Earlier this month, the Senate and the House of Representatives released their respective versions tax reform bills. Both plans resemble the Tax Cuts and Jobs Act proposed by the Trump Administration back in September. The tax plan garnered a significant amount of negative press and reviews due to the abundance of obvious tax cuts and breaks for the rich. Similarly, the plans introduced by the Senate and the House of Representatives will result in a reduction of the corporate tax rate, and in some cases, lower income tax rates as well.
However, a group of wealthy lawyers, doctors, and CEOs, many of them members of the top 1%, have joined together to request that Congress refrain from cutting their taxes. The group of “high net worth individuals” represents Responsible Wealth, a project comprised of the wealthiest business leaders and inheritors in the United States. A partner of United for a Fair Economy, Responsible Wealth has crafted a letter expressing steadfast opposition to the Trump Administration’s proposed tax plan.
The letter specifically references the fact that the Republican tax plan would add a whopping $1.5 trillion to the already burgeoning US debt crisis. Responsible Wealth believes that cutting taxes for the wealthy could be damaging to the community by hindering the progress made by programs such as Medicare and Medicaid, as well as by hindering access to quality education.The Republican tax reform bill will provide unfair benefits for the wealthy and “further exacerbate inequality.”
According to Responsible Wealth, the best way to establish a strong economy in a country where the top 1% holds 42% of the nation’s wealth, is to invest in the American people. The letter criticizes the legislative branch saying,”Congress is already shortchanging the investments needed to strengthen our economy.” This progressive letter, which has been signed by nearly 400 millionaires and billionaires, including Steven Rockefeller and the founders of Ben and Jerry’s Ice Cream, actually asserts that taxes on the wealthy should be increased in order to raise revenue for critical services.
Republicans defend their heavily criticized tax bill by asserting that tax breaks for the wealthy will lead to more job opportunities at the factories and businesses the rich will open if the bill is passed. However, Bob Crandall, former CEO of American, Airlines, refutes this. “I have a big income. If my income gets bigger I’m not going to invest more, I’ll just save more,” Crandall said as he spoke with The Washington Post. In this case, the lower and middle classes would never see any of the supposed benefits of the tax breaks for the wealthy, listed in the Republican tax plan.
Criticism from the Democrats and the signers of the Responsible Wealth project’s letter hasn’t produced enough momentum to slow the tax bill’s progress. Because the Republicans still have the majority advantage in the House, the tax bill is likely to pass next week. In fact, there are 239 Republicans in the House of Representatives, and only 218 votes are needed for the bill to be passed. Very few Republicans have outwardly opposed the tax bill.
If the letter produced by the members of Responsible Wealth successfully persuades members of Congress, only then can the average American expect to reap the benefits of a tax plan that continues to incur revenue by taxing the wealthiest 1% at a higher rate.
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