Locking in further regressive tax cuts would just make the TCJA worse

Hunter Blair

Hunter Blair Budget Analyst, EPI

The House is set to vote this week on a second round of tax cuts that Republicans have dubbed “Tax Reform 2.0.” The first Republican tax cut, the Tax Cuts and Jobs Act (TCJA), was incredibly regressive with the worst component being a corporate rate cut that Republicans chose to make permanent. We said at the time that arguments that corporate rate cuts would trickle down to typical workers were bunk. And so far there is little evidence to suggest anything different.

Now House Republicans are hoping to solve a political problem—the unpopularity of their signature tax cut in 2017—by centering a second round of tax cuts on making the individual cuts in the TCJA permanent to achieve parity with the already-permanent corporate rate cuts. Republicans are marketing this as a tax cut for the middle class, but it’s nothing of the sort.

The second round of Republican tax cuts are still tilted towards the topShare of total federal tax change by income quintile, 2026

While the TCJA’s individual tax cuts may be less tilted towards rich households than the extremely regressive corporate tax cuts, these individual cuts are still awfully regressive in their own right. According to the Tax Policy Center, the bottom 60 percent, households making under $95,000, would get just 20.2 percent of the benefits. While the top 20 percent, households making over $168,600, would receive 63.0 percent of the benefits.

Locking in further regressive tax cuts won’t fix the TCJA, it will only exacerbate its deep flaws. Congress should reject this second round of Republican tax cuts for the rich.

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Reposted from EPI

Posted In: Allied Approaches

Union Matters

California Protects Precariat Workers

From the AFL-CIO

In a historic win for California’s workers, the California Legislature approved a bill Sept. 13 that makes the misclassification of employees as independent contractors more difficult.

Sponsored by the California Labor Federation, Assembly Bill 5 codifies and expands on a 2018 California Supreme Court decision.

The bill also will help curb the rampant exploitation of workers by unscrupulous employers and give California’s working people the basic rights and protections we all deserve. Gov. Gavin Newsom is expected to sign the bill into law.

 “The time is up for unscrupulous employers who claim their workers are ‘independent’ in order to cut corners on costs,”  California Assembly member Lorena Gonzalez said about A.B. 5

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