As the election heats up, so does the debate about tax policy.
At the center of much of the tax conversation is former president Trump’s tax bill from 2017. The bill capped top taxable rate at 37%, increased the standard deduction (the portion of your income not taxed), doubled the Child Tax Credit to $2000, and lowered the corporate tax rate to 21%. “The goal was to try to spur investment,” said Richard Rubin, a tax reporter for the Wall Street Journal.
The individual tax cuts are set to expire at the end of 2025, and the two presidential candidates have different proposals for dealing with the expiration. According to The Tax Foundation, a nonpartisan tax policy organization, Trump would like to maintain the 21 percent corporate tax and make the individual tax cuts permanent. On the other hand, Vice-President Kamala Harris would like to increase the corporate tax rate to 28 percent, increase the Child Tax Credit to $6,000, and make permanent the individual tax cuts for those making under $400,000.
Was TCJA a Success?
Critics of the bill think it mostly benefited the rich. In a testimony before the Senate Committee on the Budget, Samantha Jacoby of the progressive Center on Budget and Policy Priorities said, “The tax cuts enacted in 2017 under President Trump benefited high-income households far more than households with low and moderate incomes.” Jacoby argued that TCJA failed because it added to the debt and hampered “our ability to invest in policies that broaden opportunity…”
Proponents of the bill thought that it was an economic benefit to the country. The center-right think tank American Enterprise Institute (AEI) says the bill, “provided a substantial boost to growth, consumption, and employment, with an especially large contribution to business investment.” Yet, AEI does recommend adjusting the bill so as not to “exacerbate the current budget deficit.”
What the Church Says About TCJA
In 2017, the United States Conferences of Catholic Bishops (USCCB) sent multiple letters to Congress and praised some elements of the bill and took issue with others. They lauded the increased standard deduction and child tax credit but criticized the amount of tax breaks wealthy individuals received. Tax policies, they said, “involve fundamental concerns of ‘justice and equity,’ with the goal of taxes and public spending ‘becoming an instrument of development and solidarity.’”
