Granderson: Money will be tight. Americans will suffer. Will the top 10% step up?
The Tax Cuts and Jobs Act of 2017 slashed the corporate tax rate from 35% to 21% and more than doubled the federal estate tax exemption rate for married couples, from $11 million to $27 million. An analysis by the Congressional Budget Office and the Joint Committee of Taxation found that beginning in 2027, lower- and middle-class families could see a tax increase that would exceed the rate they paid before 2017.
Sadly, the law is set to expire at the end of the year. It would be just awful if America's billionaires lost the gift that this law gave them; they've increased their collective wealth by trillions since the tax cuts went into effect. Thankfully, Congress is in talks to protect these vulnerable individuals.
The current news cycle is saturated with stories about disillusioned Trump supporters finding out what they actually voted for, as they lose jobs and benefits. Not the top 10%, though. They own 90% of all the stocks on Wall Street. They know exactly what they were voting for.
There's another notable result of the Tax Cuts and Jobs Act: the $20-billion decrease in charitable donations. Part of the reform included changing the standards for a tax write-off for 20% of Americans. That led to fewer dollars being given to charities, many of which help people in need. It is rather telling that the same law that increased wealth by the trillions for the few led to billions being kept from the many.
After the country entered World War I in 1917, to help pay for it President Wilson and Congress introduced Liberty bonds and expanded the federal income tax, which increased the number of people paying to 4 million, up from 500,000. Concerned the tax increase would prevent wealthier Americans from donating, the War Revenue Act of 1917 introduced the charitable donation policy. It wasn't a loophole that needed closing; it was a door the federal government opened so that Americans were incentivized to still help one another after money got tight.
When President Trump took office in 2017, the economic trend in the country was pointing north. Job participation was above 60%, unemployment below 5%, and wages increased by 2.5% from the year before. That doesn't mean every American was rolling in cash, but certainly we were better off than the folks in 1917. So why tinker with charitable donations of all things? If the federal government saw fit to encourage people to give in the hard times, why remove the incentive in good times? It would be laughable to pretend that the goal was fiscal responsibility, considering how Trump's cuts inflated the deficit.
Whatever their goals, it's definitely conservatives who have the power right now in Washington. Are they really planning on using it to decrease charitable giving? And if they do, will the organizations that depended on tax-incentivized donations suffer?
Earlier this month, the Contemporary Theater of Ohio in Columbus was left in a lurch after Trump's anti-DEI directive prevented a $10,000 National Endowment of the Arts grant from coming their way. Local businesses stepped up to fill in the gap so the show could go on. That's one production at one theater. The question is how sustainable the 'kindness of strangers' business model will be for nonprofit organizations as a whole in the years ahead if people are not as able to receive a tax benefit.
Recently the Federal Reserve signaled the U.S. could be heading toward a recession. Usually that means layoffs, wage freezes — money is going to be tight. People will be in need. And one of the Trump administration's first acts, back in January, was an attempt to destroy institutional safety nets.
Without tax incentives, will the private sector meet the nation's needs? Or will the cuts in donations continue while the wealthiest among us continue to rake in trillions?
@LZGranderson
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This story originally appeared in Los Angeles Times.
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Trump also promised to deploy the National Guard to help carry out his immigration enforcement goals, and his top adviser Stephen Miller explained how that would be carried out: Troops under sympathetic Republican governors would send troops to nearby states that refuse to participate, Miller said on "The Charlie Kirk Show," in 2023. After Trump announced he was federalizing the National Guard troops on Saturday, Defense Secretary Pete Hegseth said other measures could follow. Hegseth wrote on the social media platform X that active duty Marines at Camp Pendleton were on high alert and would also be mobilized "if violence continues."
