A Fair Share Tax System is the Only Way We Can Build America Back Stronger
Today, Americans for Tax Fairness Action Fund issued an analysis of Democratic presidential nominee Joe Biden’s tax proposals and compared them with President Trump’s tax law passed in 2017 and Trump’s future plans for tax law changes.
“Joe Biden’s tax plan would raise substantial revenue over the next decade to help create an economy that works for all of us, and not just billionaires and the rich,” stated Frank Clemente, Executive Director of Americans for Tax Fairness Action Fund. “In the midst of a global pandemic, job losses, sky-high unemployment and every day Americans losing their homes, jobs and livelihoods, a tax plan that makes the wealthy and corporations pay their fair share is the smart way to rebuild America over the long-term.”
Biden’s plans will make the American tax system much fairer by increasing taxes on the rich and corporations, raising substantial revenue needed to improve public services and making new investments to build an economy that works better for everyone. Working families, small businesses and communities will all benefit from these plans, while billionaires and big corporations will pay something closer to their fair share of taxes.
“We’ve seen an unprecedented growth in billionaire wealth under President Trump and billionaires have made out like bandits while the rest of America continues to struggle during the COVID-19 Pandemic,” added Clemente. “Joe Biden wants the wealthy and big corporations to start paying their fair share of taxes and build America back better and stronger than ever. The health care crisis and economic crash caused by the pandemic, and the protests for racial justice across America, all show that our economy is not working for everyone.”
America’s 650 billionaires have seen their wealth grow by one-quarter or by $800 billion since the beginning of the pandemic, according to an analysis of Forbes data by Americans for Tax Fairness and the Institute for Policy Studies.
Go here for fact sheets on the Biden tax plan and Trump’s initiatives on taxes.
Under Biden’s tax plan:
- $4 trillion will be raised to strengthen Social Security; make healthcare, childcare and housing more affordable; strengthen our schools and help families afford college; and build a modern, sustainable infrastructure and green manufacturing sector. Biden will not directly tax households making less than $400,000 a year, according to nonpartisan fact checkers at the Washington Post and PolitiFact.
- Trump’s tax cuts benefitting the wealthiest Americans and corporations will be repealed, but Biden will preserve and strengthen tax cuts for working families.
- The corporate tax rate will increase to 28%, after Trump nearly cut it in half from the original 35% rate, and several major reforms will be enacted such as an Offshoring Tax Penalty to stop outsourcing and bring jobs back to America.
- Those making more than $1 million a year will be required to pay the same tax rate on income from selling stock and other assets as workers pay on their wages and salaries. A huge tax loophole will be closed that lets the wealthy pass along fortunes in stock and other assets to their kids without paying taxes on the increase in the value of those assets.
- Social Security will be strengthened by having high-income earners contribute more, putting $1 trillion towards increasing benefits for low-income seniors and enabling the program to pay full benefits for decades longer.
Under President Trump, the wealthy and big corporations have received windfalls due to sweeping tax breaks:
- In 2017, President Trump and Republicans in Congress rammed through a $2 trillion tax cut that mostly benefited the wealthy and corporations. Go here for a Chartbook showing the economic effects of Trump’s tax cuts.
- Trump and the GOP in Congress gave the rich another huge tax cut in the first major pandemic relief package that became law in March. It benefits 43,000 millionaires who are getting an average tax cut of $1.6 million this year. It costs more money—$135 billion—than the pandemic relief package gave in aid to hospitals and public health ($100 billion) or in aid to distressed families, including food and housing services ($42 billion).
- Trump proposes to cut by one-quarter the top capital gain tax rate paid when the wealthy sell their assets; 99% of the tax cut will go to the richest 1%. Go here for a fact sheet.
- Trump is endangering seniors’ Social Security benefits through his payroll tax cut and his suggestion that he may do away with payroll taxes altogether. Go here for a fact sheet.
“Donald Trump’s $2 trillion tax cuts have been great for billionaires and giant corporations but lousy for working families,” Clemente commented. “He lied to get it passed, saying it would benefit the middle-class more than the wealthy, corporations would give their workers a $4,000 pay raise, and it would pay for itself through unprecedented growth. We could sure use that $2 trillion right now to help recover from the pandemic recession. Now he wants to double-down with a huge tax cut for the wealthy who sell their stock and other assets. The stakes are very high with an unprecedented health care crisis, a crashed economy, massive wealth inequality and the need to help remedy systemic racism. You can’t fix these problems by using Trump economics and showering the wealthy and corporations with tax breaks. A fair share tax system is the only way forward,” concluded Clemente.
Americans for Tax Fairness Action Fund (ATFAF) was founded on the belief that our tax system is rigged in favor of the wealthy and big corporations, and that it is not working for most Americans. We believe it is time for the wealthy and big corporations to pay their fair share of taxes so that we can create an economy that works for all of us.