Tax Day is here. What’s in your return?
According to a new poll, only 17 percent of Americans say they’re paying less in taxes this year, despite the GOP’s promises that the huge tax cuts they passed were for the middle class. Tax returns due April 15 are the first to be filed under the Tax Cuts and Jobs Act (TCJA), which passed Congress and was signed by President Trump about 16 months ago.
It hasn’t worked out that way. In fact, multiple polls show that a plurality of voters opposed the tax law from the beginning — and still do. In fact, nearly two-thirds now favor its outright repeal. Those same polls show that the public strongly believes our tax system favors the wealthy and big corporations, who aren’t paying their fair share.
How did a major tax cut plan that promised happy-days-are-here-again prosperity for most working families fall so flat with taxpayers?
Because most of us aren’t seeing benefits from the tax cuts in our paychecks or tax returns. But we’re seeing the real results in newspaper headlines.
Big, profitable corporations like Amazon and Netflix pay $0 in federal income taxes, or even get refunds. J.P. Morgan Chase, the biggest bank in the country, brags to its investors that the tax cuts fattened its bottom line by $3.7 billion — on top of the $29 billion it would’ve made even without the tax cuts. Drug companies save billions from the tax cuts, while the prices they charge for lifesaving medicines continue to rise.
What really worries them is how Trump intends to make up some of the difference: with $2.5 trillion in cuts to programs like Medicare, Medicaid, Social Security disability benefits, and the Affordable Care Act (ACA). Axing the ACA would leave 20 million people without health coverage and endanger 130 million more who have pre-existing medical conditions.
Meanwhile, big corporations used their windfalls not to raise pay or invest in new factories, but instead spent a record amount — more than $1 trillion — buying back shares of their own stock. This artificially boosts their share price, which in turn rewards wealthy shareholders and CEOs.
Wall Street is happy, but Main Street not so much. The top 1 percent owns almost half of all stock in the U.S.
And there’s more. The corporate tax rate on domestic profits was cut from 35 percent to 21 percent, and the rate on offshore profits is just half of that. This change alone cost $1.3 trillion and incentivizes companies to keep their profits offshore — and to send jobs there, too.
After seeing all this, is it any wonder that taxpayers think something’s up?
It shouldn’t be this way. The unpopular Trump-GOP tax cuts benefiting the rich and big corporations should be repealed, along with the many loopholes and special breaks that predate the new law and similarly distort the tax code in favor of the well-to-do.
It their place, Congress should enact a fair share tax system to raise significant new revenue that can be put to work addressing our many needs: protecting Medicare, Medicaid, and Social Security, expanding health care coverage, rebuilding our roads and bridges, confronting climate change, and providing affordable housing and college aid.
It can be done. All it takes is a tax system that is the foundation of an economy that works for everyone, not just the wealthy few.