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Trump’s 2017 tax cuts expire soon − study shows they made income inequality worse and especially hurt Black Americans
Trump’s 2017 tax cuts favored corporations, worsening racial and economic disparities, especially affecting Black taxpayers’ wealth.
Beverly Moran, Vanderbilt University
The Tax Cuts and Jobs Act, a set of tax cuts Donald Trump signed into law during his first term as president, will expire on Dec. 31, 2024. As Trump and Republicans prepare to negotiate new tax cuts in 2025, it’s worth gleaning lessons from the president-elect’s first set of cuts.
The 2017 cuts were the most extensive revision to the Internal Revenue Code since the Ronald Reagan administration. The changes it imposed range from the tax that corporations pay on their foreign income to limits on the deductions individuals can take for their state and local tax payments.
Trump promised middle-class benefits at the time, but in practice more than 80% of the cuts went to corporations, tax partnerships and high-net-worth individuals. The cost to the U.S. deficit was huge − a total increase of US$1.9 trillion from 2018 to 2028, according to estimates from the Congressional Budget Office. The tax advantage to the middle class was small.
Advantages for Black Americans were smaller still. As a scholar of race and U.S. income taxation, I have analyzed the impact of Trump’s tax cuts. I found that the law has disadvantaged middle-income, low-income and Black taxpayers in several ways.
Cuts worsened disparities
These results are not new. They were present nearly 30 years ago when my colleague William Whitford and I used U.S. Census Bureau data to show that Black taxpayers paid more federal taxes than white taxpayers with the same income. In large part that’s because the legacy of slavery, Jim Crow and structural racism keeps Black people from owning homes.
The federal income tax is full of advantages for home ownership that many Black taxpayers are unable to reach. These benefits include the ability to deduct home mortgage interest and local property taxes, and the right to avoid taxes on up to $500,000 of profit on the sale of a home.
It’s harder for middle-class Black people to get a mortgage than it is for low-income white people. This is true even when Black Americans with high credit scores are compared with white Americans with low credit scores.
When Black people do get mortgages, they are charged higher rates than their white counterparts.
Trump did not create these problems. But instead of closing these income and race disparities, his 2017 tax cuts made them worse.
Black taxpayers paid higher taxes than white taxpayers who matched them in income, employment, marriage and other significant factors.
Broken promises, broken trust
Fairness is an article of faith in American tax policy. A fair tax structure means that those earning similar incomes should pay similar taxes and stipulates that taxes should not increase income or wealth disparities.
Trump’s tax cuts contradict both principles.
Proponents of Trump’s cuts argued the corporate rate cut would trickle down to all Americans. This is a foundational belief of “supply side” economics, a philosophy that President Ronald Reagan made popular in the 1980s.
From the Reagan administration on, every tax cut for the rich has skewed to the wealthy.
Just like prior “trickle down” plans, Trump’s corporate tax cuts did not produce higher wages or increased household income. Instead, corporations used their extra cash to pay dividends to their shareholders and bonuses to their executives.
Over that same period, the bottom 90% of wage earners saw no gains in their real wages. Meanwhile, the AFL-CIO, a labor group, estimates that 51% of the corporate tax cuts went to business owners and 10% went to the top five highest-paid senior executives in each company. Fully 38% went to the top 10% of wage earners.
In other words, the income gap between wealthy Americans and everyone else has gotten much wider under Trump’s tax regime.
Stock market inequality
Trump’s tax cuts also increased income and wealth disparities by race because those corporate tax savings have gone primarily to wealthy shareholders rather than spreading throughout the population.
The reasons are simple. In the U.S., shareholders are mostly corporations, pension funds and wealthy individuals. And wealthy people in the U.S. are almost invariably white.
Sixty-six percent of white families own stocks, while less than 40% of Black families and less than 30% of Hispanic families do. Even when comparing Black and white families with the same income, the race gap in stock ownership remains.
These disparities stem from the same historical disadvantages that result in lower Black homeownership rates. Until the Civil War, virtually no Black person could own property or enter into a contract. After the Civil War, Black codes – laws that specifically controlled and oppressed Black people – forced free Black Americans to work as farmers or servants.
State prohibitions on Black people owning property, and public and private theft of Black-owned land, kept Black Americans from accumulating wealth.
Health care hit
That said, the Trump tax cuts hurt low-income taxpayers of all races.
One way they did so was by abolishing the individual mandate requiring all Americans to have basic health insurance. The Affordable Care Act, passed under President Barack Obama, launched new, government-subsidized health plans and penalized people for not having health insurance.
Department of the Treasury data shows almost 50 million Americans were covered by the Affordable Care Act since 2014. After the individual mandate was revoked, between 3 million and 13 million fewer people purchased health insurance in 2020.
Ending the mandate triggered a large drop in health insurance coverage, and research shows it was primarily lower-income people who stopped buying subsidized insurance from the Obamacare exchanges. These are the same people who are the most vulnerable to financial disaster from unpaid medical bills.
Going without insurance hurt all low-income Americans. But studies suggest the drop in Black Americans’ coverage under Trump’s plan outpaced that of white Americans. The rate of uninsured Black Americans rose from 10.7% in 2016 to 11.5% in 2018, following the mandate’s repeal.
The consumer price index conundrum
The Trump tax cuts also altered how the Internal Revenue Service calculates inflation adjustments for over 60 different provisions. These include the earned income tax credit and the child tax credit – both of which provide cash to low-wage workers – and the wages that must pay Social Security taxes.
Previously, the IRS used the consumer price index for urban consumers, which tracks rising prices by comparing the cost of the same goods as they rise or fall, to calculate inflation. The government then used that inflation number to adjust Social Security payments and earned income tax credit eligibility. It used the same figure to set the amount of income that is taxed at a given rate.
The Trump tax cuts ordered the IRS to calculate inflation adjustments using the chained consumer price index for urban consumers instead.
The difference between these two indexes is that the second one assumes people substitute cheaper goods as prices rise. For example, the chained consumer price index assumes shoppers will buy pork instead of beef if beef prices go up, easing the impact of inflation on a family’s overall grocery prices.
The IRS makes smaller inflation adjustments based on that assumption. But low-income neighborhoods have less access to the kind of budget-friendly options envisioned by the chained consumer price index.
And since even middle-class Black people are more likely than poor white people to live in low-income neighborhoods, Black taxpayers have been hit harder by rising prices.
What cost $1 in 2018 now costs $1.26. That’s a painful hike that Black families are less able to avoid.
The imminent expiration of the Trump tax cuts gives the upcoming GOP-led Congress the opportunity to undertake a thorough reevaluation of their effects. By prioritizing policies that address the well-known disparities exacerbated by these recent tax changes, lawmakers can work toward a fairer tax system that helps all Americans.
Beverly Moran, Professor Emerita of Law, Vanderbilt University
This article is republished from The Conversation under a Creative Commons license. Read the original article.
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Space and Tech
News Brief: Blue Origin’s New Glenn Successfully Reaches Orbit on Historic NG-1 Mission
Cape Canaveral, FL – January 16, 2025 – In a remarkable achievement for commercial spaceflight, Blue Origin’s New Glenn rocket successfully reached orbit during its inaugural NG-1 mission today, marking a significant milestone for the company and the industry. The rocket’s second stage performed flawlessly, completing two successful burns with the BE-3U engines, achieving its intended orbital parameters.
Dave Limp, CEO of Blue Origin, expressed his pride in the team’s accomplishment, stating, “New Glenn achieved orbit on its first attempt! We set out with ambitious goals, and while we lost our booster during descent, we gained invaluable insights from today’s mission.” Limp highlighted the importance of New Glenn in supporting critical missions for customers, including NASA’s Artemis program, which aims to establish a sustained human presence on the Moon.
New Glenn
The New Glenn vehicle is pivotal for Blue Origin’s future launches, including the Blue Moon Mark 1 cargo lander and the Mark 2 crewed lander, which will serve NASA’s lunar objectives. In addition, the company is seeing strong demand, with various vehicles in production and a growing list of customers like NASA, Amazon’s Project Kuiper, and AST SpaceMobile.
Jarrett Jones, Senior Vice President of New Glenn, remarked on the significance of the day, saying, “Today marks a new era for Blue Origin and for commercial space. We’re ramping our launch cadence and are incredibly grateful to everyone at Blue Origin, our customers, and the space community for their unwavering support.”
The launch, which took place at 2:03 a.m. EST from Launch Complex 36, signals the beginning of a formidable era in Blue Origin’s operations as it seeks to connect its missions with emerging national security objectives through certification from the U.S. Space Force.
Blue Origin plans to conduct further missions with New Glenn, expanding its role in the growing landscape of space exploration and resource utilization. The company is focused on learning from today’s endeavor and aims to return for another launch attempt this spring.
Stay tuned for more updates on Blue Origin’s ambitious journeys ahead!
Related Link:
https://www.blueorigin.com/news/new-glenn-ng-1-mission
The science section of our news blog STM Daily News provides readers with captivating and up-to-date information on the latest scientific discoveries, breakthroughs, and innovations across various fields. We offer engaging and accessible content, ensuring that readers with different levels of scientific knowledge can stay informed. Whether it’s exploring advancements in medicine, astronomy, technology, or environmental sciences, our science section strives to shed light on the intriguing world of scientific exploration and its profound impact on our daily lives. From thought-provoking articles to informative interviews with experts in the field, STM Daily News Science offers a harmonious blend of factual reporting, analysis, and exploration, making it a go-to source for science enthusiasts and curious minds alike. https://stmdailynews.com/category/science/
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Climate misinformation is rife on social media – and poised to get worse
Meta’s decision to reduce fact-checking can exacerbate climate misinformation during disasters, leaving users to navigate a landscape prone to false claims, undermining public understanding and complicating crisis management.
The decision by Meta, the parent company of Facebook and Instagram, to end its fact-checking program and otherwise reduce content moderation raises the question of what content on those social media platforms will look like going forward.
One worrisome possibility is that the change could open the floodgates to more climate misinformation on Meta’s apps, including misleading or out-of-context claims during disasters.
In 2020, Meta rolled out its Climate Science Information Center on Facebook to respond to climate misinformation. Currently, third-party fact-checkers working with Meta flag false and misleading posts. Meta then decides whether to attach a warning label to them and reduce how much the company’s algorithms promote them.
Meta’s policies have fact-checkers prioritizing “viral false information,” hoaxes and “provably false claims that are timely, trending and consequential.” Meta explicitly states that this excludes opinion content that does not include false claims.
The company will end its agreements with U.S.-based third-party fact-checking organizations in March 2025. The planned changes slated to roll out to U.S. users won’t affect fact-checking content viewed by users outside the U.S.. The tech industry faces greater regulations on combating misinformation in other regions, such as the European Union.
Fact-checking curbs climate misinformation
I study climate change communication. Fact-checks can help correct political misinformation, including on climate change. People’s beliefs, ideology and prior knowledge affect how well fact-checks work. Finding messages that align with the target audience’s values, along with using trusted messengers – like climate-friendly conservative groups when speaking to political conservatives – can help. So, too, does appealing to shared social norms, like limiting harm to future generations.
Heat waves, flooding and fire conditions are becoming more common and catastrophic as the world warms. Extreme weather events often lead to a spike in social media attention to climate change. Social media posting peaks during a crisis but drops off quickly.
Low-quality fake images created using generative artificial intelligence software, so-called AI slop, is adding to confusion online during crises. For example, in the aftermath of back-to-back hurricanes Helene and Milton last fall, fake AI-generated images of a young girl, shivering and holding a puppy in a boat, went viral on the social media platform X. The spread of rumors and misinformation hindered the Federal Emergency Management Agency’s disaster response.
What distinguishes misinformation from disinformation is the intent of the person or group doing the sharing. Misinformation is false or misleading content shared without active intention to mislead. On the other hand, disinformation is misleading or false information shared with the intent to deceive.
Disinformation campaigns are already happening. In the wake of the 2023 Hawaii wildfires, researchers at Recorded Future, Microsoft, NewsGuard and the University of Maryland independently documented an organized propaganda campaign by Chinese operatives targeting U.S. social media users.
To be sure, the spread of misleading information and rumors on social media is not a new problem. However, not all content moderation approaches have the same effect, and platforms are changing how they address misinformation. For example, X replaced its rumor controls that had helped debunk false claims during fast-moving disasters with user-generated labels, Community Notes. https://www.youtube.com/embed/xgJ-xwXZ0zA?wmode=transparent&start=0 A report found a surge of climate change misinformation on X in the wake of Elon Musk’s acquisition of the social media platform on Oct. 27, 2022.
False claims can go viral rapidly
Meta CEO Mark Zuckerberg specifically cited X’s Community Notes as an inspiration for his company’s planned changes in content moderation. The trouble is false claims go viral quickly. Recent research has found that the response time of crowd-sourced Community Notes is too slow to stop the diffusion of viral misinformation early in its online life cycle – the point when posts are most widely viewed.
In the case of climate change, misinformation is “sticky.” It is especially hard to dislodge falsehoods from people’s minds once they encounter them repeatedly. Furthermore, climate misinformation undermines public acceptance of established science. Just sharing more facts does not work to combat the spread of false claims about climate change.
Explaining that scientists agree that climate change is happening and is caused by humans burning greenhouse gases can prepare people to avoid misinformation. Psychology research indicates that this “inoculation” approach works to reduce the influence of false claims to the contrary.
That’s why warning people against climate misinformation before it goes viral is crucial for curbing its spread. Doing so is likely to get harder on Meta’s apps.
Social media users as sole debunkers
With the coming changes, you will be the fact-checker on Facebook and other Meta apps. The most effective way to pre-bunk against climate misinformation is to lead with accurate information, then warn briefly about the myth – but only state it once. Follow this with explaining why it is inaccurate and repeat the truth.
During climate change-fueled disasters, people are desperate for accurate and reliable information to make lifesaving decisions. Doing so is already challenging enough, like when the Los Angeles County’s emergency management office erroneously sent an evacuation alert to 10 million people on Jan. 9, 2025.
Crowd-sourced debunking is no match for organized disinformation campaigns in the midst of information vacuums during a crisis. The conditions for the rapid and unchecked spread of misleading, and outright false, content could get worse with Meta’s content moderation policy and algorithmic changes.
The U.S. public by and large wants the industry to moderate false information online. Instead, it seems that big tech companies are leaving fact-checking to their users.
Jill Hopke, Associate Professor of Journalism, DePaul University
This article is republished from The Conversation under a Creative Commons license. Read the original article.
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Exciting news is on the horizon for commuters in the Santa Barbara and Goleta area! After years of planning and anticipation, the Metrolink commuter train service is set to launch this fall, providing a new, efficient way to travel between Ventura County and Santa Barbara County. With the increasing focus on alternative transportation options, this project represents a significant step forward for our communities and environment.
The Journey Begins
The Santa Barbara County Association of Governments (SBCAG) is at the forefront of this initiative, fulfilling a promise made to voters who approved a funding tax aimed at both widening the freeway and exploring innovative transportation alternatives. Originally considered along with Amtrak, the decision to partner with Metrolink emerged, as their schedules proved more conducive to the commuter needs of the area.
Metrolink’s plan is to operate a streamlined route starting from Moorpark, with stops in our beautiful Santa Barbara and Goleta, avoiding the timing conflicts that hampered the Amtrak discussions. Aaron Bonfilio, SBCAG’s Director of Multimodal Programs, emphasized the importance of this collaboration, saying, “working with them to develop this agreement is critical to the next step. And that’s what this is all about.”
A Convenient Ride
Imagine leaving Oxnard at a crisp 7 a.m. and arriving in Santa Barbara by 7:51 a.m., or reaching Goleta shortly after at 8:03 a.m. The convenience of this service is striking, with additional afternoon departures that will surely benefit daily commuters. Goleta Mayor Paula Perotte expressed her enthusiasm, stating, “Oh, that’s totally reasonable,” highlighting the strategic scheduling designed to meet local needs.
Riders can look forward to a brand new train depot in Goleta, currently under construction, with daily bus connections to enhance accessibility. Bonfilio mentioned the multiple options available through the Coastal Express, providing around 20 trips in both directions each morning and afternoon.
An Affordable and Productive Commute
The introductory round-trip fare of just $10, or $5 in each direction, is a refreshing incentive intended to encourage residents to leave their cars behind. It’s not only planet-friendly but wallet-friendly, too! For those opting to work during their commute, Mayor Perotte noted that riding the train may even allow workers to log their commute time since they can be productive on their laptops while on board.
Initial projections show around 200 daily riders, and with a capacity for over 500, there’s plenty of room for growth. “I think once people get used to riding the train, they’re going to love it,” said Mayor Perotte, sharing her vision of creating a new commuting habit that moves people away from sitting in traffic.
Ready to Roll
SBCAG is currently finalizing agreements to ensure everything is in place before the fall launch, paving the way for an exciting new chapter in commuting for Santa Barbara and Goleta residents. This initiative not only represents a practical solution to transportation challenges but also offers a glimpse into a future where public transit continues to evolve.
In closing, let’s prepare to say goodbye to traffic woes and hello to the ease and joy of train travel. Get ready to hop on the Metrolink and enjoy the ride into a more connected and sustainable future! 🚆✨
STM Daily News is a vibrant news blog dedicated to sharing the brighter side of human experiences. Emphasizing positive, uplifting stories, the site focuses on delivering inspiring, informative, and well-researched content. With a commitment to accurate, fair, and responsible journalism, STM Daily News aims to foster a community of readers passionate about positive change and engaged in meaningful conversations. Join the movement and explore stories that celebrate the positive impacts shaping our world.
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