Last week, it was reported that corporations will reap $16 billion in new, retroactive tax breaks this year under just one provision of the Trump-GOP tax law enacted in July.
This provision of HR-1, otherwise known as the “One Big Beautiful Bill Act,” allows companies to fully deduct the cost of investments like equipment or facilities in the first year they are used, rather than deduct them gradually over time. The Joint Committee on Taxation noted the last time this exact provision was in effect, more than 80% of its benefits were claimed by corporations with more than $1 billion in earnings.
It hardly seems newsworthy at this point, the extent to which this administration is diverting public dollars away from programs and services that help everyday families and into the pockets of big corporations and billionaires. Over the next 10 years, the GOP tax law will deliver about $1 trillion in tax cuts to the top 1%.
Amy Matsui
To pay for those massive tax cuts, the law slashed Medicaid and the Affordable Care Act, as well as the Supplemental Nutrition Assistance Program. About 4.7 million people are estimated to lose their health insurance coverage by 2034, and about 4 million people will lose all or a significant portion of their SNAP benefits.
Our tax coffers are being drained for the benefit of the wealthiest, even as families across the country are struggling with the cost of essentials like food, housing, health care and child care.
Child care is a notable expense that families struggle to afford. The average annual cost for an infant in a child care center exceeds in-state college tuition in 40 states. Yet child care providers operate on the slimmest of margins, and early educators are paid poverty-level wages.
Imagine if, instead of serving as a slush fund for billionaires, our tax system required the wealthiest and big corporations to pay their fair share. And imagine if, instead of turning a blind eye to the shenanigans of wealthy tax cheats, the IRS collected more of the taxes that are owed. This would dramatically increase the public dollars that could be used to fund shared priorities — like universal child care.
Child care would be an ideal investment for our public dollars. Public investment in the child care system could make care affordable for families and ensure the child care workforce is paid a dignified wage. It would foster economic growth by making it easier for parents and caregivers, especially women, to work, by reducing absenteeism and turnover, as well as by creating new jobs. Instead of disappearing into untraceable overseas bank accounts, our tax dollars could boost family incomes and support children’s healthy development.
Despite overwhelming evidence to the contrary, President Trump and his allies have argued that cutting taxes for the wealthiest and big corporations, including through the latest retroactive tax break, stimulates economic growth. Further, they argued that making tax breaks like this one permanent created certainty that would incentivize businesses to make investments, justifying the exorbitant cost of doing so.
It’s funny: Do you know who else really benefits from a steady, robust stream of public dollars? Our youngest children. Especially those whose families are struggling to afford the basics in the face of inflation, tariffs, decimated public programs and services, and the economic effects of the recent extended government shutdown. The promise of a better tax system is that we can raise the public dollars to invest them in children and families — if the government is willing to prioritize babies over billionaires.
Amy K. Matsui serves as vice president for income security and child care at the National Women’s Law Center and is a Public Voices Fellow of the OpEd Project in partnership with the National Black Child Development Institute.
Related article:
What will we leave our children | Opinion by Ryan Chismark