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Close Tax Loopholes So Everyone Pays Their Fair Share Updated September 10, 2013 Close tax loopholes to ensure that everyone pays their fair share. Congress must stop the irrational, arbitrary, and harmful budget cuts. Working families have already paid by taking $1.8 trillion in spending cuts since 2011; by comparison, we have only raised revenue by $600 billion.1 And all of the tax increases have come from individuals; corporations have contributed nothing to the effort.2 Any additional deficit reduction should be done by closing wasteful tax loopholes that benefit the top 2% and wealthy corporations, not by further cutting federal programs that are crucial for children and working families. Meanwhile, the deficit continues to drop dramatically with the improving economy—it fell by 38% in 2013—so the rationale for more spending cuts makes less and less sense.3 One way to solve our budget woes is to pass immigration reform because doing so will grow our economy and reduce the budget deficit. The Congressional Budget Office (CBO) found that enacting the Senate immigration reform bill will reduce the federal budget deficit by nearly $850 billion over the next 20 years and increase economic growth by 5.4%.4 In addition, the Social Security Trust Fund would see increased revenues of $300 billion over the next decade.5 Sequestration Budget Cuts Versus Tax Loopholes Federal Budget Items

Importance to Latinos

Federal Budget Cut in 2013 Due to Sequestration6

Head Start

37% of all Head Start preschoolers are Latino7

$400 million

Child Care Development Block Grant

20% of children who receive a child care subsidy are Latino9

$115 million

WIC (Women, Infants, and Children) Nutrition Assistance

42% of WIC participants— low-income pregnant women, infants, and children—are Latino11

Title I Education (Funding for Low-Income Schools)

42% of Latino elementary school children attend highpoverty schools14

$789 million

Job Training

32% of all youth enrolled in federal job training programs are Latino16

$168 million (youth and adult job training)

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$133 million

Value of Tax Loophole per Year

Tax loophole for corporate private jet depreciation8 = $370 million Tax loophole for distilled alcohol with flavor and wine additives10 = $110 million Estate tax loophole allowing heirs to lowball gifts for income tax purposes13 = $155 million Tax loophole for hedge fund managers to pay a lower tax rate15 = $1.7 billion Tax loophole for derivatives traders to pay a lower tax rate17 = $300 million


Rental Assistance

Social Security

Affordable Care Act (ACA)

15% of people receiving federal rental subsidies are Latino18

$938 million

$286 million 53% of Latino seniors rely (cuts to on Social Security for almost administration, all of their income20 not benefits) $44 million 6 million Latinos gain access (ACA exchange 22 to care due to ACA grants)

Mortgage interest deduction for vacation homes and yachts19 = $1.5 billion Tax loophole for high-wealth savings in IRAs designed for middle class21 = $388 million Tax loophole for domestic coal production23 = $49 million

Our long-term budget plan should grow the economy, invest in the future, protect vulnerable people, and reduce the deficit by raising revenue and closing tax loopholes that benefit the top 2% and wealthy corporations. Notes 1

U.S. Senate Budget Committee, Foundation for Growth: Restoring the Promise of American Opportunity (Washington, DC: Senate Budget Committee, March 2013), 2, http://www.budget.senate.gov/democratic/index.cfm/files/serve?File_id=ee2613d9-cf20-402c-8a65-e1b670b21fa0 (accessed September 2013). 2 William Rice et al., High Price of Tax Loopholes (Washington, DC: Americans for Tax Fairness and National Women’s Law Center, 2013), http://www.americansfortaxfairness.org/files/The-High-Price-of-Tax-Loopholes.pdf (accessed September 2013). 3 Congressional Budget Office, Monthly Budget Review for July 2013, Washington, DC, Government Printing Office, 2013, http://www.cbo.gov/publication/44495 (accessed September 2013). 4 Executive Office of the President, The Economic Benefits of Fixing Our Broken Immigration System, Government Printing Office, Washington, DC, 2013, http://www.whitehouse.gov/sites/default/files/docs/report.pdf (accessed September 2013). 5 Letter from Stephen Goss, Chief Actuary, Social Security Administration, to Senator Marco Rubio, May 8, 2013, http://www.rubio.senate.gov/public/?a=Files.Serve&File_id=a50b5f91-a3b3-47bc-ac02-f5bf1f4f4abb (accessed September 2013). 6 Unless otherwise specified, all data in this column are from the Executive Office of the President of the United States, OMB Report Pursuant to the Sequestration Transparency Act of 2012 (P. L. 112–155), Government Printing Office, March 1, 2013, http://www.whitehouse.gov/sites/default/files/omb/assets/legislative_reports/stareport.pdf (accessed September 2013). 7 L. K. Hulsey et al., Head Start Children, Families, and Programs: Present and Past Data from FACES (Washington, DC: U.S. Department of Health and Human Services, 2011), http://eclkc.ohs.acf.hhs.gov/hslc/mr/opre/present_past.pdf (accessed August 2012). 8 William Rice et. al., High Price of Tax Loopholes (Washington DC: Americans for Tax Fairness and National Women’s Law Center, 2013), 2, http://www.americansfortaxfairness.org/files/The-High-Price-of-TaxLoopholes.pdf (accessed September 2013). Numbers annualized by NCLR. 9 Hannah Matthews and Emily Firgens, “Child Care and Development Block Grant Participation in 2010” (Washington, DC: Center for Law and Social Policy, April 2012), http://www.clasp.org/admin/site/publications/files/ccdbg-10-participation_final.pdf (accessed August 2013). 10 Joint Committee on Taxation, “Estimated Budget Effects of the Revenue Provisions Contained in the President’s Fiscal Year 2014 Budget Proposal” (Washington, DC: May 2013), 4, Part VIII, A, https://www.jct.gov/publications.html?func=startdown&id=4520 (accessed September 2013). 11 National Council of La Raza, Profiles of Latino Health: A Closer Look at Latino Child Nutrition (Washington, DC: National Council of La Raza, 2010), http://www.nclr.org/images/uploads/pages/Jan12_Profiles_Issue_9.pdf (accessed September 2013). 12 Rev. Douglas A. Greenaway, “WIC FY 2013 Funding Update” (presentation, National WIC Association, Washington, DC, April 2, 2013), 6, http://www.paramountcommunication.com/nwica/Funding_Update_April_2_2013.pdf (accessed September 2013). 13 Joint Committee on Taxation, “Estimated Budget Effects of the Revenue Provisions,” 6, Part XII, B. 14 National Center for Education Statistics, The Condition of Education 2010 Spotlight High-Poverty Public Schools (Washington, DC: U.S. Department of Education, May 2010), http://nces.ed.gov/programs/coe/analysis/2010section1c1.asp (accessed September 2013).


15

Joint Committee on Taxation, “Estimated Budget Effects of the Revenue Provisions,” 7, part XV, I. Employment and Training Administration, Workforce Investment Act Performance Highlights, Program Years 2006-2008 (Washington, DC: U.S. Department of Labor, 2010), http://www.doleta.gov/performance/results/pdf/WIA_Exiter_Snapshots_PY2006_2008_WEB_Version_1227010.pd f (accessed September 2013). 17 NCLR calculation based on Americans for Tax Fairness, Next Steps Toward Tax Fairness: Options for Closing Loopholes for the Richest 2% and Big Corporations (Washington DC: Americans for Tax Fairness, 2013), 2, http://www.chn.org/wp-content/uploads/2013/02/ATFNextStepsFinal2-15-13.pdf (accessed September 2013). 18 U.S. Department of Housing and Urban Development, A Picture of Subsidized Households, HUD USER Database, http://www.huduser.org/portal/datasets/picture/yearlydata.html (accessed September 2013). 19 NCLR calculation based on Americans for Tax Fairness, Next Steps Toward Tax Fairness, 2. 20 Social Security Administration, “Income of the Population 55 or Older, 2010,” Table 9.A1 and A3, http://www.ssa.gov/policy/docs/statcomps/income_pop55 (accessed September 2013). 21 William Rice et al., High Price of Tax Loopholes, 2. 22 National Council of La Raza, A Profile of Latino Health Insurance Gains Under the Affordable Care Act (Washington DC: National Council of La Raza, 2011), http://www.nclr.org/images/uploads/publications/profilelatinoinsurancegains.pdf (accessed September 2013). 23 Joint Committee on Taxation, “Estimated Budget Effects of the Revenue Provisions” 4, Part VII, B. 16


Close Tax Loopholes So Everyone Pays Their Fair Share  

Our long term budget plan should grow the economy, invest in the future, protect vulnerable people, and reduce the deficit by raising revenu...

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