Hispanic advocacy group says proposed corporate tax hikes will hurt Latino workers

The Texas based Libre Initiative, a pro-liberty organization focused on Hispanic American interests, raised concerns about an upcoming Congressional tax proposal that the Wall Street Journal is calling “the largest tax increase since 1968.”  

The Journal recently reported that a draft leaked from the U.S. House of Representatives Ways and Means Committee revealed a whopping $2.2 trillion tax increase to support Washington spending programs.

Citing a recent report compiled by the Senate Finance Committee Republican Staff, the Libre Initiative lashed out at a purported 25% burden of the new corporate tax, which it insists will be borne by the labor force in terms if diminished wage growth.

“Some would want to have us believe that the proposed tax hikes Congress is considering would only impact high-income Americans,” Libre Initiative President Daniel Garza said in a Sept. 15 statement. “But the reality is that nothing could be further from the truth. The truth is that there are not enough high-income Americans to cover for the trillions in new federal spending.

“As a result, small businesses – the backbone of our local economies – will be among the most impacted by massive new tax hikes making it even more difficult for them to grow, expand, and hire additional workers at a time when there are millions of Americans – including many Latinos – struggling to make ends meet and find work.”  

Garza’s comments come in the midst of a Sept. 12 study conducted by Just the News that found audits of poorer Americans are declining while they are decreasing for the wealthy with low income wage earners making less than $25,000 now being audited at a rate of five times higher than everyone else in 2021.

Just the News cited a recent May 17 Government Accountability Office (GAO) report, which points out that, “In recent years, IRS audited taxpayers with incomes below $25,000 and those with incomes of $500,000 or more at higher-than-average rates. But, audit rates have dropped for all income levels—with audit rates decreasing the most for taxpayers with incomes of $200,000 or more.”

The report also cites a 2019 ProPublica study based on audits per geography, which found Hispanic American counties in South Texas, Native American reservations South Dakota and Black counties in the Deep South all had some of the highest audit rates.

“The nonpartisan Congressional Budget Office has projected Democrats' proposed boost in IRS funding under the Inflation Reduction Act would increase tax collections by about $200 billion from 2023 to 2031,” Just the News reported.

“Last month, the bipartisan Congressional Joint Committee on Taxation estimated between 78% and 90% of that $200 billion will come from those making less than $200,000 a year. Only 4% to 9% is expected to come from those making more than $500,000, the committee said.”

The IRS has become an embattled agency now at the forefront of the political debate between Democrats and Republicans.

Earlier this month, the IRS accidentally posted confidential, personal information of more than 120,000 American taxpayers on its website when it revealed data from their Form 990-T’s. The debacle was just one of many complaints taxpayers have had as other issues have been of hot media discussion such as complaints the agency is engaging in poor customer service and even paying benefits to deceased persons and prisoners on death row. Some have also complained about potential security risks as IRS agents continue to work from home.

Other recent concerns sparked as a result of the debate surrounding the Inflation Reduction Act are now centering around the recent phenomena in the agency arming its agents with guns and ammunition.

According to recent study by firearms watchdog group Open the Books, the IRS spent $4.5 million arming IRS agents between 2015-2019. The report determined that the IRS purchased 4,600 weapons and 5 million rounds of ammunition during that time frame.

Another potential target of new legislation will be small businesses, according to the Wall Street Journal. According to the Manhattan based financial newspaper, small businesses will be hit with higher individual rates and a new 3.8% surtax while paying more income since the Democratic proposal is nixing a current 20% deduction for qualified business income.

“That deduction was designed to equalize the tax burden for passthrough and Subchapter S companies with corporations,” the Journal writes in a Sept. 13 editorial. “Now it will vanish for individual business owners who make more than $400,000. This will mean less hiring and fewer raises for the employees of these firms.”

“The sum of these corporate taxes would be a greater burden on U.S. firms even than the global minimum tax that the U.S. Treasury is negotiating with developed countries via the Organization for Economic Cooperation and Development. The Europeans and Chinese must be astounded at this display of American economic masochism.”

For Mr. Garza and the Libre Initiative, raising taxes to increase spending isn’t a solution that will help the American people or the Hispanic American population.

“Instead of looking to raise taxes to pay for trillions in new spending, lawmakers should strengthen the safety  for those truly in most need, while enacting pro-growth economic policies that will lead to job growth and prosperity for all,” he said.