April 2024 - To Put Trickle-down Economics to Rest, We Need a New

Focusing on corporate and public power, labor and wages, and the economics of race and gender inequality, the Roosevelt Institute unifies experts, invests in young leaders, and advances progressive policies that bring the legacy of Franklin and Eleanor Roosevelt into the 21st century. [...] While the expiration of TCJA provisions creates an opportunity to revisit the tax code, today’s tax reform conversation need not, and should not, be confined to the boundaries of the TCJA’s provisions—with policymakers narrowly considering whether to return our tax code to its pre-2017 state or make current policy the permanent law of the land. [...] By 2011, the top 1 percent received 38 percent of the benefits of the Bush-era tax cuts—$700,000 in total over the course of a decade (Fieldhouse and Pollack 2011). [...] Between 1993 to 2017, the top corporate tax rate remained at 35 percent until the TCJA slashed it to a flat rate of 21 percent—the lowest it had been since 1939, at the end of the Great Depression.5 Finally, the TCJA cut the topmarginal income tax rate to 37 percent, dramatically increased the exemption for the Alternative Minimum Tax, and created a new deduction for pass-through income. [...] Between 2016 and 2018, the average tax rate for the top 5 percent fell by 9.5 percent, by 19 percent for the top 0.01 percent, and by 25 percent for the richest 400 (Saez and Zucman 2019).