CONDEMNING THE TRUMP-RYAN-MCCONNELL TAX CUTS FOR THE RICH

WHEREAS, a fair and effective federal tax system is essential to provide for the public good and to support the public services and infrastructure needed to help Americans lead better lives; and

WHEREAS, the work of American Federation of Teachers members in education, healthcare, public safety and public services relies on a fair and effective federal tax system; and

WHEREAS, the Tax Cuts and Jobs Act was signed by President Donald Trump on Dec. 22, 2017; and

WHEREAS, the Trump tax cuts redistribute wealth to the richest 1 percent of Americans and lower taxes on our most profitable corporations and businesses; and

WHEREAS, half the value of the tax cuts this year will go to families that make more than $240,000 a year (the richest 5 percent), while families in the middle class will share just 8 percent of the benefits; and

 WHEREAS, by 2027, when the law is fully phased in, it is expected that a third of Americans in the middle class will have their taxes increased and all the net benefits will go to the richest Americans; and

WHEREAS, an analysis of the impact of the Trump tax cuts on the economy finds that shareholders are benefiting to a far greater extent than workers, with the rate for stock buybacks doubling compared with where it was prior to the passage of the law, while wages continue to grow too slowly; and

WHEREAS, the Trump tax cuts provide windfalls for U.S. corporations through a tax break on accumulated foreign earnings and profits, allowing corporations to repatriate untaxed profit they have stashed in offshore tax havens at a discount; and

WHEREAS, the Trump tax cuts will increase the deficit at a time when unemployment is low, contrary to sound fiscal policy that calls for low deficits during low unemployment in order to create space for greater deficits during a recession; and

WHEREAS, 19 percent of all revenues used by state and local governments come from federal aid, and the Trump tax cuts, by adding $1 trillion to our long-term deficits, will worsen austerity at the state and local levels; and

WHEREAS, state tax codes often track the federal tax code, causing the creation of parallel loopholes at the state level as a result of federal tax loopholes; and

WHEREAS, the Tax Cuts and Jobs Act provides significant challenges to our states’ ability to provide for public services by:

• Capping the state and local tax deduction at $10,000, which punishes those states with progressive tax systems that, for a century, have been able to count on a reliable revenue stream to provide robust public services;
• Amending Section 529 of the Internal Revenue Code to allow college savings plans to become vehicles to divert tax dollars from public schools in order to subsidize private schools; 
• Preserving the carried interest loophole, which lets hedge fund and private equity billionaires pay a lower tax rate than their secretaries, further rigging the economy in favor of the wealthy;
• Undermining the Affordable Care Act by repealing the individual mandate to buy health insurance, which will increase the cost of health insurance for all and reduce access to affordable healthcare;
• Creating a new loophole in the form of a 20 percent deduction on income of “pass through” businesses, providing even more opportunity for the wealthy to lower their tax burden; and
• Increasing the initial exemption to the estate tax to $11 million, helping to lock inequality of opportunity across generations; and

WHEREAS, the net result of these policies will be greater inequality, economic instability, and fewer resources for education, healthcare and other needed public services; and

WHEREAS, states do not have to follow the federal government’s lead and can enact reforms to their tax codes that preserve funding for public services and prioritize work over capital and the 99 percent over the 1 percent:

RESOLVED, that the American Federation of Teachers recommits itself to the fight for a federal tax system that is fair and effective; and

RESOLVED, that the AFT will partner with states and our allies to reform state tax codes in ways that improve working people’s lives, make the tax system fairer, and ensure adequate revenues so that states may provide for necessary government services, by:

• Enacting protections that offset the cap on state and local tax deductions;
• Protecting 529 college savings plans from becoming vehicles to divert public money to private K-12 schools at the state level;
• Creating state-level taxes on hedge funds and private equity that close the carried interest loophole at the state level;
• Enacting a state-level penalty for failing to purchase health insurance for those who can afford to do so;
• Creating state taxes on “pass through” entities that offset the new federal loophole;
• Passing state taxes that offset the federal estate tax giveaway and will undo prior harmful state and federal estate tax cuts;
• Decoupling from any other provisions in the federal tax code that redistribute wealth upward;
• Creating reforms to close corporate tax loopholes in states and to ensure states are able to tax corporate profits that have been sheltered overseas once they are;
• Adopting policies, such as a state-level personal exemption, when they are necessary to ensure fairness in the tax code; and
• Expanding the earned income tax credit and other tax benefits that lift working Americans out of poverty; and

RESOLVED, that the AFT will create a plain-English toolkit that explains this new tax law and its impact; and

RESOLVED, that the AFT commits to fighting for the middle and working classes and their families to ensure that sorely needed revenue for investments in education, infrastructure and the like are prioritized; and

RESOLVED, that the AFT recommits itself to fighting for high-quality public services—funded by a fair and progressive tax system that will benefit families, strengthen communities, ensure safety and bolster the economy.