25 Senators Dodging Tax Reform


Do they like tax write-offs for corporate wrongdoing?*

breaking_news_3-150x150Most United States senators say they are for tax code reform. Many promise to end loopholes. But when pressed for details regarding real reform or ending outrageous loopholes passed when no one was looking, senators dodge the issue or change the subject.

Update: So far not one of the 25 senators on the Senate Finance Committee I contacted on April 20 will support Senator Leahy’s The No Tax Write-Off For Corporate Wrongdoing Act (which I call NOTWA). NOTWA is stalled in that committee. Is Leahy the only senator who objects to corporate wrongdoing treated as a tax deductible “business expense”?

When corporate wrongdoing punishment includes fines for “punitive damages,” they turn out to be tax breaks for wrongdoers. Take British Petroleum’s careless pollution of the Louisiana shoreline, Standard & Poor’s deception about mortgage ratings and Hyundai’s secrecy about steering failures: The tax code is rigged to allow “punitive damages” as deductible “business expenses” on each corporation’s income taxes. Altogether the “punitive damages” saved them hundreds of millions in taxes not paid—and their savings also raised our deficit. Now that is exactly what Senator Leahy’s NOTWA is trying to end.

Possible explanations for why the 25 U.S. senators on the Finance Committee avoid support of the Leahy proposal:

1-Changing the tax code is a good issue if no specifics are involved.

2-NOTWA is a conflict of interest: corporate leaders could be campaign contributors.

3-Few consumers know punitive damages are tax deductible.

4-Fining corporations can cost jobs. (This is the all-purpose subject-changer answer. So far no senator has used this.)

Consumerist Assignment. Let your two US senators know you know about the deductibility of punitive damages and want them to support the Leahy bill. Use U.S. Senate- Senators of#875F20 to get their emails or phone numbers. Let me know if they answer you. (Many senators only answer their own constituents.)

Stay Tuned: There are 75 other senators yet to be contacted. And the presidential sweepstakes are starting up. The countless Republicans and few Democrats who want to be our next President have not mentioned the Leahy bill. Consumerists ought to ask them about NOTWA.

*Have a look at my February 8th post inspired by the excellent article in The New York Times by Patricia Cohen on punitive damages.

 

 

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