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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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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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In a significant health alert, the U.S. Food and Drug Administration (FDA) has upgraded the recall of Costco’s Kirkland Signature Smoked Salmon to a Class I designation, indicating a serious health risk. This recall follows the discovery of Listeria monocytogenes during routine laboratory testing.
Originally announced in late October, the recall involved 111 cases of smoked salmon packaged in twin 12-ounce units, with a UPC number of 0 96619 25697 6 and a lot number of 8512801270. The affected products have a best-by date of November 13, 2024, and were distributed between October 9 and October 13, 2024, specifically to Costco locations in Florida.
Listeria monocytogenes is known to cause listeriosis, a severe infection that can result in serious health complications or even death, especially among vulnerable populations such as pregnant individuals, the elderly, and those with weakened immune systems. Although no illnesses have been reported in connection with this product, consumers are advised to check their freezers for these recalled items.
Costco is urging customers who purchased this product to return it for a full refund.
For your safety, the FDA reminds consumers that Listeria can be found in a variety of foods, particularly raw or smoked seafood, unpasteurized dairy products, and deli meats. If you suspect you may have consumed contaminated food, please consult with a healthcare professional.
Stay safe and informed by regularly checking for updates on food recalls from reliable sources.
Related links:
The FDA Issued a Class I Recall on Costco’s Kirkland Signature Smoked Salmon https://www.foodandwine.com/costco-kirkland-signature-smoked-salmon-class-i-recall-listeria-monocytogenes-8780336
https://www.fda.gov/food/foodborne-pathogens/listeria-listeriosis
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.
Groundbreaking for a Sustainable Future: LA Metro’s Southeast Gateway Line Light Rail Project
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Lifestyle
Newsweek Names Delta Dental of California One of America’s Greatest Workplaces for Diversity 2025
Annual ranking recognizes companies fostering inclusion and championing diversity based on anonymous employee feedback, public data, and third-party research.
SAN FRANCISCO /PRNewswire/ — Delta Dental of California and Affiliates, the leading dental insurance provider, has been recognized by Newsweek as one of America’s Greatest Workplaces for Diversity in 2025. This distinguished award is presented by Newsweek and Plant-A Insights Group to recognize U.S. companies across industries that prioritize fostering diversity and inclusive workplace cultures.
“Our people are our greatest asset,” said Brian Sherman, executive vice president and chief people officer of Delta Dental of California and Affiliates. “This recognition reflects our deep commitment to Diversity, Equity, and Inclusion programs that support and celebrate the unique perspectives and contributions of our employees.”
America’s Greatest Workplaces for Diversity is an annual ranking determined by a rigorous evaluation of public data, HR insights, and anonymous employee surveys. The list honors organizations with over 1,000 employees that demonstrate a meaningful commitment to offering distinctive company cultures inclusive of backgrounds and demographics, including age group, race, cultures, and sexual orientations. Research suggests about 80 percent of U.S. workers believe it’s important for companies to create inclusive cultures.
“As companies in the United States continue to navigate the evolving dynamics of the workplace, diversity remains a cornerstone of organizational success and social responsibility,” said Nancy Cooper, global editor in chief of Newsweek. “Newsweek and market-data research firm Plant-A Insights are proud to introduce ‘America’s Greatest Workplaces for Diversity 2025,’ highlighting companies committed to building inclusive workplaces.”
Delta Dental of California received a rating of 4.5 out of 5 stars for its Diversity, Equity and Inclusion practices in 2024. The company has also been recognized with other Newsweek accolades, including America’s Greatest Workplaces 2023, America’s Greatest Workplaces for Diversity 2023, and Americas Greatest Workplaces for Parents and Families 2023.
Delta Dental is committed to providing consistent, quality access to oral health care, improving education and driving lasting policy changes to address systemic issues. To learn more about what makes Delta Dental of California and Affiliates one of the best employers in the U.S., visit our career page.
About Delta Dental of California and Affiliates
Since 1955, Delta Dental of California and Affiliates has offered comprehensive, high-quality oral health care coverage to millions of enrollees and built the strongest network of dental providers in the country. The Delta Dental of California enterprise includes its affiliates Delta Dental Insurance Company, Delta Dental of Pennsylvania, Delta Dental of New York, Inc., as well as the national DeltaCare USA network, and provides dental benefits to more than 31 million people across 15 states and the District of Columbia.* All are members of the Delta Dental Plans Association based in Chicago, Illinois, the not-for-profit national association that through a national network of Delta Dental companies collectively covers millions of people nationwide. Delta Dental is a registered trademark of Delta Dental Plans Association.
For more information about Delta Dental of California and Affiliates, please visit www.deltadentalins.com
*Delta Dental of California and Affiliates’ operating areas encompass Alabama, California, Delaware, Florida, Georgia, Louisiana, Maryland, Mississippi, Montana, Nevada, New York, Pennsylvania, Texas, Utah, West Virginia and the District of Columbia, as well as Puerto Rico and the Virgin Islands.
SOURCE Delta Dental of California
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