(AP Photo/J. Scott Applewhite)

The economy has come a long way in recovering from the pandemic, with job growth still very strong, but people across the country are struggling from unusually high inflation. Thankfully, there are signs inflation is easing, such as gas prices coming down significantly in recent weeks. And now, a recent compromise negotiated in the United States Senate will address inflation and some of the biggest costs facing families. The Inflation Reduction Act is landmark legislation that will lessen inflation and lower the costs of energy, prescription drugs, and health care premiums for millions of Americans. It will do all of this while also cutting the deficit and making the tax code more fair.

Wisconsin Senator Ron Johnson has an opportunity to support this proposal that will lower costs for most Wisconsin families by cracking down on tax cheats and closing tax loopholes exploited by Wall Street fund managers and corporations who pay little to nothing in taxes. As someone who analyzes tax policy for a living, I regretfully have my doubts that Sen. Johnson will do the right thing and support the Inflation Reduction Act. Throughout his career, Sen. Johnson has consistently gotten it wrong when it comes to making the tax code work for everyone.

Sen. Johnson has been unabashed about giving tax cuts to people like himself. He continues to be proud of his role as a key player in the passage of 2017’s “Tax Cuts and Jobs Act.” To put it bluntly: this bill was a flagrant giveaway to wealthy people like Sen. Johnson, with $1.9 trillion of tax cuts weighted toward the wealthy and corporations added to the deficit.

Allow me to explain. One of the provisions of the “Tax Cuts and Jobs Act” was known as the passthrough deduction. Sen. Johnson tried to sell it as a small business tax cut. In reality, 60% of the benefit of this so-called small business tax cut goes to the richest 1% of Americans. In other words, people like Sen. Johnson.

When Sen. Johnson had the power, the richest 1% of Wisconsinites got a tax cut that was 50 times bigger than middle income families in Wisconsin. He didn’t have to do this. He could have used his leverage as one of two Senators from Wisconsin to help out working families. He didn’t. He could have used his power as one of the authors of the bill to close loopholes for large corporations and wealthy people. He didn’t. He chose to use his position to give an even bigger tax cut to wealthy business owners just like himself and his donors.

The tax code already had so many advantages for the largest companies. Yet they’re the ones that got the biggest rate cut in this bill, thanks in no small part to Sen. Johnson. He even held up the entire bill in the Senate for several days demanding to make the special deduction bigger, rigging the economy even further against working people.

Let’s put this into perspective. Sen. Johnson’s top priority was passing a special deduction that overwhelmingly benefits wealthy business owners and investors.  Nonpartisan tax policy experts have called the new deduction “Congress’ worst idea ever,” “the very worst kind of tax policy,” and “the worst provision ever even to be seriously proposed in the history of the federal income tax.”

They are not exaggerating.

In 2024, by one estimate, 61% of the provision’s benefit will go to the richest 1%. Some CEOs are gaming the new deduction to cut their tax bill by millions of dollars.

Sen. Johnson’s tax bill was also a massive tax cut for the biggest corporations. Since Sen. Johnson’s tax scam took effect, some of the biggest corporations have gotten away with paying $0 in federal corporate income tax “despite enjoying substantial pretax profits.” 26 companies have gotten away with paying no federal taxes since the law took effect in 2018, and 55 big corporations paid $0 on their 2020 profits.

Politicians like Sen. Johnson promised that these tax cuts were for the middle class and that they would trickle down to the middle class. They weren’t. They were overwhelmingly for corporations and for wealthy individuals. They’ve made the rich richer.

Worse, while Sen. Johnson has done everything in his power to give himself and his rich donors tax cuts that they don’t need, he voted against critical tax relief for working families when they needed it most. Just last year, he voted against expansions to the Child Tax Credit and the Earned Income Tax Credit, both of which put more money into people’s pockets in the face of rising costs.

The Child Tax Credit benefitted the families with a total of 1.2 million children in Wisconsin. It allowed millions of families in Wisconsin and elsewhere to afford child care so that they could continue to work. It helped people afford their groceries and monthly rent or mortgage payments ― and things for their children like after school activities and basics like clothes and school supplies. It helped reduce child poverty by a stunning 40%. But Sen. Johnson voted against this. He also voted against expanding the Earned Income Tax Credit, which would have helped more than 300,000 low-paid workers in Wisconsin without dependent children pay their bills.

How upside down can your priorities be that you’d vote against these vital lifelines for families struggling to make ends meet while giving yourself and your wealthy friends more tax cuts? Having said all of that, as the Senate begins to debate the Inflation Reduction Act, Sen. Johnson has a chance to change and support this commonsense proposal that will fight inflation, lower costs for families, stand up to the greed of special interests like Big Pharma, and make the tax code more fair. As I said before, I have my doubts about the Senator. But miracles happen. Let’s hope that for once, Senator Johnson puts the needs of Wisconsin families ahead of his own interests.


Seth Hanlon is a senior fellow at American Progress, where he focuses on federal tax and budget policy.