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This Tax Day Column Is Going to Piss You Off
There are federal agencies and nonprofit think tanks that have done a good job crunching tax cut extension numbers, but most people are not aware of their work. They have to rely on the news media for that information, and to be sure, news outlets have accurately reported that the GOP tax cut extension—which expires after this year unless Congress acts—favors the uber wealthy. Most reporters also have cited the Congressional Budget Office or another reputable source that have calculated that the tax cuts would cost the government $4.6 trillion in lost revenue over a decade, bolstering the GOP’s trumped-up rationale for dismantling “unaffordable” federal agencies and programs. For the most part, however, the news media have failed to spell out the damning details.
This column is going to provide those details—and they’re going to piss you off.
Big bucks for the top 1 percent
The nonpartisan Tax Policy Center, a joint project of the Brookings Institution and the Urban Institute, has been tracking the ebb and flow of the Republican tax cut extension plan. It posted its most recent updated analysis on April 11, which included a very informative bar graph. But the center buried some pertinent data in an end note at the bottom of that chart, so I asked an information designer to create a chart that clearly shows how households in different income brackets would be affected.
If the Republican-controlled Congress succeeds in extending the tax cuts, which everyone received to some extent due to the original 2017 law, income taxes would stay roughly the same, providing a windfall for the 1 percent of households that make more than $1 million a year. If the GOP fails to extend the cuts, taxes would go back to where they were before. That would especially hit the wealthiest Americans, whose taxes would help replenish government coffers and short-circuit the Republicans’ longtime goal of privatizing most government functions.
What the numbers plainly show is that the 1 percent of households that make more than $1.14 million annually would continue to receive an average tax break of more than $77,000, while households making between $66,800 and $119,200 would receive an average tax cut of only $1,120. Households making less than $66,800 would on average save only $500, while the poorest households—those earning less than $34,600 a year—would be rewarded with an average tax break of a measly $120. (At the same time, Trump’s tariffs could cost the average household $4,700 a year, according to new analysis by the Yale Budget Lab, wiping out the tax break for as many as 90 percent of households.)
Many Democrats, including Joe Biden when he was in the White House, wanted to extend the tax cuts, but only for households making less than $400,000 a year. At a House Rules Committee hearing on February 24, Jim McGovern (Mass.), ranking Democrat on the committee, offered amendments to cap the tax cut extensions at various income levels—first for households earning less than $400,000 per year, then less than $1 million, $100 million, and $1 billion per year.
All of McGovern’s amendments were voted down along straight party lines. Five of the nine Republicans on the committee who rejected the amendments are millionaires. The richest, Ralph Norman (S.C.), has a net worth of $66 million. The next wealthiest Republican on the committee, Virginia Foxx (N.C.), has $6.9 million. Two of the four Democrats on the committee who voted in favor are millionaires—McGovern himself, with a net worth of $3.4 million, and Mary Gay Scanlon (Pa.), with a net worth of $9.35 million.
Millionaires are shaping tax policy in their favor
Norman, Foxx, McGovern and Scanlon are hardly outliers. Roughly half of all members of Congress are millionaires, including about two-thirds of senators. By contrast, only 6.6 percent of Americans have that kind of money. Do wealthy legislators protect their class interest? A number of them do.
For example, the committees that drafted the tax bills the House and Senate recently passed (with no Democratic support) setting the stage for extending tax cuts are studded with Republican millionaires, according to a February report by Americans for Tax Fairness (ATF). Besides the tax cut extension, the bills would lower corporate tax rates, exempt tips from taxes, and allow new car buyers to deduct their auto loan interest payments. All told, the Trump tax package could cost between $5 trillion and $11 trillion over the next decade, according to the Committee for a Responsible Federal Budget.
ATF found that the average net worth of the Republicans on the House Ways and Means Committee and Senate Finance Committee is nearly $15 million. More than two-thirds of the 26 Republican members of the House committee and nearly two-thirds of the 13 Republicans on the Senate committee are millionaires, and nine of the 36 GOP members on the two tax-writing committees are worth more than $10 million. The wealthiest Republican on the Ways and Means Committee, Vern Buchanan (Fla.), is worth $249 million. The richest Republican on the Senate Finance Committee, Ron Johnson (Wis.), has a net worth of $54.6 million.
“The multimillionaire Republicans in charge of these key committees cannot properly represent average Americans’ tax and spending interests,” said ATF Executive Director David Kass in a statement. “Their prioritization of extending Trump’s tax scam demonstrates their disconnect from middle- and working-class constituents’ needs.
“While wealthy Democrats also serve on these committees,” he added, “they aren’t promoting continuing the entire Trump tax legislation which primarily benefits rich individuals like them and giant corporations—legislation that would add trillions to the deficit and threaten funding for Social Security, healthcare, education, housing and other vital public services.”
Ninety years of GOP attacks on progressive federal programs
The GOP’s current push to extend tax cuts is just the latest round of the party’s 90-year campaign to eliminate government programs based on a misguided belief that the private sector can take care of just about everything besides the military.
In the 1930s, the GOP tried to kill Franklin Roosevelt’s New Deal in its crib. Thirty years later, it opposed Lyndon Johnson’s Great Society programs, notably Medicare, Medicaid and federal education funding. Richard Nixon cut funds for anti-poverty programs. Ronald Reagan rolled back welfare, public housing and food assistance programs, declaring that government is the problem, not the solution. George W. Bush wanted to privatize Social Security. Does this all sound familiar?
Now that the Republicans have slim majorities in both houses of Congress, a vengeful Donald Trump in the White House, and Elon Musk’s swat team, they will do all they can to fulfill their dream of destroying the programs and agencies they never supported. Why? To pay for more tax breaks for the wealthiest Americans, which includes them. Is that American exceptionalism or what?
This column was originally posted on Money Trail, a new Substack site co-founded by Elliott Negin.
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