Roosevelt Rundown

Thinking Bigger on Tax Reform

April 23, 2024

The trickle-down era failed. It’s time for a new tax code.

The Roosevelt Rundown features our top stories of the week.

(Photo by Spencer Platt / Getty Images)


Tax Reform Can End the Trickle-down Era for Good

This week, as millions of Americans filed their taxes, the Roosevelt Institute looked back at the failures of neoliberal tax policy and looked ahead to the expiration of the Tax Cuts and Jobs Act (TCJA) in 2025—and the promise of a new, equitable tax code.

In a new brief, Roosevelt’s Elizabeth Pancotti lays out the destruction wrought by the past 40 years of neoliberal tax legislation, which slashed taxes for the rich and has resulted in worsened inequality and less revenue for public investment. High-income individuals and corporations benefited much more than low-income individuals, wage increases failed to trickle down to the working class, and the Black-white wage gap grew, reversing progress from the civil rights era.

“While tax policy certainly isn’t to blame for every economic problem of the past four-and-a-half decades, it quarterbacked the neoliberal era,” Pancotti writes. “While the expiration of TCJA provisions creates an opportunity to revisit the tax code, today’s tax reform conversation need not, and should not, be confined to the boundaries of the TCJA’s provisions.”

The end of the TCJA “is an opportunity for us to not just roll back damaging provisions passed in 2017, but rethink the role of the tax code more broadly,” Roosevelt’s Suzanne Kahn argues in a new blog post. “We should be working toward a new tax code that proactively aims to rebuild the middle class, rebalance power, and confront racial and economic inequality.”

While the 2025 tax fight looms, we saw progress on the filing front this year: The IRS’s Direct File program, launched with funding from the Inflation Reduction Act, allowed individuals in 12 pilot states to file taxes without the need for costly third-party companies. It’s one step toward reimagining the US tax system as a system that works for the people.

Read Roosevelt’s latest tax releases:

 

Addressing Neoliberalism’s Cultural Fallout

Neoliberalism is on the way out, but rebuilding from its wreckage will take serious effort from progressives on the terrain of not only policy, but culture. A new Roosevelt Institute report breaks down how the dysfunctions of neoliberal ideology have created a cultural vacuum, leaving people yearning for community, safety, agency, understanding, and pleasure. Those of us advocating for a more economically democratic society, the report argues, must seriously address these cultural longings.

Isolation, precarity, consolidated power, and institutional failures are some of the cultural features of neoliberalism that “have been devastating to individuals and society at large,” write Roosevelt’s Shahrzad Shams, former Senior Fellow Deepak Bhargava, and activist Harry Hanbury. “But with notable exceptions, progressive critiques of the neoliberal order have largely focused on its policy failures.”

In recent years, the Right has successfully harnessed and weaponized cultural reactions to the dysfunctions of neoliberalism, as evidenced by the rise of misogynistic far-right commentators and conspiracy-fueled movements like QAnon. To counter these harmful trends and win the battle of ideas, “the Left will need to engage in mass culture, build mass organizations, and expand the policy repertoire to address issues that speak directly to the deeper longings driving our politics,” said Hanbury.

Read more in The Cultural Contradictions of Neoliberalism: The Longing for an Alternative Order and the Future of Multiracial Democracy in an Age of Authoritarianism.

 

What We’re Talking About

 

What We’re Reading

Labor Experts on Sectoral Bargaining, Child Labor, and Public Policy – feat. Roosevelt’s Alí R. Bustamante – Power at Work [podcast]

The US Industrial Policy Turn – feat. Roosevelt’s Todd N. Tucker – Geoeconomic Competition [podcast]

Millions of Workers Are Caught in a ‘Non-Compete’ Trap – Financial Times

‘Victories Would Be Nothing Less than an Earthquake’: Can UAW Win in the South? – The Guardian