August 22, 2022
August 22, 2022
Editor’s note: This originally ran as an opinion piece in the Cleveland Plain Dealer.
When I left Cleveland to work on federal tax policy after 20 years running Policy Matters Ohio, I knew Ohio would stay in my heart and fuel my work. Accustomed to an America that often ignores our toughest problems, I understood the barriers to winning tax and investment policies for regular people.
So, I was as surprised as anyone when, after the idea seemed dead, President Biden and Congress passed a stunning law dedicating hundreds of billions of dollars to green the economy, secure domestic energy, fund health care and reduce the deficit. To pay for these transformations, the lnflation Reduction Act shrinks corporate tax breaks, collects revenue from tax lawbreakers, and reduces advantages corporate shareholders get from stock buybacks. All of this is good – for Cleveland and Ohio.
Suddenly, it seems we could begin to change the trajectory of this country’s staggering inequality and this planet’s heartbreaking heating.
My colleagues at the Institute on Taxation and Economic Policy began studying corporate tax avoidance in 1984. Their first study helped push the Reagan administration to close corporate loopholes. Since then, however, we’ve watched tax and labor policy worsen, raising less from the uber-wealthy, fueling concentration of income and wealth, and leaving many of the Ohio communities I love behind.
In addition to bad policy, policymakers defunded the Internal Revenue Service, which now has fewer auditors than at any time since World War II. The new law supports the IRS, earmarking resources to make corporations and wealthy tax evaders earning over $400,000 pay, just as working people do. This means revenue for things Ohioans need, like solar panels (which could be manufactured in glass capital Toledo), wind turbines (which supply chain workers in Lorain could make), and cleaner air.
The law’s provisions raise more than $700 billion over a decade for health care, deficit reduction and energy, doing more to reduce carbon emissions than any other federal effort ever. This will mean a more equitable America and a more sustainable planet.
This change required leadership from all quarters: progressives to advance a vision of tax and climate justice; negotiators who endured endless meetings to craft that vision into something passable; and centrists from swing districts who face well-funded political opponents.
But Ohio lawmakers who backed the law can run again knowing it’s enormously popular. Two in three Americans support it, including strong majorities of Democratic, Independent, Black, white, Hispanic and Asian voters. Approval was above seven in ten for union households, young people, moderates, moms and first-time voters.
Because of that popularity, regular people pressured Congress to do the right thing. Parents convinced each other on playgrounds to call their lawmakers, climate activists staged marches, union members spoke up between doing their jobs and cooking dinner. Consequently, we’ve achieved a monumental victory that will create lasting, generational change.
We can’t become the America we were meant to be without everyone: Recent graduates worried about the planet’s future; people raising the next generation and people ready to retire; Americans of all races, genders and ages, who pay their taxes and want the wealthiest to do the same.
This law doesn’t do everything we need but it puts us on a path toward tax and climate justice. It reduces inequality, racial and economic, makes us healthier and eases our costs. So, I’m surprised we got this change, but not surprised we all demanded it. In Ohio, I learned that creating democracy requires rolling up our sleeves. This time, it was worth the effort.