Welcome to SWOT Sunday!
Taxes can be complicated, but I vow to keep this discussion as simple as possible, and laser-focused on the political opportunity herein.
What Is The Tax Cut Sunset?
Trump’s Tax Cuts and Jobs Act (TCJA) of 2017 lowered some individual income tax rates, with most of the dollar savings going to the wealthy ($578K+/year), but some going to the poor and middle class ($11K-$231K). The $231K-578K people got nothing. Don’t ask.
The standard tax deduction went up significantly too, saving money for many regular people. Estate deductions also went up, meaning that rich people could protect even more of the wealth they leave behind at death from taxes.
Some business taxes in the act were made permanent, and others are set to expire. The individual income tax rates and deductions will expire on Dec. 31, 2025, if new laws aren’t passed, and revert to pre-TCJA levels.
Why should progressives actively support a new plan to raise taxes on the rich, and cut taxes on the not-rich?
Because it’s potentially a winning issue.
Even the New York Times says “the moment has arrived for changes in the tax code,” after decades of “common sense” tax cutting for business and the rich.
Biden said he will raise taxes on business and the 1%, making it a key point in his State of the Union address. Since then, his poll numbers are up in swing states.
Even a majority of Republicans support it.
According to a March story in Common Dreams, the polling firm Morning Consult reports that 69% of registered voters in seven swing states say they support raising taxes on billionaires. That includes critical states Michigan, Wisconsin, and Pennsylvania.
The poll found 58% of Republicans, 83% of Democrats, and 66% of independents support raising taxes on billionaires.
The poll also found similar numbers of voters support raising taxes on people who make more than $400,000 per year (the 1%).
Another 2 in 3 swing-state voters support cutting taxes for everyone else, while half support raising the corporate rate.
It’s a chance to define the kind of country we want
Do we want a country in which, according to the Guardian, “The 25 richest Americans, including Jeff Bezos, Warren Buffett and Elon Musk, paid a “true tax rate” of just 3.4% between 2014 and 2018, according to an investigation by ProPublica?”
By contrast, the median American household paid 14% in federal taxes, ProPublica reported.
The top three wealthiest people have HALF of all the wealth in a country of 330 million people.
Meanwhile, our government can’t fund our schools, roads, bridges, health care, or anything to the degree that’s needed.
Does that sound fair or just? No.
I think we’d rather live in a country where everyone pays their fair share in taxes, and our government has enough revenue to pay for the things we need to support the common good.
We can light up the GOP by telling the truth about where their candidates stand on taxes and a just society.
When so many Americans are struggling, allowing the rich to keep getting obscenely richer shouldn’t be a winner for them.
Democrats and progressives have to resist the temptation to get into the weeds, and keep the message very simple and emotionally resonant. Jeff Bezos, Bill Gates and Elon Musk should feature prominently. They’d also need an aggressive communications strategy. But it could be done.
One thing I think they must do is, in some way that’s easy to grasp, cut taxes on the poor and middle class. Lowering the rates is the simplest way to do that.
The Trump tax cuts and deduction increases did make a difference in regular people’s paychecks. I felt the difference in mine. We have to do the same.
Re-position the GOP on financial issues
Of course people care most about pocketbook issues, or as the GOP calls them, “inflation.” How can we move people from thinking the GOP does better for people on "inflation"?
There’s a number of reasons prices have gone up, including price gouging, that should be highlighted, but keep it simple.
But the main problem for poor and middle-income people is that they don’t have enough money. Again, there are many reasons for that. But cutting their taxes gives them more money. Boom. And making the rich pay appeals to their sense of justice. Politically, this is the opportunity.
We need to re-position the GOP tax strategy as one that recklessly raises the deficit and starves the government of money to do what matters most to people, like feeding people, helping people get jobs, supporting schools and rural areas, fixing roads, and supporting American business, especially small business.
Progressives need to embrace this issue wholeheartedly
Raising taxes on the rich is part of the Congressional Progressive Caucus’ recent policy agenda. But they have it far too low on the list (the # 6 section). To have credibility, you have to show where you will get the money to do ambitious plans like they have. Raising taxes is not only necessary, it taps into people’s anger about the super rich.
If progressives push hard for things that may seem edgy and get them done, like cutting taxes further for the poor and middle class, it would be powerful.
We have six months until the election. It’s really important that we don’t leave this tax discussion to after the election. We need to embrace the class struggle now, and hang the GOP with their love for the billionaires.
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