We’ve seen this movie before.
For the last half century, anti-worker extremists have manipulated the tax code to make life easier for folks who already live on Easy Street. Now, they’re at it again. In June, a new round of tax cuts for the super-rich and corporations were proposed in Congress – three new bills that would give the richest 1% an average tax cut of more than $16,000, while the lowest income taxpayers would receive an average of just $40.
That’s a ratio of 400 to 1. Think of it in terms of the length of a football field: the wealthiest Americans would sail into the end zone with this tax cut, while those at the bottom of the income scale would crawl only about 10 inches downfield. To make matters worse, far-right lawmakers want to make these cuts permanent, sapping $1 trillion of urgently needed resources from our communities over the next decade.
As if enough damage wasn’t done under the previous administration. Thanks to the tax cuts signed into law in 2017, the wealthiest 400 families are now paying a smaller percent of their income in taxes than the bottom 90%. And to be clear, those 400 families aren’t just the comfortably affluent. They are the multibillionaires with vastly more income and wealth than they can possibly use.
Tax fairness is a core issue for our union. AFSCME members care about these injustices because the current system makes life tougher for working families. And it rigs the rules to give the ultra-wealthy even greater profits and power. We understand better than anyone the connection between tax revenue and the vital public services that create strong communities – libraries, roads, schools, parks and public safety. And we are willing to pay our fair share, as long as the wealthy and corporations do the same.
But income earned by working-class families is taxed at a higher rate than income from stocks and investments. Think about that for a moment: money earned through a hard day’s work as a sanitation worker or health care provider is taxed at a higher rate than what a billionaire earns sitting around doing nothing while watching his investments grow. And on top of that, as of a 2018 analysis by the Institute on Taxation and Economic Policy, working families already shoulder a greater burden of state and local taxes than the top 1%. It’s wrong, it’s unfair, and it is starving our communities of the resources they need.
Advocates for the current round of tax cuts want to slash public services and cram more into the already bulging pockets of the top 1%. (And these are the same people, by the way, who were willing to hold the economy hostage to force reckless spending cuts during the debate over raising the debt ceiling). Fortunately, public opinion is not on their side. According to a recent nationwide poll, an overwhelming bipartisan majority prefers raising taxes on the rich and big corporations to cutting Social Security, Medicare and local services like K-12 education. Our tax system has gotten so out of whack – so skewed in favor of the wealthy – that even some of those individuals are calling it out. From Disney heir Abigail Disney to Microsoft founder Bill Gates, some of the richest Americans are actually asking to pay more in taxes.
We have the power to level the playing field for working families by holding elected officials accountable. And under the current administration, we are finally making progress. The Inflation Reduction Act signed by President Joe Biden last summer makes it a lot harder for corporations to engage in tax dodging schemes. In addition to a 15% corporate minimum tax, the new law includes a tax on stock buybacks – a first in U.S. history – that is expected to generate $76 billion in revenue over 10 years.
And some states are showing us the way, like Washington, which recently increased the capital gains tax in order to fund parks, public safety and mental health. With allies in the White House, the time for action at the national level has never been better. The Biden-Harris administration is committed to helping rebalance the tax scales for working families.
On the Fourth of July, we celebrated our shared American values, reflecting on the true meaning of patriotism and what it means for a nation to be committed to liberty and justice for all. Now that Independence Day has passed, we can’t lose sight of what the holiday calls us to do. Tell Congress to put those values into action. Contact your representative and tell them to reject this latest round of proposed tax cuts for corporations and the wealthy.