2017 Tax Cuts: Congress' Missed Opportunity
By Darrel Thompson
In response to a recent hearing before the House Ways and Means Committee, CLASP submitted a letter as a member of the Tax Alliance for Economic Mobility, highlighting the Tax Cuts and Jobs Act’s (TCJA) disparate impact on the economy, job creation, and workers’ wages.
The letter submitted reiterates how the TCJA doubled down on transferring wealth and political power to the richest among us. Such policy shows disregard for the growing income and wealth inequality, especially for people of color, due in part to a system that funnels more federal tax benefits to the top 1 percent of households than the bottom 80 percent of all taxpayers combined.
Research shows that tax cuts for the rich don’t trickle down. Raising income for the top 20 percent of earners actually decreases economic growth. Conversely, raising income for the bottom 20 percent of earners increases economic growth. Yet, the TCJA added $1.5 trillion to the national deficit to provide tax breaks to corporations and the wealthy. Moreover, Congressional Republicans immediately used the increased deficit to justify cuts to core basic needs programs, including proposing to slash the Supplemental Nutrition Assistance Program (SNAP) in the House farm bill.
Instead of deepening inequality and ballooning the deficit, Congress should have reformed tax expenditures to help the people who need it most. Further, it should have strengthened important credits like the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC). Nevertheless, Congress failed to improve the EITC; excluded millions of working families from accessing full benefits from the expanded CTC; stripped the CTC from nearly a million children without social security numbers; and threatened the stability of the private health insurance market by repealing the individual mandate.
CLASP urges Congress to focus on policies that provide necessary revenue for a well-functioning government while ensuring all households have access to economic opportunity through an equitable tax code.