zero. No tax break, however well targeted can beat the zero rate current loopholes already allow. Multinationals with armies of tax lawyers would be able to game such provisions to reap further windfalls.

We urge you to oppose such corporate tax breaks, which have little to do with pandemic relief and much to do with temporarily boosting the stock market and benefiting the wealthiest among us. Whether in the form of tax breaks, loans, or other federal support, any assistance to corporations must at the very least come with adequate guardrails to ensure workers benefit instead of executives and shareholders. However, our focus must be on advancing more efficient relief measures that put assistance directly into the hands of the families that need it most.

Sincerely,

Lloyd Doggett
Member of Congress

Sherrod Brown
U.S. Senator

Rosa L. DeLauro
Member of Congress

Sheldon Whitehouse
U.S. Senator

Steven Cohen
Member of Congress

Jan Schakowsky
Edward J. Markey

Jesús G. “Chuy” García
Member of Congress

Tammy Baldwin
United States Senator

Eleanor Holmes Norton
Member of Congress

Jeffrey A. Merkley
United States Senator

Peter DeFazio
Member of Congress

Elizabeth Warren
United States Senator

Chellie Pingree
Member of Congress

Cory A. Booker
United States Senator

Mark DeSaulnier
Member of Congress

Chris Van Hollen
United States Senator

Raúl M. Grijalva
Member of Congress

Richard Blumenthal
United States Senator

Paul D. Tonko
Member of Congress

Kamala D. Harris
United States Senator

Barbara Lee
Member of Congress

Bernard Sanders
United States Senator

Mark Pocan
Member of Congress

Mazie K. Hirono
United States Senator

Adam Smith
Member of Congress

Tom Udall
United States Senator

Ayanna Pressley
Member of Congress

Tammy Duckworth
United States Senator

Adriano Espaillat
Member of Congress

Brian Schatz
United States Senator

Jerrold Nadler
Member of Congress

Tina Smith
United States Senator

Alan Lowenthal
Member of Congress

Jack Reed
United States Senator

Bennie G. Thompson
Member of Congress

Robert P. Casey, Jr.
United States Senator

Mary Gay Scanlon
Member of Congress

Amy Klobuchar
United States Senator

Ilhan Omar
Member of Congress

Kirsten E. Gillibrand
United States Senator

Brenda L. Lawrence
Member of Congress

Martin Heinrich
United States Senator

James P. McGovern
Member of Congress

Patrick Leahy
United States Senator

Bonnie Watson Coleman
Member of Congress

Richard J. Durbin
United States Senator

Darren Soto
Member of Congress

Tim Kaine
United States Senator

Julia Brownley
Member of Congress

Christopher S. Murphy
United States Senator

Alexandria Ocasio-Cortez
Member of Congress

Bobby L. Rush
United States Senator

Jahana Hayes
Member of Congress

Nydia M. Velázquez
Member of Congress

Mark Takano
Member of Congress

Ro Khanna
Member of Congress

Jamie Raskin
Member of Congress

Joseph P. Kennedy
Member of Congress

André Carson
Member of Congress

José E. Serrano
Member of Congress

Dwight Evans
Member of Congress

Peter Welch
Member of Congress

Andy Levin
Member of Congress

Brendan F. Boyle
Member of Congress

John Yarmuth
Member of Congress

David N. Cicilline
Member of Congress

Henry C. “Hank” Johnson, Jr.
Member of Congress

Judy Chu
Member of Congress

Deb Haaland
Member of Congress

Diana DeGette
Member of Congress

Pramila Jayapal
Member of Congress

Grace F. Napolitano
Member of Congress

Katherine Clark
Member of Congress

Danny K. Davis
Member of Congress

Jared Huffman
Member of Congress

Mike Doyle
Member of Congress

Alcee L. Hastings
Member of Congress

Carolyn B. Maloney
Member of Congress

Eddie Bernice Johnson
Member of Congress

Jimmy Gomez
Member of Congress

Daniel T. Kildee
Member of Congress

Marcia L. Fudge
Member of Congress

Marcy Kaptur
Member of Congress

Cindy Axne
Member of Congress

Anthony Brown
Member of Congress

Stephen Lynch
Member of Congress

John Garamendi
Member of Congress

Tim Ryan
Member of Congress

Jerry McNerney
Member of Congress

Debbie Wasserman Schultz
Member of Congress

Grace Meng
Member of Congress

Joyce Beatty
Member of Congress

Gwen Moore
Member of Congress

Ted Deutch
Member of Congress

Anna G. Eshoo
Member of Congress

Ann Kirkpatrick
Member of Congress

Rick Larsen
Member of Congress

Suzanne Bonamici
Member of Congress

Joe Courtney
Member of Congress

Yvette D. Clarke
Member of Congress

Veronica Escobar
Member of Congress

Joaquin Castro
Member of Congress

John Sarbanes
Member of Congress

Katie Porter
Member of Congress

Rashida Tlaib
Member of Congress

Ben Ray Luján
Member of Congress

Ruben Gallego
Member of Congress