With Congress continuing to debate the renewal of many key components of President Donald Trump’s 2017 Tax Cuts and Jobs Act, the stakes couldn’t be higher for ordinary Americans. The issue is whether we choose a path that incentivizes economic growth and mobility — or embrace one that punishes success. Democrats have wasted precious little time in racing to call for ever-higher tax rates for Americans — especially high-income earners. Most concerningly, there apparently have even been rumors of support for raising taxes on higher-income Americans from within GOP ranks.
All of this is deeply misplaced and rests on a fundamentally flawed vision that the “rich” are getting away without paying much of anything in taxes while the burden is left with the working class. This couldn’t be further from the truth: Recent data has shown that the top 1% of earners bring in 22.4% of income throughout the country, but pay 40.4% of all federal income taxes. If you zoom out a bit, you’ll find the top 5% of earners paying over 60% of all federal income tax in this country. This gets even more lopsided when you look at the bottom 50% of taxpayers — who paid just 2.3% of federal income tax.
While there are undoubtedly cases of people being able to manipulate the system to avoid taxes, the media’s obsession with such instances lead people to views that are completely out of step with reality. While Democrats may rally behind a recent poll that shows 58% of Americans believe the rich do not pay “their fair share,” we have to keep in mind that very few are aware of just how lopsided this system really is. Nevertheless, they have in recent years quadrupled down on this approach of blaming the wealth for the nation's financial woes.
If Democrats could have their way on taxes — such as raising the top marginal income tax rate, or imposing a new wealth tax on high-net-worth individuals — we would have an even worse system that further discourages upward mobility. The party still has not given up hopes in certain circles of a one-off wealth tax on high net worth Americans. This is problematic for the simple truth that steeply higher taxes disincentivize people from making more money. This can be seen on full display in certain European countries such as the UK, where high taxation—as well as over regulation—has resulted in decades of minimal to zero growth.
While Democrats are seemingly always willing to demonize successful Americans who bring home high incomes, you will rarely see any discussing how to actually lift people into the middle class. In particular, the so-called “benefit cliff” — where people who receive a raise or promotion yet end up losing significant amounts or all of their benefits — presents a real and difficult barrier for people to break through. For example, a 2023 survey of 200 low-income parents showed 85% of them experienced a benefit cliff, where increased income led to a net loss due to reduced assistance.
New polling from the National Taxpayers Union suggests the majority of voters are aware of just how important it is to extend these tax cuts. The Republican Party has long been the home of lower taxes for all Americans. This is no time to go soft on this issue: The GOP must remain the party that rewards hard work and encourages upward mobility, not punishes success. If we want to live in a society that empowers people to rise rather than holding them down, then renewing the Tax Cuts and Jobs Act isn't optional. It's essential.
