It’s Time to Tax the Rich

Congress is currently grappling with a “Kiddie Tax” bill meant to roll back parts of the 2017 tax law that hiked up taxes on the benefits children of fallen military members—tax rates which now resemble those for trusts and estates. This is just the latest in a series of alarming outcomes from the bill GOP lawmakers claimed would benefit all Americans.

Protestors at a Tax March. (Molly Adams)

Eighteen months after passage of Trump’s tax plan, the law remains deeply unpopular. It turns out that people don’t like tax cuts for the rich, and that they especially don’t like it when those tax cuts are paid for by cutting their healthcare. Across party lines, they want the wealthy to pay more, not less.  This is especially true for women, who opposed the plan at even higher margins than men—and were uniquely, and negatively, impacted by it.

Rather than grappling with these facts, lawmakers like Sen. Chuck Grassley are feigning outrage—insisting that it’s their political opponents, and the media, who are to blame for the overwhelming unpopularity of a law nobody likes. If only people just understood how the tax law benefits them, Grassley insists, they would come around. 

This is gaslighting: People don’t dislike the tax law because they’ve been misinformed; to the contrary, they’ve got a lot of their facts straight. They dislike the tax law because they are clear on who it benefits—and it isn’t them

The average tax cut in 2018 for a worker making $25,000 or less—the people who care for our kids and our parents, clean our offices, serve our coffee—is a whopping 40 dollars. These workers, I should note, are overwhelmingly women and people of color.

The richest one percent of Americans, in contrast, got an average tax cut of $51,000 last year—more than the annual income of the median worker.  The nonpartisan Tax Policy Center estimates that, with approximately 83 percent of the law’s benefits going to the richest one percent of households, nearly 100 million households will also have an even higher tax bill by 2027. What’s worse, the tax law was paid for, in part, by stripping millions of workers of their health care, or increasing their premiums well beyond 40 dollars per year.

Women, children and families were hit especially hard by the law. Trump brags about how the tax law increased the standard deduction, but what he doesn’t mention is that the law eliminated the personal and dependent exemptions—which erases most, if not all, of the benefits families received. While the law increased the amount of the Child Tax Credit, it left the families struggling the most in our economy out of the full increase: 26 million children, disproportionately children of color, will not receive the full increase, and one million children in taxpaying immigrant families will be denied it completely. No need to worry, though, about the children of the super-rich: Trump and congressional Republicans doubled the income exempted from the estate tax, ensuring them an even higher inheritance.

Because the tax law was drafted secretly and hastily in back rooms where most wealthy white men held the proverbial pen, there also remain elements whose impacts we still don’t fully understand, or whose harmful unintended consequences are still unclear. We don’t yet know the full impact of provisions that create disincentives for corporations to settle sexual harassment claims, or discourage divorcing couples from settling on alimony. The tax law also inadvertently taxed the monthly compensation of Gold Star families who lost a loved one in combat; errors like these get enshrined into law when lawmakers negotiate secretly, hastily and without full and robust debate.

But one problematic provision was intentional: The tax law is the embodiment of a longer-term strategy by conservatives to starve the government of the revenue it needs to make public investments. Republicans didn’t blink an eye at adding $1.9 trillion to the deficit for lopsided tax cuts. But since the law was passed, they have conveniently become deficit hawks—proposing draconian budget cuts to health care, nutrition assistance, education and other basic building blocks of shared economic prosperity.

Surely Senator Grassley should understand why people are angry about this tax bill.

It’s no surprise that people do not like giving a lopsided tax cut to millionaires and corporations, or seeing Gold Star Families taxed as if they were wealthy. Rather than feign outrage, lawmakers like Grassley should start listening to their constituents—the overwhelming majority of whom want to tax the rich.

About

Melissa Boteach is the Vice President for Income Security and Child Care / Early Learning at the National Women’s Law Center and a member of the Tax March board.