Repealing Trump’s Tax Cut Would Bring in Billions—and 2020 Democrats Want to Put That Cash to Use

From Medicare for All, to the Green New Deal and funding infrastructure improvements, the presidential candidates have a lot of ideas for that money.

Mother Jones illustration; ZUMA

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Monday is Tax Day, the last day of the year to file your returns to the IRS, and the first time people will see how their rates have changed after President Donald Trump signed a massive tax cut bill in December 2017. Your rates might not change all that much, since the $1.9 trillion tax package tilted heavily toward reducing rates for the wealthy and corporations.

But those tax cuts might not stick around too long. The Democrats vying for their party’s 2020 nomination have hammered the Trump administration for pushing tax cuts for the rich, with a number of candidates vowing to roll back the law. At the same time, some have proposed ambitious ideas for government assistance program that could be paid for by reversing parts of Trump’s Tax Cuts and Jobs Act. 

Trump has lauded the “massive tax cuts” since the law was passed in 2017 and pushed them as a catalyst to stir economic growth, even as White House officials recently conceded that the cuts wouldn’t sustain the long-term growth he’s looking for. The tax cuts have also become increasingly unpopular among voters—a RealClearPolitics average of tax law polling found that just 36 percent of voters approved the 2017 law. 

Every Democrat running for president who was a member of Congress when the tax bill came up voted against the measure, and it’s become a consensus among the candidates that the cuts needed to be rolled back. And since the tax cuts were funded by deficit spending, getting rid of them would leave a large pot of money that a future Democratic president could use to fund new programs, and the 2020ers are pushing ambitious plans to boost the social safety net, ranging from Medicare for All to teacher raises and affordable child care. 

The calls from 2020 Democrats to raise taxes on wealthy households and preserve middle-class tax cuts feel like deja vu: A little more than a decade ago, Democrats vying for the presidential nomination made proposals when former president George W. Bush’s tax cuts were on the verge of expiring.

Seth Hanlon, a senior fellow at the left-leaning Center for American Progress, noted that while the candidates’ approaches are similar now, the circumstances of the two cuts were different. With the Bush tax cuts, the emphasis was on changes to individuals, whereas many cuts to personal rates are set to expire by the end of 2025, while corporate tax rate cuts would remain permanent.

He noted that the 2020 Democratic candidates are recognizing that the 2017 law was an “egregious giveaway” to wealthy Americans and that there’s an appetite for taxing large wealth and boosting people’s incomes through tax credits. “The worst aspect is not that the tax cuts increase the deficit by $2 trillion. It’s that it increases the deficit by $2 trillion with little to show for it,” Hanlon says. “Replacing them with investments like universal child care or infrastructure, things that actually improve people’s lives, is a better approach.” That approach also appeals to voters by making direct investments to them rather than relying on the more trickle-down approach under the current law. 

While many of the candidates are willing to attack the Trump tax cuts broadly, so far they’ve been less willing to delve into specifics about which parts of the law they would try to get rid of and which they would keep, such as possibly keeping some of the law’s rate reductions for low-income and middle-class families.

Here’s a look at what some 2020 presidential hopefuls would do about Trump’s tax cuts. 

Kamala Harris 

Last year, the California senator pitched repealing and replacing the 2017 tax cuts. Back in October, Harris introduced the LIFT the Middle Class Act, a bill that would offer annual cash payments to middle class households, in part by reversing the tax cuts. The Tax Policy Center projects that Harris’ plan would cost $2.8 trillion over 10 years. 

In March, in what would be a shift in the federal government’s role in offering teachers better pay, Harris proposed an ambitious $315 billion plan to give teachers pay hikes by raising “the estate tax for the top 1 percent of taxpayers” and close loopholes “that let the very wealthiest, with estates worth multiple millions or billions of dollars, avoid paying their fair share.”

Cory Booker 

Like the other Democratic candidates, the New Jersey senator would roll back the Trump tax cuts “that benefit the wealthiest Americans and large corporations at the expense of ordinary Americans” and he’d use the money to support expanding the Earned Income Tax credit, a move that a campaign aide told Mother Jones would “put money in the pockets of working families and giving small businesses and teachers tax breaks instead of corporations.” 

Specifically, a Booker campaign aide noted that “reforms to federal estate and inheritance taxes” could pay for one of Booker’s signature plans: the American Opportunity Accounts Act, introduced in the Senate last December, under which the federal government would throw money toward the savings accounts for newborns in the United States known as “baby bonds” each year until they turn 18, with more money going toward lower-income families, ultimately with the aim of closing the stark racial wealth gap. 

Amy Klobuchar 

In late March, the Minnesota senator pitched a plan to invest $1 trillion into fixing roads, highways, and other ailing parts of the nation’s infrastructure in part by “adjusting the corporate tax rate” to 25 percent and closing loopholes that “encourage US companies to move jobs and operations overseas.” The proposal acts as a rebuke to Trump’s own $1.5 trillion infrastructure plan that has sputtered in his first term. Klobuchar’s campaign did not respond to questions from Mother Jones about what parts of the law the candidate would change. 

Kirsten Gillibrand 

In November 2017, the New York senator criticized the GOP tax legislation as a “harmful plan that could increase taxes on middle-class families in order to give big tax cuts to big corporations and the wealthiest Americans.” A Gillibrand campaign spokesperson told Mother Jones that the 2020 hopeful supported a “complete reversal of the corporate tax cut and the reinstitution of the estate tax.” 

Gillibrand would make the middle-class tax cuts from the bill permanent, given that individual tax breaks are set to expire in 2025, but would reverse Trump’s “massive corporate tax cut” and “ensure that the tax code doesn’t reward businesses that ship jobs and resources overseas,” according to the campaign aide. Like Booker, she wants to expand the earned income tax credit along with Child and Dependent Care Tax Credit, a tax break for child care expenses. Gillbrand’s spokesperson also suggested that the money could be turned toward paying for ideas like the “Green New Deal, Medicare For All, affordable child care” and other programs.

Elizabeth Warren

Last July, Massachusetts Sen. Elizabeth Warren called on rolling back corporate tax cuts, telling CNBC that the GOP move revealed the Republican Party’s values: “To give $1.5 trillion away to the richest Americans and the biggest corporations, and let everybody else pick up the crumbs.”

What she would do with the money from that rollback is another question. A Warren aide told Mother Jones that Warren supported reversing “tax giveaways for the big billionaires and big corporations,” but did not get into specifics of which parts of the tax law she would keep and which she would want to ditch. 

Warren, like Sanders, has pitched aggressive plans that would raise taxes for wealthy households and corporations and generate money for the federal government. In January, Warren proposed a targeted 2 percent “ultra-millionaires tax” on households that make more than $50 million, with another 1 percent on those bringing in more than $1 billion. The Warren aide noted that some of the revenue from that tax could go toward universal child care. The rest could go toward “student loan debt relief, and down payments on a Green New Deal and Medicare for All,” according to the campaign website. And just last week, Warren proposed a 7 percent tax on corporations making more than $100 million. 

Bernie Sanders 

At a CNN town hall in February, when asked how he would pay for his ambitious policy proposals, Sanders told the crowd he would make companies pay their “fair share” of taxes. The Vermont senator in January proposed an expansion of the estate tax that Sanders campaign aides told the Washington Post would bring in $315 billion over 10 years. That plan, along with other tax changes, could pay for Sanders’ Medicare for All bill, which was co-sponsored by 2020 hopefuls like Booker, Gillibrand, Harris, and Warren. 

Another way would be to repeal the GOP tax law. A Sanders campaign spokesperson told Mother Jones that Sanders saw the Trump tax cuts as a “massive giveaway to Wall Street, wealthy Republican campaign contributors, and large, profitable corporations.” 

Like other candidates, Sanders could use the rollbacks to the Trump tax cuts as a way to open up a funding stream to pay for a host of programs. For the Vermont senator, that could include proposals like Medicare for All and Free College for All. “Bernie believes that we must repeal the Republican tax breaks for the rich, and finally enact real reform that helps working families struggling to get by in this country,” the spokesperson said in a statement. 

Beto O’Rourke

Like other candidates who were in Congress when the GOP tax bill was passed, O’Rourke voted against it when it went through the then-Republican-controlled House. At a town hall in Iowa on April 4, the former Texas congressman told the crowd that he continues to oppose the Trump tax cuts, noting that the “$2 trillion tax break to the very wealthiest, to corporations sitting on record piles of cash” came at the expense of the national debt, ailing infrastructure, and unaffordable health care.

“At a time of extraordinary income and wealth inequality, we could begin by rolling back the worst excesses of the Trump tax cuts,” O’Rourke told the crowd. 

A campaign aide for O’Rourke pointed to another moment during the town hall, when O’Rourke said that the corporate tax rate, which was slashed from 35 to 21 percent under Trump’s law, should be changed to the “mid-20s,” which, he says, would “generate $400-500 billion over the next 10 years to begin to invest in some of the needs we have as a country.” The aide did not elaborate on what the money would be used for. 

Jay Inslee 

Washington state’s governor has positioned himself as the candidate most committed to making climate change a dominant issue during the 2020 cycle. He’s supported attempts to establish a carbon tax and told PBS Newshour‘s Judy Woodruff in March that he pushed for a capital gains tax in Washington because “we need a fairer system to end inequality.” 

“We know we need to roll back the Trump tax cuts,” Inslee said. “And we know, in general, we should have a fairer tax system for working people.”

An Inslee spokesperson told Mother Jones in a statement that the governor wanted to roll back the Trump tax cuts and use that money toward paying for “a full-scale mobilization of the federal government to convert our economy to one run on clean energy.” The spokesperson did not respond to further questions on what that would mean. 

Image credit, from left: Tom Williams/ZUMA, Kristin Callahan/ZUMA, Paul Boucher/ZUMA, Jack Kurtz/ZUMA, Richard Ellis/ZUMA

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