The 2017 tax law is getting worse

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In 2017, the Republican Party controlled the White House and both Houses of Congress. Four years later, however, the Democrats barely do it. Your to-do list is long. The nation is facing new crises of public health, violent extremism and democratic integrity. The older problems have hardly disappeared since then.

One problem that has gotten off the headlines is economic inequality. It remains – in fact, the pandemic has exacerbated it. And it is closely related to other pressing issues. Will the new congress accept it?

The GOP’s reign gave birth to just one important piece of legislation: the 2017 tax cuts. The bill was advertised as a tax break for everyone and was largely a gift to businesses. The relief for individuals ranged from modest to nonexistent. And those were just the immediate provisions. The worst was to take effect later after the public’s attention was caught.

To ensure passage, the invoice was attached to the Filibuster-safe budget process. The budget rules provide for short-term but not long-term deficits. The authors of the bill could reduce tax revenues – as long as they offset this with increases that occur later. The specific increases they choose reveal their priorities.

The earliest changes are subtle and technical. A shift in the way the IRS measures inflation means that every wage increase will make people’s tax rates rise faster than their purchasing power. And starting this year, the bill’s repeal of Obamacare’s individual mandate will reduce access to tax-subsidized health care.

The tremendous change comes in 2025, when the individual income tax cuts – which apply to ordinary wage earners – gradually come to an end. However, the corporate tax cuts are permanent. While there is an honest debate about optimal tax rates, there is no excuse for a legislative handout from companies billing low-income Americans.

And there is no time for them to pay higher taxes. The economic crisis has devastated small businesses and jobs, while largely sparing the rich and their stock portfolios. People need money in their pockets – to earn rent, pay for the bare minimums and give companies reasons to rent again. There is an urgent need for an economic equality agenda and a key element is fairer tax legislation.

Newly empowered Democrats are under activist pressure on this front. Is bipartisan action possible? Maybe not, but it should be. The populist turn in conservatism was at times ideologically incoherent and coherently racist to others. But the populists are right that Americans are being squeezed by elites – business elites. And these economic elites should also be concerned about inequality because it leads to political instability and strife.

Perhaps such pragmatic concerns will drive lawmakers to bring us back from this golden age. That moral worry would do it. We cannot allow lawmakers to continue making savings on important social programs and valuable public resources. We cannot accept a tax reform that promises low-income Americans a mile, delivers an inch, and then quietly takes the inch back if no one is paying attention. American politics has changed a lot in recent years. Will it change enough for our leaders to stop turning to wealthy interests?

A version of this article appears in the print edition under the title “A Bad Law Gets Worse”.