We can choose a fairer federal tax code in 2025

I spent 12 years in the Montana Legislature,1995 through 2006. Session after session we fought the same battle over taxes. Those who represented wealthy people and commercial interests argued that their taxes should be lowered. They needed more money in their pockets, they claimed. Their share of responsibility for paying for government services should be reduced, and the burden should be shifted to the middle class. We’ve all heard the rationale for this shirking of civic responsibility: Give the wealthy and the corporations more money and they’ll invest more in the economy, create more jobs, and everyone will be happy. Trickledown economics, 101. It has never worked. It never will.

This struggle between the “haves” and the “have nots” will be with us as long as the “haves” insist they don’t have enough. Adam Smith identified it in the 1700s when he coined the phrase “vile maxim of the masters,” referring to the insatiable greed of the wealthy. The great Greek philosophers saw it in their own societies almost two millennia before.

The battle carries a moral component. Every once in a while you have to stand back, survey the situation and ask a simple question: Is it right? Is it right that so much of the wealth we have created together as a society is in the pockets of a tiny few?

One session, as we debated a bill that lowered the tax on capital gains (investment income) below the tax on earned income (wages), I asked this question of the bill sponsor: Is it moral to have a higher tax rate for the worker who puts in an eight-hour day, 40 hours a week, than for the investor who makes his capital gains by moving around investments in his stock portfolio with a few clicks of the computer? He had no answer.

We saw another example of the attack on the middle class in the 2023 Montana Legislature. The supermajority cut state income taxes and provided the lion’s share of the benefits to the wealthiest, while giving the rest of us enough for a tank of gas. At the same time, the supermajority “forgot” to adjust residential property tax rates to prevent the bone-crushing increase in property taxes that Montana homeowners have suffered.

The latest iteration of the battle now presents itself at the federal level. If the federal tax cuts of 2017 are extended beyond their current expiration date, the public treasury will shrink. So will the government’s ability to fulfill its responsibility to provide for the common good -- for example, by strengthening Social Security, Medicare and Medicaid; or by assisting families with the child income tax credit. These programs help everyone.

These tax cuts gave an estimated $61,000 a year in benefits to the wealthiest 1%. Those with incomes below $92,000 a year got $900 or less. Moreover, these tax cuts robbed the public treasury of $1.9 trillion in the first 10 years, adding enormous federal debt and preventing the government from addressing so many of the pressing problems we must confront.

So what’s the punchline of these observations? It’s pretty simple. As we look forward to make our country a better place for all of us, we face some consequential choices.

Do we want a society that allows our elders to live in dignity? Do we want to help families with the overwhelming costs of raising the next generation? Do we value the work our teachers perform in the classroom? Are we up to the task of squarely addressing global warming and its devastating effects?

The resources to meet these challenges are available. But they won’t be if we give these resources away to people who are already so incredibly wealthy that the rest of us can’t even imagine what possible satisfaction they could get from more wealth.

The choice is ours. Tell your Congressional representatives to end the unfair tax cuts for corporations and the wealthy that deprive our government of the resources to provide for the common good.

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John Ellingson of Missoula was a Montana legislator, 1995-2006, Senate Majority Leader, 2005-2006; Montana Assistant Attorney General; Legal Director and Staff Attorney, Montana ACLU; Board member and current Vice-Chair of Big Sky 55+.