Tax cuts cost the treasury trillions
By Josh Hoxie
A trillion dollars, a figure with 12 zeros after a one, is by any measure a ton of money. It’s near impossible to comprehend how much a trillion is.
So, it’s admittedly hard to comprehend a new report that tallies the combined tax cuts of the Bush, Obama, and Trump administrations from the year 2000 to the time they’re fully implemented in 2025 at over $10 trillion. Of that $10 trillion, the Institute on Taxation and Economic Policy found, a whopping $2 trillion will have gone exclusively to the top 1 percent.
Sounds like big numbers, huh?
The Endowment for Human Development offers some tidy tips for visualizing a trillion. They point out that if you took a trillion one-dollar bills and laid them end-to-end, it would measure longer than the distance from the earth to the sun.
Spending a trillion dollars, at a rapid-fire clip of $20 per second, would take more than 1,500 years before you ran out of money.
So yes, when we’re talking about trillions, we’re talking about a lot, a lot, a lot of money. And what this new report really shows is a metric-ton of cash going to the already exceptionally wealthy. That’s a problem.
The past four decades have seen a dramatic increase in income and wealth inequality as the rich have continued to get richer while the rest of the economy has stagnated. The lopsided tilt of the tax code plays no small part.
As this new report points out, it’s not just the Trump tax cuts. Bush cut taxes too, especially for the rich, and Obama extended many of the Bush tax cuts.
And at last the results have arrived. Put very simply, the top 1 percent of households will pay $111 billion less this year alone in federal taxes combined than they would have if the laws had remained unchanged since 2000.
The Trump tax cuts have rightfully generated a tremendous amount of press coverage. A lot of that press coverage has accurately pointed out that the tax cuts overwhelmingly benefit the rich. Trump’s claims that his tax package would usher in wage and job growth have been proven utterly false. Instead, the wealthiest households and most profitable corporations have gotten big tax breaks while everyone else remains relatively stagnant.
Why should you care about the tax status of the ultra-wealthy?
Consider what gets lost when funds are diverted from the public good to private fortunes.
Since the Trump cuts were passed last December, Congress has debated a budget that includes major cuts to Medicaid, Medicare, and Social Security. They’ve considered cuts to programs families depend on to live – like Supplemental Nutrition Assistance Program (SNAP) and the Women, Infants, and Children (WIC) program, which provides nutrition assistance to half the babies born in the United States.
It’s not an exaggeration to say that choosing to cut taxes on the rich while cutting vital programs is taking food out of babies’ mouths.
Meanwhile, our nation’s transportation infrastructure is in shambles. The American Society of Civil Engineers gives the country’s infrastructure a D+ and calls for $2 trillion in increased investment over 10 years to get back up to a passing grade. That number sounds familiar doesn’t it?
So, ask yourself, would you rather have the wealthiest 1 percent be $2 trillion wealthier, or would you rather have safe and sound roads and bridges?
Josh Hoxie directs the Taxation and Opportunity Project at the Institute for Policy Studies.