U.S. Sens. Elizabeth Warren (D-MA) and Sheldon Whitehouse (D-RI), members of the Senate Committee on Finance, are requesting an investigation into a report alleging the wealthiest individuals use legal tax loopholes to avoid fair share payment.
Warren and Whitehouse forwarded correspondence to Senate Finance Committee Chairman Ron Wyden (D-OR) regarding a deeper analysis of ProPublica’s June report, which estimated some individuals paid an effective tax rate of 3.5 percent, well below typical rates paid by middle-class wage earners.
“This tax avoidance by the nation’s wealthiest individuals is profoundly unfair,” the legislators wrote. “The Finance Committee has an obligation to investigate these matters, hold hearings and develop legislative policies that address the methods and strategies used by ultra-millionaires and billionaires to avoid paying taxes and its impact on the nation’s finances and ability to pay for investments in infrastructure, health care, the economy, and the environment.”
The lawmakers are also requesting the Finance Committee look into the alleged role the country’s largest financial institutions and wealth management firms have in developing tax avoidance strategies and providing the financial infrastructure.
“Because the majority of tax avoidance loans and other tax avoidance tactics are not disclosed to the IRS, an effective investigation of these tactics must involve the institutions that aid and abet them,” the lawmakers concluded. “The Committee should open an investigation of the role of these financial institutions in tax avoidance, seeking information on how certain lending activities allow individuals to avoid claiming taxable income and the precise methods used by these institutions to do so.”