Opinion: Tax breaks for the rich and Wall Street will not help Iowans

• Sue Dinsdale of Huxley is the executive director of Iowa Citizen Action Network.
• Chris Schwartz of Waterloo is a Black Hawk County supervisor.

Just in time for Tax Day this past Tuesday, GOP House Speaker Kevin McCarthy announced on Wall Street his plan to cut food assistance, Medicaid and many other programs that help Iowans as part of a proposal to increase the debt ceiling, which would allow the United States to keep paying on debts it owes. 

This is the latest edition of a familiar debate over cutting spending and cutting taxes that has played out many times before. Republicans in Congress plan to leverage the urgency of lifting the debt limit to force cuts to everything from Social Security and Medicaid to education while at the same time proposing more tax breaks for the wealthiest households and corporations.

The proposed cuts have a devastating impact on our state, particularly on aging people who’ve already been struggling to make ends meet through stubborn rising inflation, price increases on everything from prescriptions to eggs and the pandemic economy. 

The last time Republicans controlled the U.S. House of Representatives, their major accomplishment was passing President Donald Trump’s tax cut law, which slashed corporate taxes by nearly half and gave years of huge tax breaks to the wealthiest households while the rest of us got little benefit. 

In 2020, the richest 1% of households in Iowa got an average tax cut of $35,090 while the bottom 60% got about $407 on average from the Trump tax law. The “trickle-down” effect that Trump promised would result in more jobs and greater prosperity for middle-class Americans never materialized.  Iowans continue to face huge barriers in accessing basics like health care, broadband, and decent-paying jobs. Tax breaks for the rich and Wall Street corporations haven’t helped the rest of us. 

The Trump tax cuts added trillions to the national deficit, which Republicans are now so eager to address. But the concern about debt is a sham: The same Republicans wailing about debt want to extend the Trump tax cuts permanently. Making the Trump tax cuts permanent would add $3 trillion to the national debt, according to the Tax Policy Center. 

A recent study shows that the Republican tax cuts of the past 25 years are the reason federal debt has gone up as a share of the economy. The report from the Center for American Progress finds that those tax cuts enacted by Republican Congresses and Presidents George W. Bush and Donald Trump — which both disproportionately benefited the rich and profitable corporations — will have added $10 trillion to the national debt by the end of this year. 

Yet Republicans aren’t clamoring to end these expensive tax breaks for millionaires or Wall Street corporations that are driving up national debt. Instead, Republicans are proposing to cut spending on the programs that benefit the rest of us: public education, Medicaid, Medicare, Social Security, job training, infrastructure, and safety.  Given McCarthy chose to make his announcement on Wall Street, he can hardly be clearer about his actual agenda and which audience he cares about most. 

The Republicans’ real goal isn’t curbing the deficit or even cutting spending. After all, none of them seem to mind spending more money on tax breaks for rich households or their corporate donors no matter what it does to the deficit.  

Given how much the tax system already privileges the wealthy and big corporations,  more tax breaks for the wealthy should be the lowest priority for Congress, especially when food prices are predicted to rise another 7.5% this year and up to 18 million people are at risk of losing Medicaid.  Although inflation has stabilized after reaching record highs over the past year, the current rate of inflation is still higher than it has been for 33 years, and many economists are still predicting a recession.

President Joe Biden has proposed a common-sense alternative to protect Medicare, Medicaid and Social Security benefits while reducing the deficit at the same time.  His plan increases taxes on wealthy corporations, requires billionaires to pay more in taxes and closes corporate tax loopholes that drain money from the budget to enrich a tiny number of super rich individuals. The proposal raises $5 trillion in tax revenue without increasing taxes on anyone making under $400,000 annually and saves taxpayers an additional $1 trillion by cutting waste and price-gouging in programs like Medicare. 

Republicans who actually care about tackling the deficit, cutting waste and fraud, and acting in the best interest of the vast majority of their constituents who are not rich Wall Street tycoons or heirs to family fortunes should work with the president on passing and implementing this plan instead of doubling down on making the rich richer at the expense of everyone else. 

Sue Dinsdale of Huxley is the executive director of Iowa Citizen Action Network. Chris Schwartz of Waterloo is a Black Hawk County supervisor.