Fair Taxation (Federal)

Background: During last month’s budget fight, House Republicans threatened to crash the economy and forced cuts to vital services because of a claimed concern about federal debt. Now that that fight is over, House Republicans have immediately turned to pushing costly tax cuts for the rich. This week, they’re opening the battle with a markup on legislation to renew cuts and reverse increases in corporate taxes from the 2017 Trump-GOP tax law.

 

This is straight out of the playbook Republicans have been using for decades:

1. Cut taxes for the wealthy and corporations, which blow up the deficit

2. Blame the deficit on programs and services for working families

3. Demand harmful cuts to programs for working families

4. Repeat

 

The 2017 Trump-GOP tax scam was heavily skewed to the wealthy and corporations, and Republicans are now working to make them permanent. The package coming to the floor next week is the opening salvo in that battle.

 

Many of the corporate tax cuts in the package are egregious giveaways to firms that need them least. Hugely profitable billion-dollar companies like Google, Apple, Intel, Microsoft, and Boeing already receive billions of dollars in federal tax subsidies for research and experimentation (R&E) through the permanent research tax credit. Now they’re asking for hundreds of billions more.

 

The legislation only covers two years, but if the changes are made permanent—as the GOP has made clear it wants—these tax benefits for business would cost over $1 trillion. And the legislation is heavily slanted towards the rich, including a temporary boost to the standard deduction that mostly benefits high-income households. Next year the richest 1% of families would get an average tax cut of over $16,000—the poorest fifth would get only $40. Foreign investors would walk away with almost $24 billion in U.S. tax savings.

 

To the extent that any of the GOP package is offset in the short-term, it's paid for by repealing part of the Inflation Reduction Act's investments in green energy. Thus far, the only tax increases we have seen House Republicans support are those that worsen climate change and hurt families.

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Check out these other resources for more information: 

Resources/Headlines:

 

• The Hill: House GOP starts costly effort to save cuts for wealthy in Trump tax law

• New Republic: The House Republican Two-Step: Program Cuts for the Poor, Then Tax Cuts for the Rich

• Huffpost: After Brinkmanship Over Debt, House GOP Tees Up Potentially $1 Trillion In Tax Cuts

• Common Dreams: 'Tax Scam': Republicans Follow Debt Ceiling Fight by Proposing Tax Cuts for Wealthy

• CRFB: W&M Tax Bill Would Cost Over $1 Trillion if Made Permanent 

• Bloomberg: White House Dismisses Republican Tax-Cut Plan as Handout to the Wealthy

• Washington Post: With debt debate finished, House GOP unveils new bills to cut taxes

• Truthout: Top 1 Percent Would Get $24B in Tax Cuts Under New Republican Plan

• Common Dreams: New GOP Bills Would Hand Richest 1% Over $28 Billion in Tax Cuts Next Year 

• CAP: Tax Cuts Are Primarily Responsible for the Increasing Debt Ratio

• Roll Call: Ways and Means GOP preps tax package for vote next week  

• CBPP: Flawed House GOP Tax Package Chooses Wealthy Shareholders Over Children and Families and the Fight Against Climate Change

• ITEP: Trio of GOP Tax Bills Would Expand Corporate Tax Breaks While Doing Little for Americans Who Most Need Help  

 

Source: Americans for Tax Fairness