Neither rain nor wind nor snow will slow corporate tax breaks

January 19, 2024

202-494-4620

Washington—During a snowstorm after most of Congress had already departed, the House Ways & Means Committee today delivered more corporate tax breaks with the adoption of H.R. 7024, advancing the interests of corporate lobbyists over the needs of children. U.S. Representative Lloyd Doggett (D-Texas) slammed the proposal for failing to sufficiently improve the Child Tax Credit and lift millions of struggling families out of poverty and questioned the value of the corporate provisions.

“Compromise is great, but here it’s the kids that are having to do all of the compromising,” said Rep. Doggett, who expressed concern that the bill lifts less than 10% of children out of poverty while corporations have 100% of their demands fulfilled. “It’s far from the proclaimed 50/50 split, which according to the Chairman’s own words, would give four times as much to corporations than children. Once again, the Committee makes its priority clear, and it’s certainly not children.”

To watch Rep. Doggett’s remarks, click here.

Rep. Doggett’s remarks, as delivered, are below:

“The short-lived child tax credit, enacted in 2021, was a landmark accomplishment in reducing child poverty. For the first time, disadvantaged families could receive their tax credit monthly to use for groceries, child and health care, and getting to work. And it was fully refundable—available to the very poorest families in America. Republicans blocked the renewal and said we just couldn’t afford to lift that many poor children out of poverty. But they can never give up on lifting corporations out of paying a reasonable tax rate.

“In announcing this tax deal, Chairman Smith correctly and candidly declares that the bill locks in over $600 billion in extended business tax breaks. Enacting these provisions incrementally does two things. This is from the Committee for a Responsible Federal Budget, it suggests that maybe the Chairman overestimated things a little, but I accept his number; they say $525 billion is the permanent cost for these tax breaks. And the permanent cost of the child tax credit is $80 billion. Doing it incrementally, while you intend for it to be permanent, ensures you never really show the true cost to the debt for unpaid tax breaks.

“And it assures that you create the misimpression that children are being treated the same way as corporations, when in fact, under the Chairman’s numbers, children get $1 for every $4 for corporations. This is not a 50/50 split between children and corporate power. Once again, this Committee makes its priority clear, and it’s certainly not children.

“Given how little assistance poor Americans have usually received from this Committee, I respect the advocates who are ready to take whatever they can get. The expanded child credit in 2021 lifted over 5 million children out of poverty. And this bill, it'll lift 8% of them out of poverty. Compromise is good. But compromising children is not, as our colleague Rosa DeLauro—who has steadfastly fought and authored this child tax credit for over a decade—declared it ‘lacks equity.’ It’s ‘keeping millions of children in preventable poverty…providing a massive tax cut to big corporations without offering middle- and working-class families true economic security.’

“And who are the corporate beneficiaries? A host of big names who paid an average effective tax rate under 8%. These are the companies benefiting the most from our national security and doing the least to pay for it. Let’s take two examples: under today’s bill, taxes for Nike, which had an effective tax rate of 10% on profits of $4.5 billion in 2022, will be retroactively lowered by $195 million to an effective tax rate of 5%. No wonder they say, ‘Just Do It.’ How about doing it, just a little more for the children instead of for a company that is soaring to do just a little less? And how about Netflix? On its 2022 profits of $4.5 billion, it paid an effective tax rate of a mere 2%. Today, this Committee will grant a tax refund of about $220 million. The result is a tax rate of negative 5%.

“Meanwhile, the Tax Foundation reports that a single mom who is struggling to get by and provide for her children, who earns an average wage, pays an effective tax rate of 20%. So today this Committee approves sending $220 million to a corporation paying a 2% rate and little or nothing to that mom—some kind of Netflix series that makes.

“And while some of these corporate provisions may have merit, even the Wall Street Journal calls this ‘a retroactive sop to companies that already made investment decisions.’ The Committee for a Responsible Federal Budget, chaired by Mitch Daniels and Leon Panetta—not exactly a hotbed of liberalism—likewise concludes that this bill ‘irresponsibly offers retroactive windfalls that will do nothing to help the economy….Unless the objective is pure corporate giveaways, the retroactive provisions should be dropped….’

The retroactive provisions should be dropped.

Yes, this bill is bipartisan—just like our overall broken tax code that overflows with loopholes and special advantages to the powerful on a bipartisan basis. That doesn’t make it right. This deal only continues slamming the tax code against working families, justifying their public skepticism about whose side we are on. I believe we have a duty to fight for working families to reform this bipartisan tax code. Today’s bill takes us in the opposite direction.

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