AFL-CIO: Tax reform should increase taxes for wealthy

The AFL-CIO on Monday pressed its tax reform priorities, pushing back against concepts likely to be included in a Republican bill.

The labor organization, which endorsed Democratic nominee Hillary Clinton during the presidential campaign, detailed its framework for tax reform in a memo to reporters ahead of Tuesday’s tax-filing deadline. The framework makes the case for tax reform that results in high earners and corporations paying their “fair share” of taxes.

President Trump and congressional Republicans have said they want to pass tax reform legislation this year. In the House, GOP lawmakers are working on legislation based on a blueprint that proposes lowering the top individual and corporate tax rates.

The AFL-CIO argued that large corporations and wealthy individuals should not see their taxes cut — and instead should see them increase.

{mosads}”Big corporations and the wealthy must pay more in taxes than they pay now, so we can build an economy that works for all of us,” the group said.

GOP congressional leaders want tax reform to be revenue neutral, and some Republican lawmakers have said they would be OK with tax cuts that lower federal revenue. But the AFL-CIO thinks tax reform should lead to an increase in federal revenues.

“Tax reform must raise enough additional revenue over the long term to create good jobs and make the public investment we need in education, infrastructure, and meeting the needs of children, families, seniors and communities,” the labor group said.

The AFL-CIO also argued that tax reform should not tax corporations’ offshore profits at lower rates than their domestic earnings.

Under current law, U.S. corporations have to pay U.S. taxes on their income no matter where it is earned, but they can defer paying taxes on foreign earnings until the money is brought back to the U.S.

The House Republican tax plan would move the U.S. to a “territorial” tax system that does not tax U.S. companies’ foreign earnings.

The House GOP blueprint argues that a territorial system would make it easier for American companies to invest their foreign earnings in the U.S. But the AFL-CIO charged that “a ‘territorial’ system that further reduces taxes on offshore profits would increase the tax incentive for global corporations to shift jobs and profits offshore.”

The group also argued that tax revenues from the repatriation of U.S. companies’ foreign earnings that are currently held offshore should be used to pay for infrastructure investments. Some Republicans are open to the idea of linking tax reform and infrastructure, but Senate Majority Leader Mitch McConnell (R-Ky.) said last week that he expects that the two issues will move separately.

The AFL-CIO isn’t the first group to argue that tax reform shouldn’t cut taxes for wealthy individuals and corporations. Last week, the liberal Center for American Progress urged lawmakers to reject any bill that cuts taxes for corporations and wealthy people by even $1.