For Tax Fairness Voters, Party Differences Are Stark in This Year’s Elections

Trump and his Republican colleagues want to permanently extend their skewed-to-the-rich tax law, most of which is set to expire at the end of next year.

By William Rice

There are many issues that voters will be considering as they consider the two political parties and their presumed presidential candidates in the elections this fall—reproductive freedom, the climate crisis and voting access to name a few. But just as important, if not as high profile, is a key differentiating issue — tax-and-spending policy. For anyone who cares about how we raise and invest trillions of dollars in public funds (and that’s pretty much everyone, whether they know it or not), we should examine what political leaders have done on taxes – their actual record – when we make our choices in November. 

Republicans like Donald Trump have a clear record of handing out huge tax cuts to the rich and big corporations, then using the resulting rise in deficits that these tax giveaways create as an excuse to try to cut Social Security, Medicare and other public services working families need and deserve. 

In stark contrast, President Biden and his fellow Democrats have a history of pushing for wealthy households and multinational companies to pay their fair share of taxes so we can raise the necessary revenue to build an economy that works for everyone, not just those at the top. 

Not only do the candidates and their parties have recent track records that are polar opposites on taxing the rich and big corporations, they also have promised more of the same if returned to power in 2025. Voters are well-advised to acquaint themselves with both the history and proposed future offered by Democrats and Republicans on this key issue. 

During his presidency Trump achieved exactly one big legislative goal: a massive tax cut enacted in 2017 that mostly benefits the rich and corporations. Next year, the Trump-GOP tax law will give the highest-income 5% of households almost half its tax cuts; a full quarter will go to the top 1%; and the handful of super-wealthy households who make up the highest-income 0.1% will get one out of every 10 dollars in cuts. Everyone in that last group has annual income of at least $4.7 million and will get an average tax cut of a quarter of a million dollars. 

The Trump-GOP tax giveaway will wind up costing all of us almost $2 trillion in higher deficits, increasing public debt that Republicans—hypocritically but with great passion—cite as a reason to slash public investments in retirement security, healthcare, education, housing and more. 

Unlike Trump, President Biden can boast of many significant legislative accomplishments in his first term in office. One of them was 2022’s Inflation Reduction Act (IRA): the most aggressive response ever to the climate crisis, funded with several reforms that ensure corporations and the wealthy pay a fairer share of tax.  Those reforms include a 15% minimum tax on America’s biggest firms—some of which have gone years paying little or nothing—and restored funding for a depleted IRS to allow the agency to crack down on hundreds of billions of dollars in annual tax cheating by the rich. 

Every year he’s been president, Biden has tried to do even more by proposing the most sweeping program of progressive tax reform in decades, perhaps ever. He wants to end the tax-rate discount on investment income for millionaires; close the loophole that lets inheritors of $10 million or more escape all tax on their inherited capital gains; institute a special income tax on households worth over $100 million; and raise the regular tax rate on corporations, among other reforms. 

Biden would use the revenue raised by these reforms to lower costs, improve services and increase opportunities for working families. Free preschool for all four-year-olds, expanded daycare, more affordable healthcare, paid family leave, a boost to the Child Tax Credit, and less-expensive housing are among the investments in his most recent proposed budget. And on top of all that, he’d cut debt by almost $3 trillion. 

Meanwhile, Trump and his Republican colleagues want to permanently extend their skewed-to-the-rich tax law, most of which is set to expire at the end of next year.  As was true of the law’s original passage, extension of the expiring provisions would mostly benefit the wealthy. Almost two-thirds (63%) of the tax cuts would go to the highest-income fifth of American households in 2026—the top 5% would get about 40% of the benefits. The top 1% would on average get a tax cut of over $25,000 while the middle class would get about $3 a day. 

The cost of all this generosity towards the wealthy would be even higher than the price tag on the original law: nearly $5 trillion would be added to the national debt over the next decade. A panel of the GOP-controlled House earlier this year passed a plan to create a “debt commission” charged with proposing cuts to vital public services, including Social Security and Medicare. Republicans are uniformly opposed to raising taxes on the rich, including to reduce debts.   

There’s a lot riding on this year’s elections, perhaps even the future of democracy itself. But few issues have as broad an impact on the American people as tax-and-spending policies, nor offer as startling a contrast in party philosophy. Supporters of tax fairness and public investment are left with a simple decision.