SUBSCRIBE TO OUR FREE NEWSLETTER
Daily news & progressive opinion—funded by the people, not the corporations—delivered straight to your inbox.
5
#000000
#FFFFFF
5
#000000
#FFFFFF
congressional budget office
US Wealth Gap Report Fuels Call to 'Unrig Our Tax Code'
"This report should add urgency in Congress as the Trump tax scam expires next year and we negotiate future tax legislation," said Senate Budget Committee Chair Sheldon Whitehouse.
Oct 02, 2024
As a Capitol Hill battle over the "GOP tax scam" looms, U.S. Senate Budget Committee Chair Sheldon Whitehouse on Wednesday pointed to a new nonpartisan government analysis about soaring wealth inequality as proof of the need for serious reforms.
Whitehouse (D-R.I.) sought the Congressional Budget Office (CBO) report, which details trends in the distribution of family wealth—including projected Social Security retirement and disability benefits—in the United States from 1989 to 2022.
"Adjusted for inflation, the wealth held by families in the United States almost quadrupled between 1989 and 2022, rising from $52 trillion (in 2022 dollars) to $199 trillion, at an average rate of about 4% per year," the CBO found. "Over that 33-year period, family wealth was unevenly distributed, and that inequality increased."
"In 2022, families in the top 10% of the distribution held 60% of all wealth, up from 56% in 1989, and families in the top 1% of the distribution held 27%, up from 23% in 1989," the office said. "The share of wealth held by the rest of the families in the top half of the distribution shrank from 37% to 33% over the same period. Families in the bottom half of the distribution held 6% of all wealth in both 1989 and 2022."
"By making the wealthy pay their fair share, we can protect Social Security forever and unrig our tax code."
The report comes as Congress prepares for a tax debate due to next year's expiration of policies signed into law in 2017 by then-President Donald Trump, the Republican facing Democratic Vice President Kamala Harris in this November's election.
Throughout the current election cycle, Trump and congressional Republicans have campaigned on extending policies from the Tax Cuts and Jobs Act, which slashed the corporate tax rate from 35% to 21% and also benefited wealthy individuals.
"This report should add urgency in Congress as the Trump tax scam expires next year and we negotiate future tax legislation," Whitehouse said of the CBO analysis. "Do we want to reward billionaires, who have already captured so much of the nation's wealth, or do we want to de-corrupt the tax code, ensure the wealthy and big corporations pay their fair share, and reduce the deficit, all while making necessary investments to better the lives of all Americans?"
Whitehouse noted that the report also comes amid concerns about the future of Social Security. Citing the CBO analysis, his office detailed:
- Social Security is essential to the retirement security of low middle- and lower-income families: Without this earned benefits program, the bottom half of families would hold just 3% of overall wealth, while the top 10% of families would control nearly 70%.
- If Social Security were allowed to go insolvent, families in the bottom half of the wealth distribution would lose 10% of their wealth, while the wealth of the top 1% of families would be essentially unchanged.
"Social Security is a bedrock of our retirement system and ensures millions of seniors can retire with dignity," Whitehouse said. "Seniors earned their benefits throughout their working lives, but the program is now facing a looming cash flow problem. By making the wealthy pay their fair share, we can protect Social Security forever and unrig our tax code—exactly what my Medicare and Social Security Fair Share Act would do."
Whitehouse's bill is spearheaded in the lower chamber by U.S. House Budget Committee Ranking Member Brendan Boyle (D-Pa.), who also recently requested a CBO report. That one focuses on the impact of raising the full retirement age for Social Security from 67 to 69, as various Republican groups have proposed.
The CBO's Social Security analysis, released last week, found that for workers now in their 30s and 40s, the average annual benefit cut would be around $3,500 a year—and the GOP's proposed changes wouldn't even extend the program's solvency.
"This independent, nonpartisan report shows just how devastating Republican plans to rip away hard-earned Social Security benefits would be for American workers," Boyle said last week. "Instead of saving Social Security by making the ultrarich pay their fair share, the GOP is hell-bent on gutting benefits for the middle class."
Keep ReadingShow Less
CBO: GOP Social Security Plan Would Cut Benefits by Thousands, Not Extend Solvency
"Their goal is to destroy our Social Security system," one advocate for seniors said of Republican politicians.
Sep 25, 2024
Social Security defenders have long argued that former Republican U.S. President Donald Trump's return to the Oval Office could spell disaster for seniors, and a nonpartisan government analysis released Wednesday bolsters their warnings.
U.S. House Budget Committee Ranking Member Brendan Boyle (D-Pa.) asked the Congressional Budget Office (CBO) to analyze the impact of raising the full retirement age (FRA) for Social Security from 67 to 69, as various Republican groups have proposed.
"This report shows that raising the retirement age to 69 would slash benefits by an average of $3,500 a year," Social Security Works executive director Alex Lawson told Common Dreams. "For seniors and people with disabilities, that means not being able to buy groceries, pay a heating bill, or buy birthday presents for their grandkids."
"This cruel benefit cut would hit those who claim benefits early—largely people who work on their feet, not those who work in offices—the hardest," Lawson noted. "Even worse, it is only one of the benefit cuts that Republicans are backing. Their goal is to destroy our Social Security system."
As CBO Director Phillip L. Swagel wrote to Boyle:
All people affected by such an increase in the FRA would receive a smaller amount of Social Security benefits over their lifetime. Workers who chose to delay claiming their retirement benefits by the same number of months as the increase in the FRA would receive the same monthly benefit for a shorter period. Those workers who claimed retirement benefits at the same age as they would have claimed them under current law would receive a smaller benefit for the same number of years.
In a statement responding to the report, Boyle's office highlighted that "for workers currently in their 30s and 40s who are subject to the full retirement age increase, the average annual benefit cut would be 13%, or around $3,500 a year."
As the congressman's office pointed out, the CBO also found that "though increasing the retirement age would reduce spending, it would not create enough savings to change the expected exhaustion date of the Social Security Trust Fund, which is projected to be unable to pay full benefits by the end of fiscal year 2034."
Boyle and Senate Budget Committee Chair Sheldon Whitehouse (D-R.I.) have introduced the Medicare and Social Security Fair Share Act, which would extend the solvency of both programs by requiring Americans with higher incomes to pay more than they do now.
"Social Security is a sacred promise that after a lifetime of hard work, Americans have earned the right to retire with dignity," Boyle said Wednesday. "This independent, nonpartisan report shows just how devastating Republican plans to rip away hard-earned Social Security benefits would be for American workers."
"Instead of saving Social Security by making the ultrarich pay their fair share, the GOP is hell-bent on gutting benefits for the middle class," he warned, specifically calling out the congressional Republican Study Committee and the Heritage Foundation, which is behind Project 2025. "Democrats will never stop fighting to keep the promise of Social Security and defend Americans' retirement security from Republican attacks."
The CBO report comes less than six weeks away from the U.S. general election. Democratic Vice President Kamala Harris is facing Trump in the race for the White House.
Before President Joe Biden left the contest and passed the torch to Harris, the National Committee to Preserve Social Security & Medicare, National United Committee to Protect Pensions, and Social Security Works Political Action Committee were backing him over Trump. All three groups have endorsed Harris.
"As president, Biden has been an unwavering protector of Social Security and Medicare," Social Security Works president Nancy Altman wrote in a July opinion piece for Common Dreams. "Harris will be as fierce a defender, and she will do more. She will expand Social Security and Medicare and ensure that all benefits will continue to be paid in full and on time for the foreseeable future by requiring billionaires to pay their fair share."
"In stark contrast, Donald Trump and his Republican allies in Congress are a serious threat to our earned benefits and to our families," she stressed, also warning of the GOP's positions on medication prices and tax breaks for the rich. "A vote for Democrats is a vote to expand benefits, lower prescription drug prices, and require those billionaires to start paying their fair share."
Keep ReadingShow Less
Extending Trump Tax Cuts Would Add $4.6 Trillion to Deficit: CBO
"We can't afford 10 more years of giveaways to the wealthy and corporations and fail to invest in the people who drive our economy," said the head of Groundwork Collaborative. "This tax law should expire."
May 08, 2024
As former U.S. President Donald Trump and congressional Republicans campaign on extending their 2017 tax cuts if elected in November, a government analysis revealed Wednesday that doing so would add $4.6 trillion to the national deficit.
When Trump signed the Tax Cuts and Jobs Act during his first term, the initial estimated cost was $1.9 trillion. Last year, the Congressional Budget Office (CBO) projected that extending policies set to expire next year would cost $3.5 trillion through 2033.
The new CBO report—sought by U.S. Senate Budget Committee Chair Sheldon Whitehouse (D-R.I.) and Senate Finance Committee Chair Ron Wyden (D-Ore.)—says continuing the income, business, and estate tax cuts will now cost $4.6 trillion through 2034.
"The Republican tax plan is to double down on Trump's handouts to corporations and the wealthy, run the deficit into the stratosphere, and make it impossible to save Medicare and Social Security or help families with the cost of living in America."
Responding in a statement Wednesday, the senators cited an Institute on Taxation and Economic Policy (ITEP) estimate that "extending the Trump tax cuts would create a $112.6 billion windfall for the top 5% of income earners in the first year alone."
They also slammed their GOP colleagues, who Whitehouse said "are awfully eager to shield their megadonors from paying taxes."
He recalled that just last year, "Republicans held our entire economy hostage," refusing to raise the debt ceiling and risking the first-ever U.S. default, because they didn't want the Internal Revenue Service to get more funding to "go after wealthy tax cheats."
"Remember the Trump tax scam cutting taxes for billionaires and big corporations," Whitehouse continued. "Now they're set on extending those tax cuts, even though it would blow up the deficit. The Trump tax cuts were a gift to the ultrarich and a rotten deal for American families and small businesses. With their impending expiration, we have a chance to undo the damage, fix our corrupted tax code, and have big corporations and the ultrawealthy begin to pay their fair share."
Wyden similarly took aim at the GOP, warning that "the Republican tax plan is to double down on Trump's handouts to corporations and the wealthy, run the deficit into the stratosphere, and make it impossible to save Medicare and Social Security or help families with the cost of living in America."
"Republicans have planned all along on making Trump's tax handouts to the rich permanent, but they hid the true cost with timing gimmicks and a 2025 deadline that threatens the middle class with an automatic tax hike if they don't get what they want," he argued. "In short, they're focused on helping the rich get richer, and everybody else can go pound sand. Democrats are going to stand by our commitment to protect the middle class while ensuring that corporations and the wealthy pay a fair share."
Groundwork Collaborative executive director Lindsay Owens also responded critically to the CBO report, saying Wednesday that "extending Trump's tax law and effectively subsidizing corporate profiteering and billionaire wealth is a nonstarter."
"This tax law, on top of decades of failed trickle-down cuts, has come at the expense of workers and families," Owens stressed. "We can't afford 10 more years of giveaways to the wealthy and corporations and fail to invest in the people who drive our economy. This tax law should expire."
While some of the tax cuts in the 2017 law are temporary—unless they get extended—the legislation permanently slashed the statutory corporate tax rate from 35% to 21%. As
Common Dreamsreported last week, a new ITEP analysis shows that tax rates paid by big and consistently profitable corporations dropped from 22% to 12.8% after the law's enactment.
Keep ReadingShow Less
Most Popular