Protect Corporate Tax Loopholes or Feed the Hungry?

by Joan Entmacher, Vice President for Family Economic Security
National Women’s Law Center

For most Americans the answer would be obvious, especially when soaring prices are forcing some families to choose between heating their homes or putting food on the table. The answer is also obvious to the Bush Administration – it’s just not the answer most Americans would choose.

Progress on the farm bill, which would increase funding for Food Stamps, emergency feeding programs, and other vital nutrition programs is still stalled, because President Bush has threatened to veto the bill if it “raises taxes.” And, in Bush-land, closing tax loopholes to make corporations pay their fair share of taxes qualifies as a tax increase. 

Last year, as part of the reauthorization of the Farm Bill, both the House and Senate voted to increase Food Stamp benefits, which currently average about $1 per person per meal, and make other important improvements in nutrition programs. The increases were fully paid for by closing corporate tax loopholes. The House bill would prevent foreign corporations which earn profits in the United States from avoiding taxes by sheltering that income offshore. The Senate bill would prevent corporations from avoiding taxes by engaging in sham transactions that have no economic purpose except as a tax shelter. Both tax reforms stand on their own as steps toward tax fairness. It’s an added bonus that the revenue raised by closing these loopholes would directly help feed hungry children (over 50 percent of Food Stamp participants), low-income women (over half of adult participants, mostly single mothers and elderly), and other vulnerable people.

This week, even before the congressional Budget Committees released their budgets, Administration Budget Director Jim Nussle told Congress that the President will veto any attempt to raise taxes, trying to preempt congressional efforts to address urgent needs in a fiscally responsible way. 

When President Bush and his supporters in Congress say that they won’t raise taxes, think about whose tax breaks they are really trying to protect – and who’s paying the price.