June 12, 2018

130 NATIONAL ORGANIZATIONS OPPOSE “ROUND 2” OF TRUMP-GOP TAX CUTS TO STOP ANOTHER MASSIVE GIVEAWAY TO THE WEALTHY

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 prticular, 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.

Sincerely,

9to5, National Association of Working Women

AFL-CIO

African American Health Alliance

Alliance for Retired Americans

Alliance of Baptists

Amalgamated Transit Union

American Family Voices

American Federation of Government Employees (AFGE)

American Federation of Musicians of the United States and Canada

American Federation of State, County and Municipal Employees (AFSCME)

American Federation of Teachers

American Medical Student Association

American Postal Workers Union

Americans for Democratic Action (ADA)

Americans for Tax Fairness

Campaign for America’s Future

Caring Across Generations

Center for American Progress

Center for Community Change Action

Center for Law and Social Policy

Center for Medicare Advocacy

Center for Popular Democracy

Children’s Advocacy Institute

Children’s Defense Fund

Children’s Leadership Council

Coalition of Labor Union Women

Coalition on Human Needs

Communications Workers of America

Congregation of Our Lady of Charity of the Good Shepherd, US Provinces

Courage Campaign

Daily Kos

Department for Professional Employees, AFL-CIO

Doctors for America

Economic Policy Institute Policy Center

Ecumenical Poverty Initiative

Endangered Species Coalition

Faith in Action

Faith in Public Life

Forum for Youth Investment

Friends of the Earth

Global Justice Institute, Metropolitan Community Churches

Global Policy Solutions

Health Care for America Now

HEAR US Inc.

Hip Hop Caucus

Holy Spirit Missionary Sisters, USA-JPIC

Institute for Policy Studies – Program on Inequality

Institute on Taxation and Economic Policy

International Association of Machinists and Aerospace Workers (IAMAW)

International Brotherhood of Boilermakers

International Brotherhood of Teamsters

International Union, United Automobile, Aerospace, and Agricultural Implement Workers of America (UAW)

Jobs with Justice

JPIC Committee, Passionists of North America

Loretto Community

Main Street Alliance

Medical Mission Sisters Justice and Peace Office

Mi Familia Vota

MomsRising

MoveOn.org

National Advocacy Center of the Sisters of the Good Shepherd

National Alliance of HUD Tenants

National Asian Pacific American Families Against Substance Abuse (NAPAFASA)

National Association of Letter Carriers (NALC)

National Center for Lesbian Rights

National Coalition for Asian Pacific American Community Development (National CAPACD)

National Coalition for the Homeless

National Committee for Responsive Philanthropy

National Consumers League

National Council of Jewish Women

National Education Association

National Employment Law Project

National Health Law Program

National Korean American Service & Education Consortium (NAKASEC)

National LGBTQ Task Force Action Fund

National Low Income Housing Coalition

National Nurses United

National Organization for Women

National Partnership for Women & Families

National Physicians Alliance

National Priorities Project at the Institute for Policy Studies

National Women’s Law Center

National Working Positive Coalition

NETWORK Lobby for Catholic Social Justice

Occupy AIDS

Our Revolution

Oxfam America

Patriotic Millionaires

Peace and Justice Team of Congregation of St. Joseph

People Demanding Action

Peoples Action Institute

Poligon Education Fund

Positive Women’s Network-USA

Pride at Work

Progressive Congress Action Fund

Prosperity Now

Public Advocacy for Kids

Public Citizen

Responsible Wealth

RESULTS

RootsAction.org

Service Employees International Union

Sinsinawa Dominican Peace and Justice Office

Sisters of Divine Providence

Sisters of Mercy South Central Community

SMART Transportation Division

Social Security Works

SocioEnergetics Foundation

Steelworkers Organization of Active Retirees

Strategies for Youth, Inc.

Sugar Law Center for Economic and Social Justice

Take on Wall Street

TASH

Tax March

Teach Plus

The Advocacy Institute

The International Federation of Professional and Technical Engineers (IFPTE)

The John Leary Organization

The Leadership Conference on Civil and Human Rights

Treatment Action Group

Turtle Island Restoration Network

UnidosUS

Unitarian Universalists for Social Justice (UUSJ)

UNITE HERE

United for a Fair Economy

United Steelworkers (USW)

Voices for Progress

Working America

Xaverian Brothers