Repealing the 2017 tax cuts would not just hurt the wealthy and corporations. It would also leave middle-class Americans tens of thousands of dollars poorer.
Reversing the tax cuts would cost the typical American worker $26,900 over the following 10 years. And families would be hit even harder: A family of four would lose, on average, $45,700 in take-home pay over the same period.
Those leading the charge against the tax cuts would have you believe it will only affect the rich. But repealing the tax cuts would hit the heart of Middle America.
Former Vice President Joe Biden has now called for a repeal of the 2017 Tax Cuts and Jobs Act six times. His latest proposal is to use the higher taxes to pay for his climate change plan, which in key ways resembles the Green New Deal. Others want to overturn the tax cuts to serve their pet causes. For example, Rep. Rosa DeLauro, D-Connecticut, proposes to undo the tax cut to help pay for an astronomically expensive Medicare for all proposal.
These proposals would hike taxes on middle-class Americans as well as businesses. Not only would most taxpaying families see more of their paycheck going to Washington, but most businesses would need to dial back plans to raise wages and add jobs — and many would have to cut back in both areas.
Right now, Americans are using their higher take-home pay for things like college tuition, a down payment on a house, or to cover the costs of starting a family. Repealing the tax cuts would take their money away and limit their future economic opportunity.
It would also hurt citizens in both of Biden’s backyards: his birth state of Pennsylvania and his home state of Delaware. Based on IRS data, The Heritage Foundation estimates that the average Pennsylvania and Delaware resident would lose nearly $20,000 if Biden has his way.
In fact, the data show that Americans in every congressional district would be worse off.
It is shameful that a simple soundbite — “Trump’s tax cut for the rich” — has eclipsed the truth. The tax cuts are benefiting Americans at every income level. Even some of the poorest congressional districts have received upwards of 20 percent income tax cuts.
Repealing the tax cuts wouldn’t just mean sending more of your earnings to the IRS. It would also slow the economy, which would mean lost wage growth in the coming years.
New investment is the lifeblood of a growing economy. When businesses invest, they also add jobs, increase productivity, and bring new products to market.
An important part of tax reform was to lower the corporate income tax rate to 21 percent. This is not a giveaway to investors. Sure, they benefit, but so does every single worker who is now able to find a job and pull a higher wage.
Before tax reform, the U.S. had the highest corporate tax rate in the world. Because of that, businesses chose to invest in foreign workers and foreign firms over those in the U.S. The newly lowered corporate tax rate, and new rules for immediate expensing (which encourage greater investment), have reversed that trend.
Unemployment is at historic lows, there are more job openings than people looking for work, and wages have grown above 3 percent for 10 straight months.
Even if repeal efforts fail, the 2017 tax cuts are not safe indefinitely. The most pro-growth provisions begin to expire in three short years. Lawmakers should be working to control the growth rate of spending so that the tax cuts can be made permanent in a fiscally responsible way.
Full repeal of the tax cuts would lead to fewer jobs, lower wages, and less opportunity for Americans who need it most.
Pro-growth policies have helped bolster the good economic times, it is imperative to build on the successes of the 2017 tax cuts so that taxes stay low on all Americans and their employers.
Adam N. Michel is a senior policy analyst in The Heritage Foundation’s Hermann Center for the Federal Budget. Travis Nix is a member of the think tank’s Young Leaders Program. This column was distributed by the Tribune News Service.