Repeal of TCJA for Working Class Americans

Democrats in Congress have advocated for a wholesale repeal of the tax cuts provided under the 2017 Tax Cuts and Jobs Act (TCJA) as a way to generate revenue that could be used to benefit working Americans who are struggling in the wake of the COVID-19 pandemic despite federal assistance. Repealing those tax cuts could result in an increase in the top income tax rate and the corporate tax rate—in addition to proposals to increase capital gains tax rates for the wealthiest Americans.

We asked two professors and authors of ALM’s Tax Facts with opposing political viewpoints to share their opinions about a wider repeal of the 2017 tax cuts.

Below is a summary of the debate that ensued between the two professors.

Their Votes:







Bloink











Byrnes





Their Reasons:

Bloink: We have to face facts here. The wealthy in this country who prospered before the pandemic became even more wealthy during the pandemic. On the other hand, millions of hard-working Americans are struggling only to put food on the table and relying more on social assistance than ever before. Unwinding tax cuts for the wealthy would free up funds to expand the child tax credit, reduce housing costs and invest in this nation’s crumbling infrastructure.

Byrnes: Punishing successful Americans for their success isn't going to do anything to help this economy. We're just beginning to emerge from a pandemic that impacted everyone, rich or poor. Now is the time to be investing in the businesses that provide jobs and fuel this economy. Increasing taxes now will make it more difficult for all businesses and individuals to succeed.

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Bloink: The TCJA tax cuts for big corporations and wealthy Americans didn't have the trickle-down impact that Republicans advertised. Now, it's time to take a new approach. Instead of giving tax cuts to wealthy investors and corporations, we should focus on building this country's infrastructure to create jobs. In conjunction with that, we should invest in programs that allow hard-working Americans to pursue those jobs—including more expansive child and dependent care benefits.

Byrnes: Raising capital gains taxes and eliminating benefits for investors is going to derail our economic recovery. These taxpayers have no obligation to invest in our economy. They have the means to sit on their wealth and wait for the next regime change in Washington. Raising taxes won't have the impact that Democrats claim because of that very fact alone.

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Bloink: Rather than funneling money to the rich in the form of tax cuts and incentives, we should eliminate tax cuts that haven’t worked as planned and put those federal funds to use in another place. Wealthy taxpayers consider issues aside from taxes when making investment and money management decisions. Channeling funds from reversing tax cuts into infrastructure projects and social programs would benefit the hardworking Americans who need help the most right now.

Byrnes: If we’re really being realistic, we must recognize that wealthy Americans have options. They’re going to take the most favorable option from a tax and financial perspective. If that means taking no action in the face of sky-high capital gains taxes, they’ll do just that—and we all know that the tax code gives wealthy Americans plenty of legitimate ways to reduce taxable income, so they aren’t paying at the highest income tax rate. This type of uncompetitive tax landscape will serve to hurt everyone as high net worth taxpayers focus more on tax minimization strategies than strategies to grow this economy.