Opinion | The fight over taxes shows the enormous political stakes of the Trump-Biden election

For many Americans, the 2024 election is an unwelcome contest between the criminal and the friar. Voters feel that democracy is at risk, which is true but is also another potential reason for disillusionment.

Yet the stakes in choosing the key public policies that shape their lives are enormous, if less discussed.

Nowhere is this more true than when it comes to taxes. Whoever wins in 2024, the United States is on track for the largest and most consequential debate over future policy priorities since the Great Recession: The huge, ineffective, and favorable tax cuts signed by Donald Trump in 2017 should be extended beyond their limit ? expiration expected in 2025? And should the permanent corporate tax cuts in that bill be maintained even as it has become clear how little these corporate gadgets have done for the economy?

It is a choice between two fundamentally different visions of our country. If the Trump tax cuts are extended – which House Republican Majority Leader Steve Scalise recently said he would seek to do in the first hundred days of Trump’s second term – and the corporate tax cuts are not disturbed, our elected leaders will have locked-in priorities that the vast majority of Americans say they oppose. What’s worse is that Trump’s fiscal package will exacerbate the fiscal crisis of programs like Social Security and Medicare that are wildly popular, even among Republicans.

To understand what’s at stake, we need to go back to Trump’s first year in office. Republicans had one major legislative achievement: the tax cut bill they passed after barely failing to repeal the Affordable Care Act. The tax cuts were among the least popular major legislation Congress had considered in a generation.

To disguise its price tag and comply with budget rules, the bill’s architects, such as Paul Ryan, the former Speaker of the House, designed it as an exploitative mortgage. The most unpopular part – a massive corporate tax cut – was made permanent. Most of the rest would expire in 2025, just as a newly elected president and Congress would take office. The idea was that these tax cuts for American families would be politically impossible to reverse. As Mr. Ryan explained after leaving Congress, “We made temporary what we thought could be extended; “We made permanent what we thought couldn’t be extended and what we wanted to stay permanent.”

What Republicans thought couldn’t be extended were tax cuts that Americans didn’t like. The survey has constantly shown that voters’ biggest complaint about the tax code is that the rich and corporations don’t pay their fair share. Most Americans want taxes on these fortunate taxpayers raised. Instead, Republicans dramatically cut corporate taxes and made those corporate tax cuts permanent. They also combined small cuts for ordinary Americans with large cuts for the wealthy. Among the changes favorable to wealthy families: sizable cuts to the property tax, the top tax rate (which affects only married couples with at least $600,000 in taxable income) and taxes on “pass-through” business income (income that some types of business owners report on individual tax returns).

Corporate tax cuts were unpopular for a reason. They have funneled more than half of their benefits to the top 5 percent of Americans, and most of it has gone to the top 1 percent (as earnings and profits rise, they get distributed mainly to wealthy executives and capital owners). Corporate profits have risen, while corporate tax payments have plummeted. In the meantime, study after study you have shown that corporate cuts have done almost nothing to increase wages or jobs, except for the already sky-high salaries of top executives.

But here’s the dirty secret. The rest of the package of tax cuts – cuts to top rates, special treatment of “pass-through” business income and a greater estate tax exemption – was only slightly less inclined towards the rich. In fact, the extension of all these measures would offer a double advantage, in terms of percentage of income, to the families of the richest 1% compared to the families of the poorest 60%: 48,000 dollars per family versus 500 dollars.

No wonder the tax law was not popular. After the cuts took effect, 86% of Democrats and 61% of Republicans She said the law had not changed their taxes or actually increased them. When asked who benefited from the law, the most common answers were large corporations and the wealthy.

The disconnect between these policies and voter preferences is much deeper. No matter how often anti-tax ideologues say it, tax cuts don’t pay for themselves. They must be financed through cuts to other programs or higher deficits – the same deficits that tax cut advocates often cite as inflationary (presumably their biggest economic concern) when calling for spending cuts. And this is where tax cuts clash most directly with citizens’ preferences.

Supporters of tax cuts say the United States has a spending problem, not a revenue problem. But this is all backwards. True, the United States must make crucial investments in the future, and, yes, an aging population will put pressure on popular programs like Social Security, Medicare, and Medicaid. But right now, low revenues are primarily responsible for persistent deficits. In fact, we could finance such investments and programs relatively easily if we could get revenues back to the levels they were at before the tax-cutting spree of Republicans Bush and Trump.

This is due to a remarkable and often overlooked success story: Health care cost growth has slowed so dramatically that federal health spending continues to fall within projections. Medicare spending per beneficiary has remained essentially unchanged for more than a dozen years—a cumulative savings to the federal government of nearly $4 trillion. In 2012, the Congressional Budget Office projected that federal spending would account for 22% of the economy in 2035. Seven years later, it projected that spending would rise to 21% of the economy by that date.

Due to Trump’s tax cuts, revenue projections have rapidly gone in the opposite direction. The 2012 forecast stated that federal tax revenues would account for 23% of the economy in 2035, producing a current account surplus. After the tax cuts, the Budget Office projected that revenues would absorb only 18.5% of the economy. Since 2018 (excluding the pandemic years), federal revenues have averaged less than 17% of the economy.

Extending the 2017 law would make matters worse. According to the Congressional Budget Office, a full extension would be desirable blow a $4.5 trillion hole in the budget over the decade between 2025 and 2034. To put this figure into context, the bipartisan 2021 infrastructure bill called for just over half a trillion dollars in new investments.

If the tax cuts are made permanent, there will be no way to sustain, much less improve, the programs that Americans say they want and need. In poll after poll, Americans put Social Security, Medicare, Medicaid, and even the decidedly unattractive goal of deficit reduction over tax cuts. If the tax cuts were to win, it would represent a clear failure to address the concerns of the American people.

Why do Republicans think they can win? Because they already did it. In 2001 and 2003 they passed the largest tax cuts since the Reagan years. These tax cuts were less skewed toward the wealthy than Trump’s, but they were still extremely biased toward the wealthy and ran counter to public fiscal priorities. Yet, despite Democrats regaining control of the House and Senate and the election of Barack Obama in 2008, more than 80 percent of these tax cuts have been made permanent, leaving a deep gap in federal revenues that the tax cuts of Trump have only made it worse. If you want to understand why the United States faces such a backlog of investment and threadbare social programs, look at these choices.

It has proven too easy for Republicans to frame the debate around whether or not they support tax increases. Democrats are aware of the charge of raising taxes. And of course some Democrats are not immune to political pressure from powerful interests benefiting from these tax cuts.

They have to do better this time. Next year, those who want a fairer system will have a unique moment of leverage. Republican supporters of the 2017 law extension would have to justify and negotiate every aspect of the tax law they imposed in 2017, including permanent corporate tax cuts passed to appeal to business lobbies and donors.

So far, President Biden has taken a reasonable stance – no extension of tax cuts for families with incomes of $400,000 or more, and a higher (but still modest) corporate tax rate – and Democrats in Congress appear to mostly more online.

They are in a strong position because of what increased tax revenue can do. Letting tax cuts for the rich expire is itself an extremely popular position. It is even more popular when paired with new initiatives of the type outlined by President Biden, including universal pre-kindergarten, help for first-time homebuyers and paid family and medical leave. All of these ideas have majority support not only among Democrats, but also among Republicans.

Especially important is the expansion of the Child Tax Credit (which reduced child poverty nearly in half when it was expanded for one year in 2021) and the increase in tax credits for health insurance under Affordable Care Act. These ideas can be framed as tax cuts. This is important, because too often Democrats fight against tax cuts for the rich by promising abstract benefits in the future. The fight would be easier if it pitted tax cuts for ordinary Americans against tax cuts for the rich.

The tax fight that will take place in 2025 will not just be about creating a fairer tax code that can fund the government Americans deserve. It will also be about democracy: whether our elected officials pursue an agenda that meets what Americans want.

Jacob S. Hacker of Yale and Paul Pierson of the University of California, Berkeley, are professors of political science and authors of “Let them eat the tweets​: How the Right Rules in an Age of Extreme Inequality.”

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