NEW MEMO: Path to repealing Trump’s tax cuts for the rich
October 15, 2020
Memo lays out how worst of Trump tax cuts can be dismantled quickly while laying foundation for progressive tax reform
New memo is a step-by-step guide to quickly repealing the Trump tax cuts for the wealthiest Americans and biggest corporations
Washington, DC – Today, Groundwork Collaborative released a new memo laying out a roadmap for how President Trump’s Tax Cuts and Jobs Act of 2017 (TCJA) could be dismantled quickly and in a way that ends the massive tax breaks for the wealthiest Americans and biggest corporations, brings in trillions of dollars of new revenue, fixes our broken international corporate tax system, helps families who were excluded from the TCJA, and lays the foundation for continued progressive tax reform work to raise needed revenue and rebalance power in our economy away from wealthy and well-connected.
The new memo is intended to be a roadmap for Congress and to raise public awareness of how the TCJA could be dismantled quickly as soon as the opportunity arises.
The memo was written by Kitty Richards of Groundwork Collaborative and Roosevelt Institute, Michael Linden of Groundwork Collaborative, Steve Wamhoff of Institute for Taxation and Economic Policy, Seth Hanlon of Center for American Progress, and Josh Bivens of Economic Policy Institute.
Executive summary (read full memo here)
The 2017 tax law was the culmination of decades of trickle-down tax policy that worsened inequality, increased the harmful concentration of economic power, and drained trillions of dollars in revenue that could have been dedicated to investments in a stronger, more inclusive economy. Progressives have rightly identified reversing TCJA’s tax cuts as a top priority.
On this, the American people are on our side. The bill was opposed by the public by a nearly 2:1 margin when it was passed,1 and is still opposed by more Americans than support it. Meanwhile, increased taxes on the wealthy and corporations— who Americans correctly perceive to be the beneficiaries of the TCJA—are supported by strong majorities.
Yet while progressives agree that reversing the Trump tax scam should be a high priority, there has been little focus on how exactly the law should be dismantled. A straight repeal of the law is impractical and would only restore the deeply flawed and inadequate tax code that existed in 2017. The law is complicated: It included some tax cuts for people with low- and moderate-incomes alongside much bigger tax cuts for corporations and the wealthy, and it reduced some tax breaks for the wealthy and corporations even as it gave them massive tax cuts on net. Some of its major provisions are permanent, but others are set to expire over the next several years, creating a series of decision points for Congress.
Given all of these complicating factors, it is critical that progressives forge a united strategy for dismantling the 2017 law and reversing its regressive and harmful effects.
Any TCJA repeal bill must, at a minimum:
- Immediately repeal all of the tax cuts for the rich and corporations, which have worsened inequality
- Raise large amounts of progressive revenue, at a bare minimum fully reversing the entire $2 trillion revenue loss from TCJA
- Fix the broken international corporate tax system created by TCJA, which allows multinational corporations to dodge taxes and rewards the offshoring of profits and jobs
- Extend the full benefit of the TCJA’s Child Tax Credit expansion to the millions of families who were left out
This memo creates a roadmap to an immediate repeal package that meets these goals, while holding all but 3% of tax units harmless. This memo does not fully outline what a comprehensive tax reform would look like, and its recommendations should not be considered to be a replacement for bigger, structural changes to our tax system. There are many important proposals for reforming our tax code to raise needed revenue and rebalance power in our economy away from the rich and corporations, that we hope can be implemented soon. And there are many critical changes for lower-income Americans, like an expansion of the childless worker EITC, that would be dramatic improvements to our tax code but are beyond the scope of this project. Nevertheless, it is important to have a fleshed out example of what TCJA repeal could look like in case a legislative opportunity arises.
The Groundwork Collaborative is dedicated to advancing a coherent and persuasive progressive economic worldview and narrative capable of delivering meaningful opportunity and prosperity for everyone. Our work is driven by a core guiding principle: We are the economy. Groundwork Collaborative envisions an economic system that produces strong, broadly shared prosperity and power for all people, not just a wealthy few. Follow Groundwork Collaborative on Twitter at @Groundwork and learn more at GroundworkCollaborative.org.