Unearthed Facts: The Trump-Biden Battle Over The 2017 Tax Cut
One of the significant talking points in the political landscape of the United States in recent years has been the 2017 Tax Cuts and Jobs Act. This massive tax reform was one of the hallmark agendas of the Donald Trump administration. However, recent developments under the current presidency of Joe Biden have brought this tax reform back into the limelight.
At the heart of the dispute is the impact of the 2017 tax reform on businesses and average American citizens. The Trump administration touted the Tax Cuts and Jobs Act as a critical resource for increasing business investment, spurring economic growth, and putting more money into the hands of the American populace. Yet, critics, including Joe Biden, have pointed out that the implications of this act were more advantageous to corporations and the wealthier individuals rather than the average American taxpayer.
The Tax Cuts and Jobs Act reduced the corporate federal income tax rate from 35% to 21% and allowed for 100% depreciation of certain business assets. The administration argued that this significant reduction would encourage more businesses to invest within the United States and create more jobs. Indeed, the Congressional Budget Office noted an initial uptick in business investment immediately following the tax reform.
However, critics contend that the increase in business investment was short-lived and did not live up to the promises made by the Trump administration. Moreover, an analysis by the Tax Policy Center indicated that the tax cuts largely benefited the wealthiest households. This conclusion was reached by comparing tax benefits received by different income groups. The wealthiest 20% benefitted from an almost 65% share of the total tax cut which stands in stark contrast to the meager 1% benefit accorded to the lowest 20%.
Among the biting critiques of this act is the reasonable assertion by the Biden administration that the 2017 tax reform contributed significantly to the national debt of the United States. With the tax reform causing a decline in the corporate tax revenue, the Congressional Budget Office estimated an increase of $1.9 trillion in the national debt over a ten-year period.
The Biden administration has put forward proposals to raise corporate taxes to 28% partly as a course correction from the 2017 act. The intention is to ensure a fair distribution of tax burden and to add revenue to fund significant public works and social programs, such as the planned infrastructure update.
Underlying this heated debate are the fundamentally different economic philosophies of the Trump and Biden administrations. Trump leaned towards a supply-side or trickle-down approach with the understanding that cutting taxes for corporations and the wealthy would catalyze investments and economic growth benefiting all Americans. Conversely, Biden adopts a more demand-side view, stressing the need for public investment funded by more equitable taxation to stimulate economic growth and job creation.
In conclusion, the debate surrounding the 2017 Tax Cuts and Jobs Act indicates the ongoing tension between different approaches to economic and social policy. Given the potential consequences, it is evident that this will remain a robust discussion in the coming years. The impact of the decisions made today will undoubtedly shape the tax landscape and socio-economic health of the U.S. for the foreseeable future.