ICYMI: At Hearing, Warren Slams Republican Hypocrisy in Pushing for Corporate Handouts While Fighting to Gut Child Tax Credit Expansion
“Republicans are outraged about modest help for our most vulnerable children. At the same time, they are shamelessly fighting for billions of dollars in retroactive tax breaks for a handful of giant corporations. I believe that is wrong and we should not let it happen.”
Washington, D.C. – At a hearing of the U.S. Senate Committee on Finance, U.S. Senator Elizabeth Warren (D-Mass.) questioned Anna Fendley, Director of Regulatory and State Policy for the United Steelworkers, about the effectiveness of enacting billions in retroactive tax cuts to giant corporations for investments made years ago.
Senator Warren highlighted that if Republicans get their way, just two giant tech companies – Microsoft and Meta – would receive $13 billion in retroactive tax breaks for investments made in 2022 alone, more than our country spends in the entire year on all federal child care funding. Senator Warren also pointed out that at the same time Republicans push for billions in retroactive tax breaks for just a handful of giant corporations, they are also fighting to gut a modest expansion of the Child Tax Credit (CTC), which would ensure that CTC benefits do not drop when a family has a temporary drop in income.
Transcript: American Made: Growing U.S. Manufacturing Through the Tax Code
U.S. Senate Committee on Finance
March 12, 2024
Senator Elizabeth Warren: Under President Biden, the economy has added 80,000 manufacturing jobs, partly because of tax incentives for semiconductor and clean energy manufacturing. But some tax breaks don’t actually incentivize job creation – they are just corporate handouts. Right now Congress is considering a bipartisan tax package that includes two big pieces. Number one, tax breaks for giant corporations championed by Republicans. Number two, a boost to the child tax credit to help the poorest families buy diapers and school shoes, which Democrats are fighting for.
Let's take one of the corporate tax breaks that Republicans are demanding. A more generous deduction for research and experimentation, or R&E. This break goes mainly to the largest corporations, subsidizing investments they would make anyway. And here’s the kicker – Republicans want to make this break retroactive, subsidizing decisions that giant corporations made years ago.
Ms. Fendley, you represent the United Steelworkers who know a thing or two about American manufacturing. Is there any evidence that giving giant operations billions in retroactive tax breaks for investments made years ago will somehow incentivize investment and create jobs?
Anna Fendley, Director of Regulatory and State Policy, United Steelworkers: I am not aware of any.
Senator Warren: Well, they don't have a time machine so it’s pretty hard to figure out how this could change things. Let's take a look at how these tax giveaways – who are really being benefited here. Ms. Fendley, which companies would be the largest benefactors of this tax break and how much would they receive for the R&E investments they made back in 2022?
Ms. Fendley: My understanding is the tech industry would largely be the benefactors in the order of billions of dollars. I do want to underscore for manufacturers the importance of some of these business credits. The innovation that -- of the steel industry has been able to do to make lighter, stronger more formable steel has been helpful to people. But that is separate I think from what you're talking about.
Senator Warren: Well, what I’m talking about is I look at the numbers and it is two companies would receive $13 billion – that’s billion with a B – in terms of a tax break here in one year. And that is more than we spend in the entire year on all federal child care funding for the entire country. At the same time that Republicans push for retroactive corporate handouts, some are fighting against a modest expansion of the CTC, called the lookback.
That would ensure when a working family has a temporary drop in income, their CTC benefit does not also drop at the same time. Ms. Fendley, let me ask you about this. Could this happen to a steelworker, that they or their spouse could lose her job or have to cut back on hours? The ultimate question is, should a family get less help when their income has gone down, which is what this proposal would do?
Ms. Fendley: The short answer is no. When a family is going through a hard time, maybe the hardest time, they should not get less help. I think for our union, getting it right on the child tax credit is incredibly important. We strongly urge the Senate to do its work here.
Senator Warren: I appreciate that and I agree with you, we do need to do our work. I think we need to be clear about what is going on here. Republicans are outraged about modest help for our most vulnerable children. At the same time, they are shamelessly fighting for billions of dollars in retroactive tax breaks for a handful of giant corporations. I believe that is wrong and we should not let it happen.
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