CGI News: Tax panel should hear, "Let Trump tax cuts expire"

FOR IMMEDIATE RELEASE, THURSDAY AUG. 15, 2024

Let the Trump tax cuts for the rich expire
Hearing at Iowa State Fair avoids realistic appraisal of costly tax cuts

DES MOINES, Iowa – Political showmanship won’t obscure the reality of deficits, debt and inequity when the U.S. House Ways & Means chair stages a pro-Trump Tax Cut hearing at the Iowa State Fair on Friday.

“If the Trump tax cuts were a cow or a pig, you wouldn’t dare show it at the fair,” said Mike Owen, deputy director of the nonpartisan Common Good Iowa (CGI). “The failure of the policy is that great.”

The 2017 tax package passed under President Donald Trump is the topic of the field hearing scheduled for 9 a.m. at the fair. But committee Chairman Jason Smith, R-MO, has limited oral testimony to five invited witnesses to address “the positive impact and importance of the Trump Tax Cuts.”

Other views are limited to written submissions due to “limited time available.” But contrary views need to be heard, not only by members of Congress but the public.

“After years of damage, deficit, debt and deep inequity, we’ve seen enough of the Trump Tax Cuts. They haven’t been pretty. Their expiration in 2025 is a welcome sight,” Owen said.

Solid research has shown the Trump tax cuts – and the cuts passed under President George W. Bush in 2001 and 2003 – have escalated U.S. debt, at the same time granting the vast majority of benefits of the cuts to the highest earners.

What Smith and his State Fair audience may not hear, but should, is an examination of those points and alternatives that could better serve families, workers and small businesses who benefited little if any from tax cuts but are on the hook for generations of fresh debt.

“Economic growth and tax equity both would result from expanding the Earned Income Tax Credit and the Child Tax Credit, and extending enhanced premium tax credits for the Affordable Care Act marketplace,” Owen said.

In addition, CGI supports ending tax cuts for people making over $400,000, as scheduled, and raising more revenue from the wealthy and corporations to make investments that boost individuals, communities, and the nation’s fiscal standing by reducing deficits and debt.

Competent analysis has shown the 2017 tax cuts were skewed to the rich, with the top 1% getting an average tax cut of more than $60,000 in 2025, while the bottom 60% average less than $500.

In addition, the 2017 tax cuts are officially estimated to cost $1.9 trillion over 10 years and another $400 billion a year if the temporary income-tax and estate-tax cuts are made permanent.

“In Iowa, we should be on to this strategy,” Owen said, noting comparable results coming from the phase-in of a single-rate state income tax that treats the wealthiest most generously — nearly one-fifth of the benefit going to the top 1% and a little more than one-third to the bottom 85%, while setting up a loss of 20% of General Fund revenue in the near future.

At the national level, the Center on Budget and Policy Priorities noted, revenues as a share of the economy (GDP) dropped sharply from 19.5% before the Bush cuts in 2001 and 2003 to 16.3% following the Trump cuts, expected to average out at 16.9%.

“This is simply not enough revenue given the nation’s investment needs and our commitments to Social Security and health coverage,” the authors wrote.

 

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CONTACT: Mike Owen, Deputy Director, mowen@commongoodiowa.org