Major US labor unions say they are fed up with Trump's tax cuts and want them repealed.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 Tuesday in sending a letter to congressional leaders who denounced Trump's cuts as unfairly designed and fiscally irresponsible.
Trump's tax law, known as the Tax Cuts and Jobs Act (TCJA), “made massive and permanent cuts to corporate taxes and temporary reductions in personal and estate taxes, which have largely benefited the wealthy and eroded tax revenues” , they wrote to Congress. leadership and the heads of the highest tax commissions.
Individual provisions in Trump's tax cuts expire next year, and the 2024 election will determine whether they are extended, modified or eliminated altogether. The Congressional Budget Office (CBO) estimates that extending individual spending cuts through 2035 will cost $3.3 trillion.
But the unions, following some other progressive organizations, say they want to think beyond the will-they-won't-they framework of the possible expansions and call for an overhaul of the tax code.
“Tax reform should result in a more progressive tax code that asks higher-income, higher-net-worth households, businesses and Wall Street to pay a greater share of their income in taxes than they would without the TCJA,” they said . .
The Congressional Research Service (CRS) substantiated the unions' claims in 2019, finding that “the reduction in individual income taxes largely went to individuals with higher incomes.”
The TCJA's reduction in the corporate rate, which was lowered from 35 percent to 21 percent, did not result in higher real wages for workers, which grew less than overall labor wage growth in 2018.
“This … indicates that wages for rank-and-file workers grew very little,” CRS found.
One of the provisions that will expire next year is the inheritance and gift tax exemption regime, which was increased 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 return to previous levels “will result in a significant increase in the number of estates subject to the federal estate tax and a higher estate tax for estates already subject to the estate tax,” according to an analysis by LPL Financial.
Conservatives have also proposed a number of unconventional tax reforms on a large scale in recent years, most notably a 23 percent blanket sales tax on all consumption that would replace the tax code.
“This is an idea whose time has come,” said 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 that we have to support the government, but we would prefer a consumption tax where we have control.”
Tax cuts have been at the heart of Republican economic policy for decades, with major reductions implemented during the Trump, Bush and Reagan administrations.
