This Tax Fight Is About You
The tax fight is not about politicians in Washington—it’s about you and your family in your community.
By William Rice
So there’s a big legislative battle shaping up over taxes in Washington—but what’s it to you? That’s a reasonable question, since a lot of debates in D.C. can seem remote, theoretical, and unrelated to the day-to-day concerns of everyday people. But that’s not true of this tax fight.
If President Trump and Republicans in Congress succeed in extending tax cuts that are supposed to expire at the end of this year, you could lose out in several ways.
Reduced Public Services: If your mom is in a nursing home; your kid’s in community college; you ever pay a utility bill; you need healthcare; or you take the bus to work—your life could be made more difficult and costly if those expiring tax cuts are extended. Why? Because the most likely way Republicans will pay the staggering $5.5 trillion cost of their tax bill—most of which will go to the wealthy—is by cutting public investments that make services like healthcare, education and transportation more affordable for working families.
More Corporate Price Gouging: Another way Trump and the Republicans talk about paying for their wealthy tax cuts is with tariffs on imported goods, rather than using the revenue to protect American jobs and invest in workers. Trump has already imposed 25% tariffs on imports from Canada and Mexico, our two biggest trading partners. Targeted tariffs can be a good tool for protecting specific U.S. industries from unfair foreign competition. However, even though tariffs are paid by companies and corporations, these businesses will most likely use the general tariffs as an excuse to raise prices on consumers in order to protect their profits rather than their customers and American jobs.
Fewer Jobs: Canada and Mexico have already said they would retaliate for Trump’s reckless tariffs by placing tariffs on American imports, ranging from cars to steel, vegetables to paper products. If U.S. firms can’t profitably sell their products in these countries, they could start shutting down production and laying off workers here.
Higher Interest Rates: Whatever cost of their slanted-to-the-rich tax cuts Republicans can’t scrounge up cutting vital services or imposing destructive tariffs, they’ll simply add to the national debt. While deficit spending makes sense during recessions and other national emergencies in order to prop up the economy and support working families, borrowing just to give the rich more tax cuts is a terrible idea. Higher national debt tends to push up interest rates, which makes any purchase you might finance—from homes, to cars, to dishwashers—more expensive. Higher mortgage rates can make rents higher, too, as more people remain tenants because they can’t afford to become homeowners, pushing up demand for rental homes.
Democrats have a lot of alternative tax-and-spending plans they’ll be raising during the debate. Instead of handing the wealthy even more tax cuts, the Democratic plans would force the rich and big corporations to pay a fairer share of tax—and then use that money to lower costs, improve services and increase opportunities for working families. The Democratic plans include:
A Special Tax on Billionaires and Other Hyper-Wealthy People. Because of loopholes in the law, billionaires like Elon Musk and Jeff Bezos have paid zero income tax in certain years. Taxes on the ultrawealthy would close those loopholes, raising hundreds of billions of dollars in revenue from those best able to pay it.
Taxing Corporations That Offshore Jobs. Big corporations dodge U.S. taxes by setting up production offshore and using accounting tricks to shift profits made in the U.S. to low- or no-tax havens. The tax bill Trump and the Republicans are so eager to extend gave corporations a half-off tax-rate discount on earnings they make overseas compared to what they pay on profits made here at home, a strong incentive to offshore. A Democratic bill would end that discount, equalizing the tax rate on domestic and foreign earnings and close other loopholes Republicans have opened up over the years that encourage big companies to abandon U.S. workers and communities.
Curbing Economic Dynasties. Billionaire families and other super-rich clans destabilize our economy, disrupt our society and endanger our democracy. They use their massive wealth to buy politicians and shape public policy to their liking—which is usually bad news for the rest of us. The tax law the Republicans want to extend would let the lucky heirs to multimillion-dollar fortunes keep even more of their riches, without sharing any through the estate tax with all of us who were not born rich.
The tax fight is not about politicians in Washington—it’s about you and your family in your community. It’s about whether you’ll have a job, be able to send your kid to a decent school, be dodging potholes on the way to work, and take care of your aging parents. This fight deserves your attention—and participation. Find out how to get involved here.