Trump Tax Plans Could Harm Pennsylvania, Says Nonprofit Group

Article Summary –

In 2017, President Trump and Republican allies enacted the Tax Cuts and Jobs Act, significantly reducing taxes for large corporations and the wealthiest individuals, with minimal benefits for middle and low-income earners, leading to calls from some affluent beneficiaries for increased taxes on the wealthy. Critics like Ritchie Tabachnick argue that the tax cuts failed to spur economic growth, slowed job creation, and led to wage stagnation, with the main beneficiaries being those involved in stock buybacks, while proposed further tax cuts could worsen economic inequality and undermine essential government programs. Analyses by institutions like Goldman Sachs and the Congressional Budget Office predict that extending these tax cuts would harm GDP growth, increase inflation, result in job losses, and add trillions to the national debt.

President Donald Trump and Republican allies passed a 2017 law that reduced taxes for large corporations and wealthy individuals. As they aim to expand the Tax Cuts and Jobs Act, many affluent beneficiaries now urge Congress to increase taxes on the wealthy.

Ritchie Tabachnick, a retired executive from Pennsylvania, is part of Patriotic Millionaires, a nonprofit coalition advocating for livable wages and tax reform.

Tabachnick said he was the only employee benefiting from the tax cuts, while middle-income employees gained nothing. “It didn’t change my life,” he noted. “It gave me a few extra bucks for investments.”

Trump’s law permanently lowered corporate taxes and temporarily reduced individual rates, mainly for those earning $500,000 or more until 2025. Though Trump claimed it would benefit middle-income families, low-income earners saved about $60 annually, while top earners saved over $190,000.

An October 2024 analysis by the Institute on Taxation and Economy Policy indicated that extending Trump’s tax policies would increase taxes for most, except the top 5% earners. The wealthiest 1% would average a $36,000 cut, while the bottom 20% would pay $790 more.

Republican leaders Mike Johnson and John Thune support these proposals, arguing they will boost economic growth, considering cuts to programs like Medicaid and clean energy to fund the tax cuts.

Tabachnick, referencing data from the Federal Reserve and other sources, said the economy saw nil benefit from the tax cuts; job growth slowed, and wages stagnated. Making the law permanent could mean less corporate investment and more stock buybacks, benefiting the wealthy.

He stressed the importance of infrastructure and a social safety net, stating, “Investing in infrastructure enables business. Without a social safety net, we face instability.”

A September Goldman Sachs analysis predicted that Trump’s policies might reduce GDP, hike inflation, and cut job growth. A December Congressional Budget Office assessment warned that extending the tax cuts could add $4.6 trillion to the national debt, shrinking the economy over time.