America’s national media typically pay little attention to the moves the nation’s state lawmakers make. This year is different. These state legislative battles have been a top-tier national story in recent months. It is rightly so. The battling at the state level — on a tidal wave of proposed new voter-suppression laws — could well determine the course of American democracy.
State legislators are not just trying to suppress voter turnout, but they are also threatening democracy. In one state after another, legislators have been advancing and enacting tax cuts that pump more dollars into rich people’s pockets — and fix in place more plutocratic power over the political process.
Arizona’s tax cuts last year were a good example. figure to deliver 55.5 percent of their benefits to the state’s top 1 percent. Arizonans with incomes above half a billion dollars will see an average $30,000 savings on their tax bills. On average, $13 in savings will be achieved by taxpayers with incomes between $21,000 to $40,000
In Arkansas, among other tax changes, lawmakers chopped the highest state income rate — on income over $37,200 — from 5.9 to 4.9 percent. The state’s overall tax changes will save the poorest 20 percent of Arkansas taxpayers an average $17 each. Households in the state’s top 1 percent will averageTax savings of $10,000.
Kansas is a state that should have known better. It’s a similar story. A decade ago, the state’s right-wing governor gave taxpayers of means a massive tax break that cratered state revenues and, relates Wesley Sharpe of the Center on Budget and Policy Priorities, “forced schools to shift more costs on to parents and teachers” and “left millions of people without health insurance.” The Kansas economy, meanwhile, would see no sign of the “shot of adrenaline” the governor had promised the tax cut would deliver.
News reports suggest that the Kansas legislature is preparing for more tax cuts. Lawmakers appear “likely to consider a bill that would take Kansas from three income tax brackets to a single rate,” a move that would destroy what remains of progressivity — the notion that higher incomes should face higher tax rates — in the state’s tax code.
Last year, 14 states cutThey can either enact new rates that give big benefits to the wealthy or cut taxes triggered by legislation from previous years. The Institute for Tax and Economic Policy, 20 states calculates, “are already discussing tax cuts for 2022.”
This rash of tax cutting has received precious little national attention, and — given our turbulent times — that shouldn’t surprise us. The tax cuts that continue seem to be ongoing are merely dollars and not about our national future as democracy. Tax cuts for the wealthy and attacks on our democracy’s integrity go hand in hand. The same state legislatures that are pushing voter suppression are pushing “tax relief” for their state’s most affluent.
“Many of the same states — Arizona, Georgia, Iowa, and Kansas, to name a few — considering tax cuts are also making it harder for people to vote,” explains analyst Wesley Sharpe, “such as by criminalizing efforts to assist voters with disabilities.”
As they rush to give tax breaks to the already wealthy, statehouse cheerleaders for private wealth have shown little respect for democracy. Arizona may be the most extreme example. There have been many instances where the state GOP legislators have tried to thwart the tax-the wealthy will of the voters.
Those voters in 2020 approved a referendum that significantly raised taxes on Arizona’s rich to pay for increased funding for the state’s public schools. The voter-backed tax increase details the Tax Foundation, “created a 3.5 percent high earners tax atop of the state’s existing 4.5 percent top marginal income tax rate, functionally yielding a new top rate of 8 percent.”
Arizona state lawmakers refused to accept the referendum result. In their 2021 session, they proceeded to rewrite the state’s basic tax-rate structure. They slashed the already existing 4.5 percent rate “to ensure” that the combined top rate Arizona’s richest face never exceeds 4.5 percent, essentially erasing the tax hike on the rich the referendum had put in place.
A “small group of politicians is helping their rich friends avoid paying their fair share to public schools,” respondedRebecca Gau, executive director of Stand for Children Arizona. “Worst of all, they are trying to silence voters.”
Gau and other angry Arizona education advocates subsequently collected enough signatures to put onto the November 2022 ballot a referendum that would repeal the 2021 legislative session’s exceedingly rich people-friendly rate-rigging.
But Arizona’s conservative lawmakers have still another wildcard to play. They sense that state education advocates will prevail at the polls in this November’s referendum and kill the tax cut for the rich the legislature passed last year. The lawmakers’ new strategy? They’re planning to repeal the 2021 tax cut They will be themselvesin the 2022 legislative sessions and, as local news reporters explain, “replace it with a new version, a move that would end a voter referendum that has stopped the tax cut law from taking effect.”
The Tax Foundation points out that no wealthy Arizonans will face the top 8 percent rate in 2020.
Other fronts are being taken by rich people-friendly state legislators. Kentucky friends who have a great private fortune would like to replace more of the state’s income tax revenue with regressive hikes in the state sales tax. Iowa has begunIts inheritance tax will be phased out. Mississippi’s governor is callingThe total elimination of the personal income taxes
How are these plutocrat pals justified in their generosity toward mega-millionaire families? They’re pointing to the sizeable budget surpluses many states are currently experiencing.
These surpluses are, however, points outNeva Butkus, Institute on Taxation and Economic Policy analyst, reflects a special set of circumstances that include billions in federal Covid assistance and changes in tax-filing deadlines during a pandemic that has resulted in many 2020 and 2021 taxes being collected in the same fiscal. This is a fiscal ploy to cut the taxes that the rich pay by using surpluses from these special circumstances.
These are the same legislators that proclaimed tax cuts to the rich as the perfect solution for our problems Before the pandemic, adds ITEP’s Butkus, are now calling tax cuts for the rich the solution to our problems DuringThe pandemic.
“Tax cuts,” she notes, “cannot be a solution to everything.”
Tac cuts have been carefully targeted at families struggling for financial support, to be sure can makeIt is a solid policy decision. Tax cuts for wealthy households who have become wealthier since the pandemic are not of any social benefit. We shouldn’t be cutting the taxes these rich people pay. We should be increasing them. And if we did that raising, the resulting revenue — and opportunities for real social progress — would be stunning.
Just how amazing is that? Oxfam, Patriotic Millionaires and the Fight Inequality Alliance just released a new reportThis does the math for each country and the whole world.
In the United States, a nation whose billionaires now hold more wealth than the population’s poorest 60 percent, even a modest annual wealth tax — say one that started with a 2 percent levy on wealth over $5 million and topped off with a 5 percent bite on wealth over $1 billion — would raise close to $1 trillion a year, $928.4 billion to be more exact.
Oxfam is also proposing a one-time 99 percent tax on all the wealth the world’s ten richest men — a group that includes nine Americans — have gained since Covid hit. Oxfam would be shocked if these 10 richest men lost 99.999% of their combined fortunes. goes on to noteEach of them would still be more than 99 percent of humanity.