Labor unions call for repeal of Trump tax cuts
Top U.S. labor unions are saying they’ve had enough of the Trump tax cuts and want them repealed.
Unions including the United Auto Workers (UAW), the AFL-CIO, the Service Employees International Union (SEIU), the Screen Actors Guild (SAG-AFTRA), and the National Education Association joined dozens of progressive groups on Tuesday in sending a letter to Congressional leaders that blasted the Trump cuts as unfairly designed and fiscally irresponsible.
The Trump tax law, known as the Tax Cuts and Jobs Act (TCJA), “made massive and permanent cuts to corporate taxes and temporary cuts to individual and estate taxes that have largely benefitted the wealthy and eroded tax revenues,” they wrote to Congressional leadership and the heads of the top tax-writing committees.
Individual provisions in the Trump tax cuts are set to expire next year and the 2024 election will determine whether they are renewed, modified or ditched altogether. The Congressional Budget Office (CBO) estimates that extending the individual cuts will cost $3.3 trillion through 2035.
But the unions, following the lead of some other progressive organizations, are saying they want to think beyond the will-they-won’t-they framework of the possible extensions and for the tax code to be overhauled.
“Tax reform must result in a more progressive tax code that asks higher-income and higher-wealth households, corporations, and Wall Street to pay a greater share of their income in tax than they would in the absence of the TCJA,” they said.
The Congressional Research Service (CRS) substantiated the union claims in 2019, finding that “the individual income tax cut largely went to higher-income individuals.”
The TCJA’s decrease in the corporate rate, which was dropped from 35 percent down to 21 percent, did not result in higher real wages for workers, which grew in 2018 by less than the overall growth in labor compensation.
“This … indicates that ordinary workers had very little growth in wage rates,” CRS determined.
One of the provisions set to expire next year is the inheritance and gift tax exemption regime, which was raised from $5.6 million to $11.8 million per individual. For 2024 the exemption is $13.61 million per individual or $27.22 million per married couple.
A reversion to previous levels “will result in a significant increase in the number of estates subject to federal estate tax and a higher estate tax liability for estates already subject to the estate tax,” according to an analysis by LPL Financial.
Conservatives have also proposed some unconventional big-picture tax reforms in recent years, notably an across-the-board 23-percent sales tax on all consumption that would replace the tax code.
“This is an idea whose time has come,”Rep. Buddy Carter (R-Ga.) told The Hill in an interview last week.
“Probably the most hated tax of all is the payroll tax,” he said. “We all recognize and realize that we have to pay taxes and we’ve got to support the government, but we would prefer a consumption tax where we can be in control.”
Tax cuts have been centerpieces of Republican economic policies for decades, with major reductions enacted during the Trump, Bush and Reagan administrations.