Studying the Damaging Effects of the Republican Tax Law
Laura Peralta-Schulte, NETWORK Senior Government Relations Associate
October 17, 2018
On December 22, 2017 President Trump signed the Tax Cuts and Jobs Act into law. The new law significantly rewrites the tax code to make wide-reaching, regressive changes to our federal tax system, largely benefiting corporations and the highest-income households with little relief for middle and lower-income households. The law also permanently eliminates the individual mandate of the Affordable Care Act, hurting the viability of our healthcare system. These major changes did not receive a public hearing in either chamber before passing on a nearly party-line vote. Republican Congressional leadership put the bill on a fast track to President Trump’s desk from day one.
NETWORK opposed the Tax Cuts and Jobs Act because it violated basic principles of tax fairness and encouraged even greater economic inequality. The bill violated NETWORK’s Principles of Tax Justice, which state that any changes to our tax policy must: make the tax code more progressive, raise revenue to support programs that invest in people and communities, and decrease inequality. The law fails to do these, in fact, it adds $1.9 trillion to the federal deficit over ten years, draining the treasury of valuable revenue for human needs programs.
Since passing the law, President Trump and House Republicans, like Speaker Paul Ryan, have used the increase in the deficit as justification for proposing deep cuts to programs including Medicaid, Medicare, the Affordable Care Act, Social Security, and the Supplemental Nutrition Assistance Program. It is clear that the Trump Administration and the Congressional Republicans would like to cut funding for these programs to pay for their tax law.
Despite increased annual corporate profits this year, corporate tax revenue is more than $100 billion lower than last year because of the law’s corporate tax rate cut. These corporate tax cuts are not trickling down. Nine months since the law went into effect, working families have not received the economic benefit they were promised. 4.4% of workers have gotten a pay hike or bonus connected to the tax law— only about 7 million out of 155 million— and most increases were a one-time bonus, not a permanent wage increase.
The provisions of the Tax Cuts and Jobs Act put our country on a dangerous path to higher economic inequality and decreased investment in our communities. We must put an end to these policies that enrich those who are already thriving and make changes to help those struggling while generating reasonable revenue for responsible programs.
Congressional Votes on the Tax Cuts and Jobs Act by State
See how your Members of Congress voted on last year’s tax law here and hold them accountable for their votes!