A breakdown of the tax fight ahead of us and how we can use tax code to create a fairer economy.
In the United States, we are inaugurating a president who is of and for billionaires and an administration that is set to be the richest in history. There are at least 13 billionaires appointed to administration jobs, including Elon Musk, the richest man in the world.
The inauguration coincides with the launch of Oxfam’s annual report on inequality, “Takers, Not Makers,” which illustrates how billionaire wealth is growing at unimaginable pace while poverty remains unchanged. Contrary to the common narrative that extreme wealth comes only from extreme talent, we found that in 2023, more new billionaires got rich through inheritance than entrepreneurship. In the U.S., tax exemptions allow individuals to inherit as much as $27 million tax free, and loopholes enable the richest families to effectively avoid the estate tax altogether.
The coming weeks will determine how we move forward as a country, and whether the government puts forth policies that favor the most privileged few or support ordinary people. From President Trump’s first days in office back in 2017, he has prioritized the ultra-wealthy few at the expense of everyone else. If we don’t put a stop to his inequality-stoking tax policies, we’re on course for the same thing to happen again.
What can we expect from the Trump administration in terms of tax code?
President Trump is planning to rig the tax code for himself and his historically-wealthy administration. This year, he plans to renew the Tax Cuts and Jobs Act (TCJA), a billionaire-friendly tax law from his first term, and provide even more handouts to big corporations and the ultra-wealthy.
These policies are expensive; they come at the cost of the rest of us.
Some lawmakers want to cut critical poverty-fighting programs like Medicaid and food stamps that millions of people rely on. President Trump has proposed broad tariffs on all imports, risking price increases on products we use every day.
What happens if Congress renews the Tax Cuts and Job Act?
The TCJA was a signature piece of legislation for the Trump administration. The cuts amounted to an over $1 trillion giveaway for the ultra-wealthy, large corporations, and Big Oil. On the other hand, these cuts did little for ordinary families.
Much of the TCJA expires this year, giving Congress the chance to invest in workers and families. Instead, lawmakers are proposing trillions of dollars in tax breaks for ultra-rich individuals and corporations that will be paid for by increasing taxes and cutting services for the rest of us.
The total cost of Presidents Trump’s proposals is estimated at nearly $10 trillion, with over $4.5 trillion coming from the renewal of TCJA. That money could reduce inequality if Congress invested in workers and families.
What is Oxfam’s vision for a fairer tax system?
Oxfam supports a tax code that will reduce inequality, one that makes the super-rich, Wall Street, and corporations pay their fair share and that advances racial, gender, and climate justice. Rejecting tax giveaways for corporations and the ultra-wealthy can enable investments in workers and families.
This vision promotes inequality-reducing policies such as:
- Increasing taxes on inheritances
- Taxing large fortunes
- Expanding and improving the child tax credit
- Ending fossil fuel subsidies and making rich polluters pay
How can we achieve an economy that works for all of us?
If Congress allows the TCJA to expire, this will result in over $4.5 trillion in revenue that could reduce economic inequality and insecurity not just here in the U.S, but around the world. We could put that money towards investments in education, health care, infrastructure, and clean energy—things that truly benefit everyone.
We are calling on Congress to reject Trump’s proposed handouts for corporations and the ultra-rich, and use the expiration of the TCJA as an opportunity to create a tax code that tackles inequality. We deserve a tax system that prioritizes ordinary workers and families and invests in our collective future. It’s the first step in building an economy that takes care of everyone, not just the wealthy few.