Wealth Freed up by Ending Trickle Down
- ChatGPT shows here that by raising our Taxes/GDP by 4% we could fund world class benefits.
- That would make our Taxes/GDP = 29%
- The average Taxes/GDP in OECD nations (our peers) is 34%
- Think what we could do if we raised the Taxes/GDP another 5%
- for one thing we could ease the pain that AI and automation are causing to our labor force.
- and became only average.
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Definitions: OECD, Housing Choice Vouchers, BBB, NIIT Gap, ACA
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(ChatGPT)
Fiscal Policy ▪ End of Trickle-Down → World-Class Benefits
Ending Trickle-Down: Funding a Great Nation
Goal: Replace the era of tax breaks at the top with fair taxation and world-class public benefits for all Americans.
1) What “Ending Trickle-Down” Means
Definition: Reverse or close tax preferences that disproportionately benefit the top — capital-gains discounts, step-up in basis, pass-through gaps, deep corporate cuts — and strengthen the base.
Why it matters: The U.S. raises only ≈ 25 % of GDP in taxes vs. ≈ 34 % OECD average. Reclaiming even 2–4 % of GDP ($600 B–$1.2 T per year) creates the fiscal room peers use for modern benefits.
2) 2025-Scale Revenue from Ending Trickle-Down
| Reform | Est. Annual Revenue | Core Source |
|---|---|---|
| Equalize tax rates on capital gains & qualified dividends | ≈ $114 B / yr | Treasury Tax Expenditures FY 2025 |
| End “step-up in basis” at death (tax gains or carryover) | ≈ $23–57 B / yr | CBO / CRFB options |
| Close NIIT gap on high-income pass-throughs | ≈ $44 B / yr | CBO / CRFB |
| Raise corporate rate 21 % → 28 % | ≈ $95 B / yr | CBO options |
| Subtotal (baseline) | ≈ $293 B / yr | — |
| Loophole + base-erosion fixes (intl.) | → $300–$400 B / yr | Composite |
| Move toward OECD average (+ 2–4 % GDP) | → $600 B–$1.2 T / yr | OECD Revenue Statistics |
Estimates are order-of-magnitude and depend on design & behavioral response.
3) What That Can Buy
Package A — Immediate, visible improvements (≈ $300–$400 B / yr)
| Program | Annual Cost | Description |
|---|---|---|
| Paid family & medical leave (≈ 12 wks) | ≈ $20 B | Partial wage replacement (CBO) |
| Enhanced ACA premium subsidies | ≈ $35 B | Make enhanced credits permanent |
| Universal pre-K (federal share) | ≈ $11 B | State partnerships |
| Affordable child care (≤ 7 % income cap) | ≈ $60–70 B | BBB-style baseline |
| Restore expanded Child Tax Credit | ≈ $100–120 B | 2021 structure, monthly |
| Medicare dental, vision & hearing | ≈ $30–40 B | Add long-neglected coverage |
| Housing Choice Vouchers (½-scale) | ≈ $50–60 B | Serve ~½ of eligible renters |
| Free community college (federal share) | ≈ $8–15 B | America’s College Promise model |
| Total | ≈ $306–356 B / yr | Within the $300–$400 B lane |
Package B — World-Class Breadth (≈ $750–$950 B / yr ≈ 3–3.5 % GDP)
| Add-On | Annual Cost | Description |
|---|---|---|
| Universal Housing Choice Vouchers | +$118 B | Serve all eligible renters |
| Deeper child-care guarantee | +$30–40 B | Universal ≤ 7 % income cap |
| Strengthen ACA (0-premiums / tight OOP caps) | +$25–40 B | Low-income relief |
| Senior cost-sharing relief (Parts B/D) | +$20–30 B | Beyond dental/vision/hearing |
| Tuition-free public undergraduate (first-dollar) | +$60–100 B | Federal ≈ ⅔, states ≈ ⅓ |
| Total | ≈ $750–950 B / yr | Comparable to high-benefit OECD peers |
4) Free Higher Education — Quick View
| Level | Federal Cost / yr | Notes |
|---|---|---|
| Community College (2-yr) | $8–15 B | America’s College Promise models; cost varies by state uptake |
| Public Undergraduate (4-yr, first-dollar) | $60–100 B | “College for All” style; federal ≈ 67 %, states ≈ 33 % |
5) What Is “Major Voucher Expansion”?
The Housing Choice Voucher (Section 8) program currently serves only ≈ 1 in 4 eligible households. A “major expansion” means scaling toward most or all eligible renters:
- Half-scale (fits Package A): + $50–60 B / yr
- Universal (Package B): + $118 B / yr → ≈ 9 M people lifted above poverty
6) Bottom Line — Fiscal Perspective
Measured as a share of GDP, these options fit comfortably within normal democratic budgets:
- Package A (≈ $300–$400 B / yr): ≈ 1.0–1.3 % of GDP. Raises U.S. tax revenue from ≈ 25 % → ≈ 26–26.5 % of GDP — still well below the ≈ 34 % OECD average.
- Package B (≈ $750–$950 B / yr): ≈ 2.7–3.4 % of GDP. Would lift U.S. revenues toward 28–29 % of GDP — similar to Canada (33 %) or the U.K. (31 %), and below Nordic levels (35–38 %).
In short: Ending trickle-down could fund a world-class suite of benefits while keeping the U.S. a low-tax economy by global standards. What we lack is not money — but political will.
Printable References (Copyable URLs)
- Treasury Tax Expenditures FY 2025 (PDF): https://home.treasury.gov/system/files/131/Tax-Expenditures-FY2025.pdf
- CBO Budget Options 2025–2034: https://www.cbo.gov/publication/60557
- CRFB – CBO’s Revenue Options Summary: https://www.crfb.org/blogs/cbos-revenue-savings-options
- OECD Revenue Statistics 2024: https://www.oecd.org/en/publications/2024/11/revenue-statistics-2024_6e88b46e.html
- CBO – Paid Family & Medical Leave (2021): https://www.cbo.gov/publication/57631
- CBO/JCT – ACA premium tax credits overview (PDF): https://www.cbo.gov/system/files/2025-09/61734-Health.pdf
- CRS – Universal Pre-K brief (IN11751): https://www.congress.gov/crs_external_products/IN/PDF/IN11751/IN11751.13.pdf
- CBO – Child Care/Pre-K analysis (BBB context): https://www.cbo.gov/publication/57630
- PGPF – Costs of expanding CTC & EITC: https://www.pgpf.org/article/what-are-the-costs-of-permanently-expanding-the-ctc-and-the-eitc
- Brookings – Medicare dental/hearing/vision options: https://www.brookings.edu/articles/options-for-containing-the-cost-of-a-new-medicare-dental-hearing-and-vision-benefit/
- KFF – Medicare dental/hearing/vision coverage: https://www.kff.org/health-costs/dental-hearing-and-vision-costs-and-coverage-among-medicare-beneficiaries-in-traditional-medicare-and-medicare-advantage/
- Urban Institute (2023) – Housing Vouchers & Poverty (PDF): https://www.urban.org/sites/default/files/2023-08/How%20Much%20Could%20Full%20Funding%20and%20Use%20of%20Housing%20Choice%20Vouchers%20Reduce%20Poverty.pdf
- CBPP – Policy Basics: Housing Choice Vouchers: https://www.cbpp.org/research/housing/policy-basics-the-housing-choice-voucher-program
- America’s College Promise (House Ed & Workforce): https://edworkforce.house.gov/news/documentsingle.aspx?DocumentID=399161
- CBO – College Affordability Act Score (2019): https://www.cbo.gov/system/files/2019-12/hr4674.pdf
- EducationData.org – How Much Would Free College Cost (2025): https://educationdata.org/how-much-would-free-college-cost
- Sanders “College for All” Fact Sheet: https://www.sanders.senate.gov/wp-content/uploads/college-for-all-fact-sheet-2019.pdf
- NCES – Postsecondary Institution Revenues: https://nces.ed.gov/programs/coe/indicator/cud/postsecondary-institution-revenue
- SHEEO – State Higher Education Finance FY 2024: https://sheeo.org/shef_fy24/
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