Washington, D.C. — The 2017 tax law was fundamentally flawed, increasing income inequality while putting upward pressure on the debt for little payoff. Looking ahead to the 2025 tax debate, a new Center for American Progress report outlines four key principles progressives should follow when evaluating any tax package next year.
The original 2017 Republican-passed law was a mistake. It added hundreds of billions of dollars to the annual deficit, disproportionately benefiting the top 10 percent of Americans and largely ignoring low-income families. As President-elect Trump and congressional Republican leadership prepare to extend these tax cuts again, this report highlights four principles that policymakers should use while evaluating any tax package in 2025 and explains why these principles are crucial to supporting working- and middle-class families—and not giving handouts to America’s richest families. The four principles are as follows:
- A tax package should not increase income inequality, including through how it is financed.
- A tax package’s extensions of the 2017 law and any new tax cuts should be fully offset with tax increases on high-income households.
- A tax package should not reduce the tax code’s horizontal equality.
- A tax package should not erode investments in future American economic competitiveness.
“The bottom line is that the 2017 tax law was fundamentally flawed and extending these tax cuts will only further increase income inequality. Policymakers should focus on a package that does not increase income inequality and does not lose revenue while preserving horizontal equity in the tax code and protecting investments in American competitiveness. These principles will help policymakers do just that,” said Brendan Duke, senior director of economic policy at the Center for American Progress and author of the report.
Read the report: “Progressive Principles for the 2025 Tax Debate: Having No Deal is Better Than Having a Bad Deal” by Brendan Duke, Bobby Kogan, and Jessica Vela
For more information or to speak with an expert, please contact Sarah Nadeau at [email protected].