Republicans have done a lot of damage to the American tax code over the years by giving massive and harmful cuts to the wealthy and corporations. But if they win back the White House and get the chance to implement Project 2025, that damage will be supercharged to another level.
We told you about Project 2025 on July 4th, and it’s since received a great deal of buzz in the media. Led by the Heritage Foundation, over 50 conservative organizations worked together to publish Project 2025 in April of last year, just as the Republican presidential primary began to heat up. Essentially, it is a 920-page policy blueprint that these organizations intend to guide the next Republican president. It has no fewer than 30 chapters and calls for sweeping changes to everything from reproductive rights, veteran affairs, the power of the executive branch, and immigration.
Project 2025 would also institute massive changes to the tax code. While this part of the Heritage-led manifesto is receiving far less media attention than others, it’s no less alarming. Below are just a few of the major tax changes that Project 2025 would usher in:
- Create two brackets with lower rates for ordinary income taxes – There are currently seven brackets for taxes on ordinary income, with a top marginal rate of 37%. There already aren’t enough brackets, with the 37% rate covering all income over $731,000, but Project 2025 would make a bad situation worse by reducing the number of brackets to just two – with a 15% tax on taxable income below $168,000 and a 30% tax on taxable income above that level. According to estimates from Brendan Duke, the Senior Director for Economic Policy at the Center for American Progress, under this policy, a family of four with $100,000 in annual income would pay $2,600 in additional income tax, while a family of the same size making $5 million a year would receive a $325,000 tax cut.
- Reduce the corporate income tax rate to 18% – The 2017 Tax Cuts and Jobs Act (TCJA) permanently reduced the corporate income tax rate from 35% to 21%, and in so doing, gave wealthy shareholders and executives a windfall. Project 2025 would further reduce this rate to 18% and give an even greater bonanza to the rich.
- Reduce the tax on capital gains and dividends to 15% – Currently, there are two tax brackets for capital gains and dividends: 15% and 20%. Project 2025 would do away with the 20% bracket entirely and tax capital gains and dividends at 15%. Taxing capital gains over $1 million at such a low rate is already an absurd giveaway to the wealthy that values wealth more than work, but considering how few Americans even own stock, and considering the vast majority of the publicly traded stock in this country is concentrated in the hands of the wealthy, this is just a further gift to the rich with no benefit for the average American.
- Repeal all tax changes made by the 2022 Inflation Reduction Act – Democrats’ Inflation Reduction Act took important steps in making the wealthy and corporations pay their fair share in taxes. Among other things, it created a 15% corporate minimum tax and a 1% excise tax on stock buybacks. Project 2025 would do away with all of it.
- Reduce the estate and gift tax to 20% and make permanent the TCJA’s exemption amount increase – The top marginal rate on the estate and gift tax is currently 40%. The TCJA temporarily increased the threshold at which estate and gift taxes kick in: in the 2024 filing season, this threshold was $27.22 million for a married couple. As if letting that much wealth pass from generation to generation tax-free wasn’t absurd enough, Project 2025 would reduce the top rate on estate and gift taxes to 20% and also make permanent the TCJA’s exemption threshold hike.
- Freeze IRS funding and replace top officials with appointees – Project 2025 calls for the budget of the IRS to be held constant in real terms, which essentially means that it would rescind the funding allocated to the agency by the Inflation Reduction Act. This money has already been used to recoup over $1 billion in unpaid taxes by the very wealthy and significantly improve taxpayer services. It would also replace many of the top positions at the IRS with presidential appointees, ensuring institutional policy and process knowledge would not be retained from administration to administration.
As the Republican party’s now-official presidential nominee, Donald Trump has tried to distance himself from Project 2025 in recent days. Earlier this month, Trump posted on his Truth Social platform: “I know nothing about Project 2025. I have no idea who is behind it. I disagree with some of the things they’re saying and some of the things they’re saying are absolutely ridiculous and abysmal.” As with most things Trump says, it’s difficult to believe he’s telling the truth, considering that Project 2025 was written by more than 20 officials in the last Trump administration. (We also didn’t know it was even possible to disagree with something that you “know nothing about,” but that’s beside the point.)
But perhaps the most telling sign that Trump is more amenable to Project 2025 than he’s letting on can be found in his new running mate, J.D. Vance. Vance was elected to the Senate in 2022 and has made a name for himself over the last few years as one of the biggest MAGA disciples. He also has close ties to the Heritage Foundation and Project 2025. Just days after the Heritage Foundation and its allies published Project 2025 last year, Vance gave a speech at the organization’s 50th Anniversary Leadership Summit where he said: “[The Heritage Foundation] is going to play a major role in helping us figure out how to govern at the White House, at the Senate, at the House, and all across our great country.”
Even before his time in office, Vance has always prided himself as an economic populist. We’ll give it to him – he’s had his good moments. He joined forces with Senator Sheldon Whitehouse (D-RI) back in March to introduce a tax on corporate mergers and also has come out against cutting the corporate tax rate further. But if there’s one thing to glean about Vance from his past record, it’s that he’s willing to renege on even his most noble positions if it means advancing himself.
When Trump first ran for president in 2016, Vance didn’t vote for him and also made strong remarks against him. But he has since very obviously changed his tune. In 2020, Vance jumped on board the election denial train and has yet to hop off. And after his billionaire benefactor, Peter Thiel, introduced him to Trump at Mar-a-Lago, Vance received Trump’s endorsement in his 2022 Senate bid. This is all to say that, even if Vance is saying now that he doesn’t support some of the tax elements of Project 2025, he’s given us no reason to believe he’s a man of his word, and he’s been awfully cozy with the Heritage Foundation lately.
We’re certainly living in a distressing, chaotic, and tumultuous time in America, and Project 2025 and the actors behind it – including Trump and Vance – are playing a large role in driving our national angst. The plans for the conservative movement have never been written down in clearer, starker, or more alarming terms, and we must do everything we can to fight back against this regressive agenda, take the political power back from the billionaire class, and achieve economic prosperity for all. Rest assured that the Patriotic Millionaires will continue to do our part.