Public budgets and the revenue systems that support them are some of the most important policy instruments of our government. They reflect our values and priorities through decisions on how to tax residents and businesses and spend these collective resources. These decisions impact what families have to spend on basic needs and invest in their future, define the size of the government and its role in the national economy, and affect the lives of all Americans. EOF hosts an Annual Budget and Tax Briefing to explore why federal and state budget and tax work matters to national, state, and local philanthropy.
See a summary of the first plenary session from our 2024 Budget and Tax Briefing below.
Federal Budget and Tax Outlook & Preparing for the 2025 Tax Debates
This year presents opportunities to get ready for transitions both politically and with the expiration of the Tax Cuts and Jobs Act in 2025. Learn about key battles and opportunities and what’s at stake and in play in 2024 and beyond.
Sharon Parrott
President
Center on Budget and Policy Priorities
Sarah Pray
Executive Director
Better Taxes for a Better America
Erica Clemmons Dean
Deputy Director
Family Values @ Work
Amy Matsui
Director of Income Security and Senior Counsel
National Women’s Law Center
Amber Wallin
Senior Policy and Outreach Director
State Revenue Alliance
Video Recording + Slides: The video recording and slides for this session are available by request to grantmakers who work for a qualifying philanthropy. Contact Cema Siegel at [email protected] for more information.
Framing:
With unresolved appropriations bills spilling over from 2023, a potential government shutdown looming, and the presidential election on the horizon, 2024 appears unlikely to witness any major federal budget and tax changes. Instead, this year presents an opportunity for funders to prepare for what will undoubtedly be an eventful 2025, regardless of the outcome of the election. Building the capacity of advocacy organizations and supporting coalition building, organizing, and messaging will be key to help ensure any federal tax and budget changes in 2025 benefit the people and families who need the most support.
Recap:
To better understand the need in the federal budget and tax field in 2024, we have to start with 2025. Next year, regardless of the outcome of the elections, there are five major decisions Congress has to make that have significant implications for working families across the country. First, they’ll need to pass a tax bill that decides whether to let the provisions from the 2017 Tax Cuts and Jobs Act expire or renew them and whether to raise or cut taxes in other ways as well. Second, Congress will need to contend with the expiration of the increased financial assistance that lowers the cost of Affordable Care Act marketplace coverage. They’ll also need to address the debt ceiling – which could be used as leverage to try to force harmful cuts and policy changes in a range of important program areas – and do appropriations. And lastly, Congress may need complete action on the farm bill (if it gets delayed into 2025 and Congress doesn’t just do another short-term extension). The farm bill debate, whenever it happens, will decide whether to provide better basic nutrition assistance to children and families or whether to make sweeping cuts to that assistance.
The outcome of the elections will have a major impact on how much risk these decisions carry versus how much opportunity they present. We desperately need to raise revenue to invest more deeply in people and communities, and the IRS needs to be properly funded to collect the revenue owed. The Biden budget proposes raising revenue by $5 trillion, ends the 2017 tax cuts for people with incomes above $400,000, and pays for tax cuts for those earning less than that. It invests in the Child Tax Credit and Earned Income Tax Credit, closes the Medicaid coverage gap, invests in the care economy and housing, and uses some of the new revenue for deficit reduction. By contrast, the most recent budget put forward by the Republican members of the House Budget Committee makes sweeping cuts to health coverage (which includes Medicaid, the ACA, and the Children’s Health Insurance Program) while retaining expensive tax cuts for higher-income earners and paving the way for even more tax cuts.
With so much hanging in the balance next year, 2024 is the year of preparation. How can funders help the field prepare for 2025? Building the capacity of the advocacy organizations that are bound to experience stretched workloads over the next year will be critical. Organizing will be key for ensuring alignment between the work happening on the ground and how it ties into federal policy. And messaging will play a pivotal role in raising public awareness of the connection between revenue and investments in communities and families.
Alignment isn’t only critical in the field – it’s also important among funders. The tax system is central to everything, and funders who haven’t typically invested in tax and budget issues should consider building alignment with those in this space. This is one of the goals of a new initiative to achieve an economically and racially just tax system by bringing a diverse group of funders and advocates together for peer learning, pooled funding, and coordination. This initiative includes a deeply aligned field table, Tax Equity for America, and funder table, Better Taxes for a Better America. Panelists discussed the importance of this opportunity to build cohesion in the field and create meaningful change and encouraged all funders in this space to consider how their investments align with field needs and opportunities.
When we hollow out our revenue base, we shrink our expectations of what government can do for people and communities.
— Sharon Parrott, Center on Budget and Policy Priorities
We want to help build a well-resourced and diverse ecosystem of effective and resilient organizations working for better taxes at the state and federal levels.
— Sarah Pray, Executive Director, Better Taxes for a Better America
We are authentically creating alignment between the work that happens on the ground and how it ties in to federal policy.
— Erica Clemmons Dean, Deputy Director, Family Values @ Work
We’re not in this to fight against each other for a bigger piece of a small pie. We are fighting for a bigger pie.
— Amy Matsui, Director of Income Security and Senior Counsel, National Women’s Law Center
This is a critical moment for the tax system over the next few years. One whose impacts will be felt in narrative and in resources for many years to come. So we know that the stakes are really high.
— Amber Wallin, Senior Policy and Outreach Director, State Revenue Alliance
Related Resources:
- WEBINAR: New Poll Shows Why Taxes Matter for the Care Economy, April 24, 2024 I 2:00 – 3:00 PM ET, Care for All with Respect and Equity (CARE) Fund.
- STATEMENT: President’s Budget Lays Out Sound Architecture for Key Policy Decisions That Will Shape the Nation’s Future, By Sharon Parrott, Center on Budget and Policy Priorities, March 11, 2024.
- REPORT: The 2017 Trump Tax Law Was Skewed to the Rich, Expensive, and Failed to Deliver on Its Promises: A 2025 Course Correction Is Needed, By Chuck Marr, Samantha Jacoby, and George Fenton, Center on Budget and Policy Priorities, March 5, 2024.
- STATEMENT: House-Passed Bipartisan Tax Bill’s Child Tax Credit Expansion Would Help 16 Million Children in Low-Income Families, By Sharon Parrott, Center on Budget and Policy Priorities, February 1, 2024.
- BRIEFS: Investing in the Care Economy Works: Learnings from the American Rescue Plan, The CARE Fund and The Century Foundation, February 2023-February 2024.
- FACT SHEET: Tax the Patriarchy Investments to Advance Gender and Racial Justice, National Women’s Law Center, December 2023.
- FACT SHEET: Talking Points: Raising Revenues: Why Taxes Matter for Care Advocates, National Women’s Law Center, March 22, 2023.
- REPORT: 2024 State Revenue Showcase Report, State Revenue Alliance.
Many thanks to our 2024 Watch Party Hosts!
