Tags: corporate | taxes | federal | benefits

Billions in Corporate Taxes Going Uncollected

By    |   Thursday, 05 Dec 2013 10:09 AM

Hundreds of billions of dollars in taxes owed by corporations remain uncollected as members of Congress are seeking to cut federal employee benefits, asserts Dave Johnson, a fellow with Campaign for America's Future, a left-leaning advocacy group.

"Federal employees have endured a pay freeze for three years," Johnson writes on the group's blog. "They were furloughed during the government shutdown, they face ongoing furloughs because of the sequester cuts, and now they are being threatened with cuts in pay and pensions."

House Republicans, as well as President Barack Obama, have proposed requiring federal employees to pay more toward their retirement benefits in an effort to reduce the deficit, Johnson says.

"Of course, the effect of this is to hurt morale of government workers."

At the same time, multinational corporations are holding around $2 trillion overseas to avoid U.S. taxes, taking advantage of a loophole known as deferral, he says. Profits generated overseas are not taxed if corporations don't repatriate the money to the U.S., he explains.

"The taxes due on this money are somewhere upwards of $700 billion. The amount held outside the country grows every year, along with the number of jobs, factories and profit centers companies move to take advantage of this."

Corporate tax breaks will total $108 billion this fiscal year, he says, citing a report from the National Priorities Project. Revenue lost from U.S. corporations deferring taxes on income earned abroad increased from $14 billion to $42 billion.

Tapping that huge pool of money, he argues, would bring in hundreds of billions in revenue in addition to increased investment and money for shareholders, he argues.

House Budget Committee Chairman Paul Ryan (R-Wis.) has proposed increasing the contributions federal workers make to their retirement plans by 5.5 percent of their salaries and eliminating special supplemental payments to some employees retiring before age 62, according to the Washington Post. He estimates the proposal would save $132 billion over 10 years.

President Obama has proposed increasing their retirement contribution by 1.2 percentage points for an estimated $20 billion in savings over 10 years.

Ryan says the proposal would bring the benefits of federal workers more in line with those in the private sector.

"Compensation for federal employees continues to outpace pay for their private-sector counterparts," states Ryan's budget plan. "The non-partisan CBO recently released a study saying that federal workers are, on average, compensated 16 percent higher than comparable private-sector employees."

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Hundreds of billions of dollars in taxes owed by corporations remain uncollected as members of Congress are seeking to cut federal employee benefits, asserts Dave Johnson, a fellow with Campaign for America's Future, a left-leaning advocacy group.
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2013-09-05
Thursday, 05 Dec 2013 10:09 AM
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