New Tax Cuts Hurt Virginia’s Working Families
Several weeks have passed since Republicans joyfully passed a tax bill that will saddle our country with $1.5 trillion in debt and make it harder for working families to make ends meet. While they will insist that this bill creates bigger paychecks for everyone, in reality it is a giveaway for large corporations and billionaires.
While many Virginians may initially see small increases in their take-home pay, this bill ensures that middle-class tax cuts will only be temporary — and that middle-class families will permanently pay for the cuts later. The nonpartisan Institute on Taxation and Economic Policy estimates that the bottom 60 percent of Virginians will see their taxes increase by nearly $200 in 2027 while the top 1 percent will see a cut of $7,400.
This is just one example of how hugely skewed this bill is in benefiting millionaires and billionaires over working families, and why the nonpartisan Tax Policy Center estimates that 83 percent of the benefits of the bill go to the top 1 percent of taxpayers (those who are making more than $460,000 per year).
We know from experience that tax cuts have never paid for themselves, so this is just the beginning. Once our national debt begins to rise as a direct result of this massive tax cut, the president and congressional Republicans will come after Medicare, Medicaid and your hard-earned Social Security, in addition to cutting services for children, students, seniors, veterans and other key programs.
They will say that the burgeoning deficit we now face can only be paid for by cutting these vital services, but these cuts would not be necessary if the tax cuts had not passed.
This is the Republican playbook: complain about our growing debt; cut taxes, adding trillions to the deficit under the false pretense that growth alone will fix it; and when the tooth fairy doesn’t pay for the drastic tax cuts, turn around and cut the pillars of the social safety net. It is the epitome of hypocrisy to say that our national debt is our most pressing issue and then pass a bill that adds $1.5 trillion (and maybe hundreds of billions more when the dust settles) to the national debt.
Instead of focusing on simplifying the tax code, or making it more fair for working Americans, or reducing the deficit, this bill does the exact opposite. It creates vast new special-interest loopholes, creates a child tax credit that hands thousands of dollars to a family of four earning $400,000 a year but gives just $75 to a single parent of two earning $14,500 a year, and pretends that unheard-of levels of economic growth will pay for the budget hole they have created.
While cutting taxes by $1.5 trillion will undoubtedly produce some economic growth, every credible economist agrees that this is the worst way to do it. Republicans’ favored think tank, the Tax Foundation, estimates that their tax cuts will produce 339,000 jobs. This pitiful number means that we will be spending $4.1 million per job.
To get the best “bang for our buck,” we must consider where else $1.5 trillion could have been spent. Other studies have estimated that an infrastructure bill would create 15,000 jobs for every $1 billion invested. At that rate, instead of 339,000 jobs, investing $1.5 trillion in our nation’s infrastructure would create more than 20 million jobs.
We’ve unfortunately been down this road before. In 2001, Congress was debating what would happen if the debt held by the public was paid off, as projected at the time to occur in 2008. Instead of keeping on the path to paying off the debt and shoring up Social Security and Medicare, Congress passed massive tax cuts in 2001 and 2003, fought two wars and passed the Medicare Part D prescription drug benefit without any plan for how to pay for these costly endeavors.
Basic arithmetic reveals the truth — we could not afford massive tax cuts 17 years ago, and we certainly cannot afford them now. We are forcing the next generation to pay for lessons we should have learned years ago.
Ultimately, the middle class will be forced to pay for this bill, either directly or indirectly. Only the top 1 percent will be spared. Tuition will continue to skyrocket, health care premiums will rise, and our roads, bridges and schools will continue to decay.
It should not go unnoticed that Republican leaders in Congress have already set their sights on “entitlement reform” — better known as cuts to Social Security and Medicare. So it is simple arithmetic — tax cuts for the wealthy will be paid for by cuts in those important programs.
By passing this bill, the president and congressional Republicans have shown that they will always prioritize millionaires, billionaires and large corporations over working families. The American people deserve better from their elected officials.