What Else Could a Tax Cut for the Richest 1% Buy?
A new report from the National Priorities Project shows what's at stake if America's richest get a tax cut
Inequality in America has been growing for decades, stymying our national potential and contributing to the growing political rift in the country. According to estimates by the Institute on Taxation and Economic Policy, the Tax Cuts and Jobs Act introduced in the House of Representatives would disproportionately benefit the richest 1 percent of Americans.
The ITEP estimates reveal that nationwide, the richest 1 percent of earners would receive a 31 percent share of the tax cuts in 2018 – and by 2027, the richest 1 percent would receive a 48 percent share, leaving the remaining 99 percent to share roughly half the tax benefits.
What the ITEP estimates cannot reveal is the lost potential in federal investment represented by this reallocation of resources to the 1 percent. The House bill is designed to increase the deficit by no more than $1.5 trillion over ten years – the equivalent of about a year of federal discretionary spending.
The loss of revenue will trigger other choices, as decision makers in Congress either accede to a higher than customary level of national debt, or face political pressures to drastically reduce spending on federal programs and services. Pressure to cut spending could result in losses to popular federal programs ranging from education to health care and infrastructure, and more.
There is little certainty about what programs might be most affected, or how deep the resulting cuts could go, although recent budget proposals provide some likely scenarios. Meanwhile, basic facts remain murky for a public trying to understand what this tax plan means: how much can $1 billion buy?