Tax package absurdity has corporate tax deserters vs. working parents

It wasn’t until I got to the end of The New York Times summary of the tax package being negotiated in Congress that I stopped short in amazement. Up until then, the article was describing the kind of trade-off to be expected given the dynamics in Congress today: Republicans pushing for corporate tax breaks while Democrats weighing in for tax credits for working families.

{mosads}But even business-as-usual can be taken to absurd heights. The Times reported that Republicans were willing to phase out “two provisions that benefit foreign corporations and American multinational corporations” if Democrats gave up “indexing the child tax credit so it increases in value with inflation.”

In what universe, or more appropriately, in what part of America can this trade-off be proposed with a straight face? There’s only one place in America: the halls of Congress.

Outside of K Street and the Capitol, there’s not a shred of doubt how the American people would view this dance. The public — and why do I need to even cite polls for this? — overwhelmingly (79 percent to 17 percent) wants to “[c]lose tax loopholes to ensure that American corporations pay as much on foreign profits as they do on profits made in the United States.” For that matter, more than two-thirds (65 percent) of the public think big corporations pay too little in taxes, while only 9 percent think they pay too much.

By similar lopsided margins, there are high levels of support from voters for expanding tax credits to assist in caring for family members (78 percent) and for making quality and affordable childcare options available nationally (75 percent).

Behind these poll results is a public understanding that there is no moral equivalency to tax breaks for profits that corporations make overseas and families affording childcare. Corporations use the tax loopholes to lower and avoid paying taxes on profits they make in other countries, even though the basis of those profits are their entire American corporate structure. The corporations are shirking their responsibility to support American communities and the infrastructure that enabled those corporations to profit in the first place.

Working parents, on the other hand, are showing enormous responsibility caring for their children and striving to provide them a better future. The maximum tax childcare tax credit a family can get to help them pay for thousands of dollars in childcare is $1,000 per child. Indexing that to inflation is the least we can do to help more than 6 million American families care for their kids.

For those of you who shrug off morality and say “look at the economics,” there’s no comparison there, either. Expenses spent by American corporations in other countries, and taxes paid overseas, may fuel other economies, but not our economy back home. On the other hand, every dollar spent on the childcare tax credit adds $1.38 to our gross domestic product, as the money goes to local childcare providers.

Throughout this week, Congress and an army of corporate lobbyists will tussle about making permanent corporate tax breaks and tax credits for work and childcare for working families. The package that appears to be on the table already seems ridiculously lopsided, with corporate favors trumping working families by better than two to one over the next 10 years. Working parents who struggle every day to pay for childcare should at least have the comfort of knowing that the assistance they get from the federal government will keep up with inflation. Only in Washington would that be too much to ask.

Kirsch is a senior fellow at The Roosevelt Institute and a senior adviser to USAction. Follow him @_RichardKirsch.