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unrig our economy
Project 2025 Would Lower Taxes for Rich, Hike Them for Everyone Else: Analysis
"This analysis lays bare how the extreme, conservative Project 2025 plan is more of the same from conservative leaders—delivering handouts to the wealthy and corporations on the backs of working people."
Aug 28, 2024
The Center for American Progress on Tuesday released an analysis of the tax plans in Project 2025, a right-wing manifesto whose authors have close ties to Republican presidential nominee Donald Trump, showing that conservatives aim to lower taxes on corporations and the rich while raising them on working- and middle-class Americans.
The liberal research and advocacy group, which published the analysis as part of a series of in-depth articles on Project 2025, found that the right-wing plan would raise income taxes for the median family of four by about $3,000, cut taxes by at least $1.5 million for a household earning more than $10 million per year, on average, and cut the corporate tax rate to 18% from 21%, an already historically low rate instituted by Republicans in 2017.
The analysis, authored by Brendan Duke, a senior director of economic policy at CAP, shows that, of households with a married couple and two children, only those earning more than $170,000 per year would see a tax break under the Project 2025 plan.
"This analysis lays bare how the extreme, conservative Project 2025 plan is more of the same from conservative leaders—delivering handouts to the wealthy and corporations on the backs of working people," Kobie Christian, a spokesperson at Unrig Our Economy, an advocacy group, said in a statement.
Project 2025’s income tax plan would increase taxes on middle class families. Only families making over $170,000 would get a tax cut.
cc: @amprog pic.twitter.com/O76weQ9MGm
— Steven Rattner (@SteveRattner) August 27, 2024
The Project 2025 plan would consolidate seven tax brackets into just two—15% and 30%—on the grounds that it would "simplify" the tax code. However, CAP says that the existing number of tax brackets don't create any additional complexity and are easily dealt with by tax-filing software. Moreover, 70% of tax filers only deal with the two lowest tax brackets—10% and 12%—"so they effectively are already in a two-bracket system," Duke wrote.
CAP's findings about the impact of Project 2025's tax proposals on median earners are in keeping with those of the Democrats on the U.S. congressional Joint Economic Committee, who released a similar analysis earlier this month.
CAP included projections of the impact that Project 2025 would have on median income earners in each state and in the District of Columbia. Only in D.C., a high-earning area, were median earners projected to pay lower taxes under the right-wing plan; in all 50 states, their taxes went up.
It's unclear how popular the Project 2025 tax plans would be. Polling from Navigator Research, a progressive polling firm, in February showed that the vast majority of Americans favor increasing taxes on the rich and large corporations.
In addition to the immediate tax plans laid out above, Project 2025 also puts forth a long-term plan to replace all income taxes with a value-added tax—a flat, regressive proposal endorsed by some U.S. House Republicans. In addition to the injustice of such a plan, it may also be impractical. CAP found that it would require a value-added tax—similar to a sales tax—on everything, even essential items such as groceries and healthcare, of at least 45%, if it were to replace lost government revenues, and warned that this would cause inflation.
Project 2025 policy agenda is a 920-page manifesto written by right-wing groups including the Heritage Foundation. The plan has drawn intense media attention in recent months and has proven unpopular with the American public, leading Trump, who was president from 2017 to 2021, to repeatedly try to distance himself from it. However, 140 of his former administration officials helped create the manifesto.
Stephen Moore, a Heritage Foundation fellow and an outside economic adviser to Trump, helped write Project 2025 tax plan, according to Duke. Moore drew scrutiny this week for questioning the need for the child tax credit.
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'No Surprise': Big Pharma Sues Biden Over Effort to Lower Drug Prices for Americans
"This legal action underscores how critical it is to have a president in the White House who will fight for lower health costs for Americans," said U.S. Sen. Ron Wyden.
Jun 21, 2023
Aiming to protect wealthy pharmaceutical companies from any reduction in their tens of billions of dollars in annual profits or lavish CEO compensation packages, the industry's biggest lobbying group on Wednesday announced a lawsuit against the Biden administration over its policy allowing Medicare to negotiate lower drug prices for consumers.
Part of the Inflation Reduction Act that was passed last year, the Medicare negotiation provision has been a key demand of progressives including Sen. Bernie Sanders (I-Vt.) for several years, as the United States pays more per person for prescribed drugs than any other country and nearly a third of Americans said in one survey last year that they have avoided taking medications due to costs.
Although a Congressional Budget Office analysis found last year that allowing Medicare to negotiate lower drug prices would save the U.S. nearly $290 billion in new revenue and savings over a decade, the Pharmaceutical Research and Manufacturers of America (PhRMA) on Wednesday became the latest pro-industry group to sue over the provision, arguing the law is unconstitutional.
PhRMA argued in a court filing in the Western District of Texas that the provision violates the constitutional requirement for checks and balances by placing too much authority in the hands of the U.S. Department of Health and Human Services (HHS), the due process clause by denying drug companies input regarding pricing, and the Eighth Amendment's ban on "excessive" fines due to the excise tax Big Pharma companies will be required to pay if they refuse to negotiate.
Senate Finance Committee Chairman Ron Wyden (D-Ore.) said it was "no surprise" that pharmaceutical companies want to stop Medicare from saving millions of senior citizens out-of-pocket costs—and warned that they'll likely be successful if a Republican candidate wins the presidency in 2024.
"I expect the Biden administration to vigorously defend Medicare's bargaining power so seniors will see the lower drug prices they expect," said Wyden. "This legal action underscores how critical it is to have a president in the White House who will fight for lower health costs for Americans. I have deep concerns that a Republican administration would roll out the red carpet for Big Pharma and once again ban Medicare from negotiating lower drug prices."
PhRMA was joined by the National Infusion Center Association and the Global Colon Cancer Association in the legal challenge, which follows a lawsuit filed by drugmaker Merck earlier this month. The U.S. Chamber of Commerce and Bristol Myers Squibb have also sued over the provision this month, with the latter claiming, as PhRMA did Wednesday, that the law is "bad for innovation."
"We remain very concerned about the impact this law will have on patients and future innovation," PhRMA CEO Steve Ubl said.
The economic justice campaign Unrig Our Economy said Big Pharma is fighting any provision to help Medicare beneficiaries "while hardworking families struggle to pay for lifesaving medicine."
\u201cWish we were shocked but we're not \n\nWhile hard working families struggle to pay for life saving medicine, @PhRMA , @Merck\u00a0 and @bmsnews, and @USChamber are suing the government for letting Medicare negotiate for lower drug prices\n\nhttps://t.co/GN02FLksUK\u201d— Unrig Our Economy (@Unrig Our Economy) 1687364021
PhRMA is seeking a permanent injunction to stop the negotiation process, three months before the government is scheduled to choose the first 10 drugs to which the provision will apply. The new prices are set to take effect in 2026.
"We will vigorously defend the president's drug price negotiation law, which is already helping to lower healthcare costs for seniors and people with disabilities," a spokesperson for HHS told The Hill. "The law is on our side."
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Fed Critics Say New CPI Data Shows Rate Hikes Can't Stop 'Rampant Corporate Profiteering'
"The Fed's overly aggressive actions are shoving our economy to the brink of a devastating recession," said one economist.
Oct 13, 2022
As data released Thursday shows inflation kept climbing in September even after the U.S. Federal Reserve raised interest rates yet again, progressives reiterated that the nation's central bank is ill-equipped to tackle the root causes of rising prices and urged Congress to rein in corporate greed before further rate hikes throw millions of people out of work and help crash the global economy.
"It's time for Chair Powell and the Fed to step aside and for Congress to step in."
According to the Bureau of Labor Statistics, the overall consumer price index (CPI) rose 0.4% last month and is up 8.2% from a year earlier. The monthly increase was driven by soaring rent, grocery, and healthcare prices. The annual rate of change has been fueled largely by historic spikes in the cost of food and energy, which critics attribute to price gouging and the destabilizing effects of the Covid-19 pandemic, the war in Ukraine, and the climate crisis on global supply chains.
Core CPI, which excludes food and energy, increased 0.6% for a second consecutive month and is up 6.6% compared with last year, reaching its highest level since 1982.
"Today's inflation report is proof of what we've been saying for months: Raising interest rates isn't working," Rakeen Mabud, chief economist at the Groundwork Collaborative, said in a statement.
"Supply chain bottlenecks, a volatile global energy market, and rampant corporate profiteering can't be solved by additional rate hikes," Mabud continued. "The Fed's overly aggressive actions are shoving our economy to the brink of a devastating recession."
While core CPI reached a 40-year high last month, corporate profit margins are also at record levels.
\u201cAs you look at today's #CPI numbers, remember that last month, @business reported that corporate profit margins were the highest they've been since the 1950s...\n\nCorporate America is jacking up prices for small businesses and working families way above their rising costs.\u201d— American Economic Liberties Project (@American Economic Liberties Project) 1665664464
As Sarah Baron, campaign director for the advocacy group Unrig Our Economy, detailed in a Wednesday column at OtherWords, companies are boosting their profits by keeping prices artificially high:
General Mills hiked its prices five times since June of 2021 alone, and the company saw its net earnings climb 31% to $820 million in the first quarter of the 2023 fiscal year. Darden Restaurants, the company which owns popular chains such as Olive Garden and Longhorn Steakhouse, saw its net sales increase by $140 million to over $2.4 billion in the first quarter of FY 2023. As AutoZone saw record sales growth over the past two years, with net income increasing to $810 million, their CEO admitted the company is not racing to lower prices. Instead, they boosted their shareholder handouts by spending $1 billion on stock buybacks during the quarter, bringing their total to $4.4 billion during FY 2022.
During Monday's meeting of the National Association for Business Economics, Fed Vice Chair Lael Brainard acknowledged that "large increases in retail trade margins in several sectors" is a significant factor behind surging prices.
"The return of retail margins to more normal levels," said Brainard, "could meaningfully help reduce inflationary pressures in some consumer goods."
Nevertheless, Fed Chair Jerome Powell has indicated that the central bank's plan for reducing prices is to depress consumer demand by continuing to raise interest rates to drive up unemployment and push down wages.
Thursday's CPI report has only intensified expectations of further rate hikes, with investors anticipating more turbulence in financial markets. Meanwhile, Labor Department data also published Thursday shows that jobless claims rose last week for the second consecutive week, and researchers are warning of more impending layoffs.
Provoking a recession that causes an estimated 1.5 million Americans to lose their jobs by the end of next year and undermines the bargaining power of labor is, according to Powell's estimation, acceptable if it tames inflation.
But as Mabud and others have argued, including in front of House lawmakers last month, the blunt instrument of interest rate hikes leaves the underlying causes of supply shortages and profiteering unaddressed.
It is possible to curb skyrocketing prices without hurting workers by intentionally plunging the nation--and potentially the world--into a recession, progressives contend, if Congress takes action.
"The inflation crisis we're facing today is due to decades of deregulation and privatization--resulting in brittle supply chains that can't handle shifts in our economy without supply shortages and bottlenecks," Mabud recently told members of the House Committee on Oversight and Reform. "A ruthless pursuit of efficiency and short-term profits... left us vulnerable to profiteering and price increases."
"Giant corporations' control over our supply chains has supplanted the functioning, resilient system we could have built through robust public investment and free and fair competition," she continued. "Big corporations are getting away with pushing up prices to fatten their profit margins, and families are quite literally paying the price. It's time to rein them in."
During the same hearing, former U.S. Labor Secretary Robert Reich urged Congress and the Biden administration to confront corporate profiteering directly through a windfall profits tax of the sort introduced months ago by Sen. Bernie Sanders (I-Vt.), stronger antitrust enforcement, and temporary price controls.
In her Thursday statement, Mabud said, "Now that Fed officials are finally recognizing the role of profiteering, it's time for Chair Powell and the Fed to step aside and for Congress to step in."
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