As Americans rush to file their 2022 taxes before today’s deadline, GOP House Speaker Kevin McCarthy is announcing a proposal to cut spending on a range of critical programs after previewing the plan to Wall Street leaders yesterday. McCarthy plans to use the upcoming debt ceiling deadline to force cuts to healthcare, education, food assistance, housing, and many other benefits and services in order to reduce spending across the board, even as Republicans call for permanent tax cuts to wealthy households.
Cutting healthcare and education for working families while at the same time protecting tax giveaways for the rich is nothing new. In fact, the rich have been getting richer in our country for decades thanks to “trickle down” policies that lavish tax breaks on the wealthy while starving investments that level the playing field and increase access to opportunity for the rest of us.
In today’s two-tiered tax system, millionaires and billionaires pay lower tax rates than teachers and firefighters because wealth is not taxed like income from work. Tycoons can pass their wealth down to the next generation without paying any tax on the increased income from their assets, which are not taxed unless they are sold. Corporate tax loopholes enable some large corporations to pay zero in taxes while at the same time making record profits and shipping jobs overseas.
Despite all their bluster about the deficit, Republican tax cut plans have contributed significantly to the national debt. 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. Tax cuts enacted by Republican Congresses under 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. Even as the current Republican leaders threaten cuts to Medicaid and nutrition assistance, they are proposing to make the Trump tax cuts permanent and add $3 trillion to the national debt.
Given that inflation is still historically high and that the price of goods and services continues to stretch household budgets, giving more money to the wealthy and price-gouging corporations should be low on Congress’ list of priorities. But under the new Republican leadership, continued tax breaks for the wealthy are at the top of their list. In fact, the first vote of the new Republican majority was to roll back tax enforcement on wealthy individuals and households who for years have not paid what they owe in taxes.
Tax breaks and loopholes that enable the wealthy to avoid taxes cost the rest of us drain money from the economy that could otherwise be used for investments in education, healthcare, public safety and infrastructure that more broadly benefit everyone rather than concentrating wealth in a few hands.
The current debate about raising the debt ceiling – something that has been done with far less feet dragging or fanfare 78 times since 1960 – is a front for the Republicans’ real goals: cutting earned benefits like Medicare and Social Security in order to funnel more money to their wealthy donors and friends. Playing political games with the debt ceiling and government spending puts the economy at risk and ultimately hurts average people who don’t have a stake in the rich getting richer but rather in lawmakers acting responsibly to ensure that everyone in our country has a fair access to the basics and opportunity to work their way up, support their families and prosper.
Republicans are trying to create a crisis while President Biden has presented proposals to avoid one. Biden introduced a plan last month to protect and expand earned benefits, to stop price gouging on prescription drugs and other goods, and to shrink the deficit. At the heart of his plan is the simple proposition that the wealthy and corporations should actually pay their fair share of taxes like the rest of us do. Biden’s plan would reduce the deficit by $3 trillion, save $1 trillion by reducing waste and price-gouging, and invest in reducing costs and increasing access to services we need. Under Biden’s plan, no one making under $400,000 would pay more in taxes.
This Tax Day, millions of Americans will do their part and pay what they owe in taxes because that contribution is an investment in our shared economy and future. Billionaires, millionaires and corporations will keep trying to game the system to hold on to as much of their wealth as possible rather than paying up to help support the economy that has made them so rich to begin with. Republicans in Congress have an opportunity to do better than their predecessors and work with Democrats on governing toward a fairer tax system and more prosperous economy for all. They should take it instead of doubling down on the failed policies of the past that make the rich richer at our expense.