June xx, 2018
OPPOSE “ROUND 2” OF TRUMP-GOP TAX CUTS – STOP ANOTHER MASSIVE GIVEAWAY TO THE WEALTHY
Deadline: COB Monday, June 11, 2018
Dear Member of Congress:
We urge you to reject any so-called “Round 2” of tax cuts from President Trump and Republicans in Congress like those enacted last year, which once again would primarily benefit wealthy Americans and could end up costing close to $800 billion over the next decade and much more over the long-term. The richest Americans do not need another massive tax cut; they and America’s corporations need to start paying their fair share, so we have the resources needed to protect Social Security, Medicare and Medicaid and to invest in education, infrastructure and many more services working families and communities need to thrive.
The original Tax Cuts and Jobs Act (TCJA) bestows most of its benefits on the wealthy and large corporations. Its $1.9 trillion cost, according to the Congressional Budget Office (CBO), will vastly enlarge the federal debt and be used as an excuse for conservatives to enact deep cuts to Social Security, Medicare, Medicaid, education and other vital public services that tens of millions of people rely on—mostly seniors, children, women, and people with disabilities. Extending or expanding the law’s existing provisions will likewise primarily enrich the already wealthy while further threatening essential services and investments.
The most frequently mentioned component of a Round 2 is the permanent extension of individual tax breaks currently scheduled to expire at the end of 2025. Even though they do not include TCJA’s tax cuts for corporations, which were made permanent in the law, they are still heavily slanted toward the rich. That is because they include major tax breaks that mostly or exclusively benefit high-income taxpayers: the reduction in the top individual income tax rate that exclusively affects the tiny percentage of people with annual income above $500,000 ($600,000 for couples), the special new deduction for individuals owning so-called “pass-through” business entities, the tax cuts for multi-million-dollar estates (which doubled the amount of a couples’ assets exempt from the estate tax from $11 million to $22 million), and the increase in the amount of income exempt from the Alternative Minimum Tax (AMT).
The Institute on Taxation and Economic Policy (ITEP) has determined that 43% of the tax benefits of extending these expiring TCJA provisions would go to the wealthiest 5% (incomes above $290,000). The bottom 60% (incomes below $81,000) would get only 19% of the tax benefits. Therefore, the extension of TCJA’s individual provisions is not a middle-class-focused tax cut but rather another benefit for the wealthy.
In particular, the pass-through deduction, which loses $265 billion and reduces individuals’ taxes on their business income, has been misleadingly sold as a “small business” tax cut, but most of the benefits flow to wealthy business owners (such as President Trump) and wealthy investors. In 2024, 61% of the benefits will go to the wealthiest 1% of pass-through business owners, while just 4% will go to the bottom two-thirds, including the solo practitioners and proprietors of Main Street shops that truly personify “small business,” according to the Center on Budget and Policy Priorities. The pass-through deduction is already being used by people who can afford highly-paid tax lawyers and accountants, while its byzantine rules increase the complexity faced by actual small businesses’ tax compliance. Extension of this special pass-through deduction would perpetuate these skewed benefits and sources of unfairness.
In addition to the $1.9 trillion cost of the TCJA, CBO estimates extending the expiring individual tax provisions (including those affecting pass-through businesses) would cost an additional $650 billion over the next decade, with the costs exploding over time. If one of the few expiring business-tax provisions—full expensing—is also made permanent (as has been suggested by conservatives) the added ten-year cost would grow by another $122 billion.
To reduce the large increase in debt caused by the tax cuts, President Trump has proposed slashing $1.7 trillion from Medicare, Medicaid, food stamps, housing assistance, assistance for people with disabilities, environmental protection, tuition aid and dozens of other important services. Round 2 tax cuts would give conservatives an excuse for still deeper cuts.
America cannot afford the Trump-GOP tax cuts benefitting the rich and corporations, and we sure cannot afford a Round 2 that puts the interests of the wealthy over everyone else while maintaining a lower tax rate on income earned from wealth compared to wages and salaries. We urge you to oppose an extension of TCJA tax cuts and instead support legislation to ensure that the wealthy and large profitable corporations pay their fair share so that we have the revenue needed to invest in our families and communities to strengthen public education, fix infrastructure, make healthcare more affordable, assist families in need of affordable childcare, housing, nutrition and other basics, and provide a secure retirement with dignity.
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9to5, National Association of Working WomenAFL-CIOAfrican American Health AllianceAlliance for Retired AmericansAlliance for Retired AmericansAlliance of BaptistsAmalgamated Transit UnionAmerican Family VoicesAmerican Federation of Government Employees (AFGE)American Federation of State, County and Municipal Employees (AFSCME)American Federation of TeachersAmerican Medical Student AssociationAmerican Postal Workers UnionAmericans for Democratic Action (ADA)Americans for Tax FairnessCampaign for America’s FutureCaring Across GenerationsCenter for American ProgressCenter for Community Change ActionCenter for Law and Social PolicyCenter for Medicare AdvocacyCenter for Popular DemocracyChildren’s Advocacy InstituteChildren's Defense FundChildren's Leadership CouncilCoalition of Labor Union WomenCoalition on Human NeedsCommunications Workers of AmericaCongregation of Our Lady of Charity of the Good Shepherd, US ProvincesCourage CampaignDaily KosDepartment for Professional Employees, AFL-CIODoctors for AmericaEconomic Policy Institute Policy CenterEcumenical Poverty InitiativeEndangered Species CoalitionFaith in ActionFaith in Public LifeForum for Youth InvestmentFriends of the EarthGlobal Justice Institute, Metropolitan Community ChurchesGlobal Policy SolutionsHealth Care for America NowHEAR US Inc.Hip Hop CaucusHoly Spirit Missionary Sisters, USA-JPICIndivisibleInstitute for Policy Studies - Program on InequalityInstitute on Taxation and Economic PolicyInternational Association of Machinists and Aerospace Workers (IAMAW)International Brotherhood of BoilermakersInternational Brotherhood of TeamstersInternational Union, United Automobile, Aerospace, and Agricultural Implement Workers of AmericaJobs with JusticeJPIC Committee, Passionists of North AmericaLoretto CommunityMain Street AllianceMedical Mission Sisters Justice and Peace OfficeMi Familia VotaMomsRisingMoveOnNational Asian Pacific American Families Against Substance Abuse (NAPAFASA)National Advocacy Center of the Sisters of the Good ShepherdNational Alliance of HUD TenantsNational Association of Letter Carriers (NALC)National Center for Lesbian RightsNational Coalition for Asian Pacific American Community Development (National CAPACD)National Coalition for the HomelessNational Committee for Responsive PhilanthropyNational Consumers LeagueNational Council of Gray Panthers NetworksNational Council of Jewish WomenNational Education AssociationNational Employment Law ProjectNational Health Law ProgramNational Korean American Service & Education Consortium (NAKASEC)National LGBTQ Task Force Action FundNational Low Income Housing CoalitionNational Nurses UnionNational Organization for WomenNational Partnership for Women & FamiliesNational Priorities Project at the Institute for Policy StudiesNational Women’s Law CenterNational Working Positive CoalitionNETWORK Lobby for Catholic Social JusticeOccupy AIDSOur RevolutionOxfam AmericaPatriotic MillionairesPeace and Justice Team of Congregation of St. JosephPeople Demanding ActionPeoples Action InstitutePoligon Education FundPositive Women's Network-USAPride at WorkProgressive Congress Action FundProsperity NowPublic Advocacy for KidsPublic CitizenResponsible WealthRESULTSRootsAction.orgService Employees International UnionSinsinawa Dominican Peace and Justice OfficeSisters of Divine ProvidenceSisters of Mercy South Central CommunitySMART Transportation DivisionSocial Security WorksSocioEnergetics FoundationState Innovation ExchangeSteelworkers Organization of Active RetireesStrategies for Youth, Inc.Sugar Law Center for Economic and Social JusticeTake on Wall StreetTASHTax MarchTeach PlusThe Advocacy InstituteThe International Federation of Professional and Technical Engineers (IFPTE)The John Leary OrganizationThe Leadership Conference on Civil and Human RightsTreatment Action GroupTurtle Island Restoration NetworkUnidosUSUnitarian Universalists for Social Justice (UUSJ)UNITE HEREUnited for a Fair EconomyUnited Steelworkers (USW)Voices for ProgressWorking AmericaWorking Families PartyXaverian Brothers