This post was co-authored by Emily Peterson-Cassin.
It’s been less than a year since President Trump’s tax giveaway package handed a massive bag of money to the wealthy and corporations at the expense of the rest of us. As if that wasn’t bad enough, almost as soon as the cuts were passed, the President and his friends began talking about how their giveaway didn’t go far enough.
Fast forward to now– and conservatives in the U.S. House of Representatives are poised to do it again. They plan to move ahead with a second round of tax handouts even though the first GOP tax giveaway was a decided flop – where corporate shareholders and the mega wealthy received a windfall and working families got fleeced.
The first round of tax cuts legislation enacted in December 2017, the Tax Cuts and Jobs Act, will add nearly $2 trillion to our nation’s deficit that will be end up being paid for by cuts to critical services like Medicare, Medicaid, education, nutrition assistance and other programs Americans depend on. The legislation sharply reduced the tax rate paid by corporations and paved the way for increased outsourcing of jobs and investment by multinational companies using accounting gimmicks to escape contributing their fair share of taxes.
As expected, the GOP’s “trickle down” promises for working Americans did not pan out—with more than 101 times as much money going toward enriching shareholders as compared to increasing employees’ wages or bonuses. The public rightfully saw through the sham, and last year’s tax changes remain unpopular with voters across the country. Nonetheless, that hasn’t stopped the GOP from trying to double down on the tax giveaways to the wealthy.
The proposed sequel to the Tax Cuts and Jobs Act has been dubbed “Tax Cuts 2.0.” Because the first round of tax cuts prioritized slashing the taxes corporations pay, it made those cuts permanent. However, the giveaways aimed at very wealthy taxpayers were set to expire after 10 years. The main component of the tax cuts round 2.0 package is a bill to make permanent the individual changes that help the richest among us.
Make no mistake, though it included some minor provisions aimed at working families, the temporary cuts for individual tax filers included in last year’s tax legislation were intended to benefit the very wealthy. For example, the top tax rate that the highest earners pay was reduced from 39.6 percent down to 37 percent. And, the law shielded estates valued up to $11 million dollars (or twice that for couples) from having to pay estate tax when previously the exemption levels were half as expansive. (It should be noted that even the former limits were far too weak to prevent gross accumulations of wealth by a small number of families.) Moreover, the original tax cut law’s “Trump Loophole” deduction for LLCs and partnerships–the way that the president has organized his hundreds of companies–has been shown to mainly provide benefits to millionaires.
As is typically the case with Hollywood blockbusters, this sequel to first tax giveaway performance is irredeemably terrible. Tax cuts 2.0 has a jaw-dropping price tag of $2.8 trillion, nearly 50 percent more than the original tax cuts legislation. This bleeding of government revenues through massive tax cuts for the wealthy and corporations will further exacerbate the upcoming cuts to public services like health care and education, while locking in inequities that further rig our economic system to benefit CEOs and other wealthy individuals.
Unfortunately, tax cuts 2.0 was passed last week by the U.S. House Ways & Means Committee, and Speaker of the House Paul Ryan has vowed to bring a vote on the proposal before the end of September. (As a last minute incentive to wealthy mid-term campaign donors.) However, even if that happens, the proposal is likely dead on arrival in the Senate, as Senators fear another vote against the interests of their non-billionaire constituents.
Spoiler alert: If eventually passed, the tax cut sequel will widen gulf between the rich and the poor, and lead to unconscionable cuts to Medicare, Medicaid, public education and more. So, now is the perfect time to call your U.S. Representative to tell her or him to oppose tax cuts 2.0. And, if you are on social media, you can follow the hashtag #TaxScam2 to join a Twitter storm on Friday, September 21 at noon ET and add your voice to the collective call to oppose more tax cuts for the rich.