John Cornyn, a Republican Senator from Texas, promoted an increase to the federal gas tax, a tax that is paid disproportionately by the poor and middle class, in a tweet:
The gas tax was last raised in 1993 from 14.1 cents to 18.4 cents per gallon. Because it is not pegged to inflation, its purchasing power has eroded significantly over the past two and a half decades, and the tax is now “worth” 40 percent less than in 1993 https://t.co/sw8fQcN0zf
— Senator John Cornyn (@JohnCornyn) December 18, 2018
Recall that just a year ago, John Cornyn voted, along with other Republicans in the Senate and House, to pass a $1.4 trillion tax cut that went overwhelmingly to corporations and the wealthy:
The bill, the Tax Cuts and Jobs Act, is projected to add more than $1 trillion in deficit spending over 10 years, but passed a Republican caucus that spent the Obama years obsessed over the national debt. There was just one dissenter in the party, Sen. Bob Corker of Tennessee. The final vote was 51 in favor, 49 against, with all the Democrats and Corker voting no.
There were a smattering of last-minute changes tucked into the nearly 500-page bill, but the core of it is quite simple: a permanent tax cut for corporations combined with much smaller, and temporary, benefits for everyone else. Over the next decade, the $1.4 trillion tax cut would disproportionately reward the wealthiest Americanswhile piling on the national debt—which in turn will likely be used by Republicans as a justification for cutting Social Security, Medicare, and Medicaid.
The House, which already passed its own tax bill last month, and the Senate are expected to work out the differences between their bills in conference meetings. Then each chamber would vote again, and send the final product to President Donald Trump’s desk for his signature. Trump hopes to sign what he has called his “big, beautiful Christmas present” to the American people by the end of the year.
Before the individual cuts expire in 2026—ending the bill’s most charitable years—the top 1 percent wouldreceive slightly more of the tax cut than the bottom 60 percent of Americans combined. Without the individual tax cut, the top 1 percent would get start getting 61 percent of the benefits. And at that point, the vast majority of middle-class taxpayers would receive essentially nothing, or end up paying higher taxes.
This is what always seems to happen when Republican politicians cut taxes for the rich: they replace that lost revenue with increases to sales taxes, gas taxes, tolls, and fees, which are paid disproportionately by the poor and middle class.
This has also been happening constantly at the state level whenever Republicans gain power, and is why there are so many states that now have regressive tax burdens, where the poor and middle class end up paying a higher percentage in taxes than the rich:
- The vast majority of state and local tax systems are inequitable and upside-down, taking a much greater share of income from low- and middle-income families than from wealthy families. The absence of a graduated personal income tax in many states and an overreliance on consumption taxes contribute to this longstanding problem.
- The lower one’s income, the higher one’s overall effective state and local tax rate. On average, the lowest-income 20 percent of taxpayers face a state and local tax rate more than 50 percent higher than the top 1 percent of households. The nationwide average effective state and local tax rate is 11.4 percent for the lowest-income 20 percent of individuals and families, 9.9 percent for the middle 20 percent, and 7.4 percent for the top 1 percent.
- Tax structures in 45 states exacerbate income inequality. Most state and local tax systems worsen income inequality by making incomes more unequal after collecting state and local taxes. Five states and the District of Columbia somewhat narrow the gap between lower- and middle- income taxpayers and upper-income taxpayers, making income slightly more equitable after collecting state and local taxes.
- In the 10 states with the most regressive tax structures (The Terrible 10), the lowest-income 20 percent pay up to six times as much of their income in taxes as their wealthy counterparts. Washington State is the most regressive, followed by Texas, Florida, South Dakota, Nevada, Tennessee, Pennsylvania, Illinois, Oklahoma, and Wyoming.
- Heavy reliance on sales and excise taxes are characteristics of the most regressive state tax systems. Six of the 10 most regressive states derive roughly half to two-thirds of their tax revenue from sales and excise taxes, compared to a national average of about one-third. Seven of these states do not levy a broad-based personal income tax while the remaining three have a personal income tax rate structure that is flat or virtually flat. A calculation of effective sales and excise tax rates finds that, on average, the lowest-income 20 percent pay 7.1 percent, the middle 20 percent pay 4.8 percent and the top 1 percent pay a comparatively meager 0.9 percent rate.
- A progressive graduated income tax is a characteristic of the least regressive state tax systems. States with the most equitable state and local tax systems derive, on average, more than one-third of their tax revenue from income taxes, which is above the national average of 27 percent. These states promote progressivity through the structure of their income taxes, including their rates (higher marginal rates for higher-income taxpayers), deductions, exemptions, and use of targeted refundable credits.
- States commended as “low-tax” are often high-tax for low- and middle-income families. The 10 states with the highest taxes on the poor are Arizona, Florida, Hawaii, Illinois, Indiana, Iowa, Oklahoma, Pennsylvania, Texas, and Washington. Six of these are also among the “terrible ten” because they are not only high-tax for the poorest, they are also low-tax for their richest residents.
When Republican politicians cut taxes for the rich, they rarely end up just cutting taxes. Instead, they usually end up shifting the tax burden from the rich to the poor and middle class. This is class warfare, and with the help of Republican politicians, the rich are winning.