A Movement for Tax Justice: Our Moment is Now

February 29, 2024

A Movement for Tax Justice: Our Moment is Now

By: Kyle Huelsman

The tax justice movement has arrived at a historic inflection point. One path leads toward massive cuts in government spending, divesting unprecedented levels of funding from our schools, our affordable housing stock, and our broader social safety net. The other path leads toward the ultrawealthy and corporations paying what they owe in taxes, enabling us to fund our future. The next two years will determine whether we can build together, across states and across movements, to fight for the second path, and realize a government that works for us all; or whether we will be overpowered by our opposition and become resigned to the worst possible outcome.   

The root of this crisis has two main causes: the loss of federal funds and declining state revenue. The American Rescue Plan Act (ARPA) was hailed as a once in a generation investment in states, and for good reason: it provided $350 billion in emergency funding to respond to the COVID-19 emergency. ARPA funds, however, are expiring. States have until the end of 2024 to designate those federal funds, and until 2026 to fully spend down the remaining balance. Simultaneously, structural budget imbalances are starting to appear across the country. California, New York, and Pennsylvania face dramatic, multi-billion dollar deficits heading into 2024, but are by no means the only states with serious issues. Based on budget analyses of states published in late 2023, roughly half of Americans live in states that report short-term budget gaps, potential long-term deficits, or both (Pew, 2024). Across the board, we are seeing systemic and chronic budget shortfalls, which will outlast even the best resourced rainy day fund. 

The collision of these two events has created the perfect storm for state government deficits. In no uncertain terms, there are only two possible choices as we move into 2025 and 2026: states can cut critical government programs or increase revenue. Let us be clear, if we do not act decisively to raise revenue from the ultra-wealthy and corporations, the default option is massive budget cuts. We need only look to the Great Recession, when states collectively extracted billions of dollars from their budgets, creating gaps in education funding that persisted over a decade later (CBPP, 2017). 

  For the 11 states participating in the Tax Justice Initiative cohort, our theory of change is simple: we must maintain and expand our power over 2023 and 2024 in order to be positioned, and strong enough, to win in 2025 and 2026. This frame will be critical to keep us focused on the medium-term objective, while also staying motivated in the face of unfavorable legislative environments throughout 2024. 

We know that transforming state tax systems often takes years, which is why SIX and State Revenue Alliance (SRA) are supporting a broad, multi-year effort. The investigative reporting piece from the Center for Public Integrity (The Long Struggle Over Taxing the Rich) lays out the rationale behind our multi-year, multi-state strategy to counter the entrenched power and resources of our opposition, sharpen the inside/outside the building strategy of our allies, and support tax justice across the country. If we were to judge the success of the Tax Justice Initiative on the outcomes of 2023 alone, we would see a modest level of success. In 2024, we are already surpassing the high watermark of the previous year, but will face challenging political headwinds in many states. However, if we step back into a multi-year orientation, we can see the essential building blocks of transformational change. Examples include: favorable polling (70%-78% support for wealth taxes in TJI cohort states), stronger revenue coalitions and legislative champions, and deeper penetration of our message – in 2023, we received 189 media mentions and stories on the Tax Justice Initiative, including top tier national press from:  The Washington Post; CBS News; Los Angeles Times; Yahoo! Finance; Bloomberg News; The Guardian; Business Insider; Associated Press; CBS News; Wall Street Journal; Forbes; In These Times; CNBC; and the New York Times in January 2024.

We saw important progress in 2023 with record numbers of cosponsors (256 total), and incredible efforts so far in 2024 - highlighting both the deep popularity of these reforms and the rewards of intentionally building power with legislative champions. Yet, our opposition hired more lobbyists, spent more on paid advertisements, and received more earned media coverage. No matter how popular our policies are outside state capitols, the disproportionate level of resources spent within legislative chambers create a real power imbalance. There is only one answer to this larger problem: we must relentlessly compete for more power because we don’t have enough today. Power is measurable, and we need to stay laser focused on our ability to increase the level of influence inside and outside the building. 

For the champion legislators and movement partners leading this work at the state level, we have your back. As legislative leadership and Governors dismiss your reforms as “radical” and “untimely”: know that there is a eleven state network moving forward toward a common goal; know that the biggest revenue measures of the past decades faced the same criticism in the years before passage; know that the pushback is a reflection of the power that you are amassing. The 2024 legislative sessions may largely be a difficult and frustrating time for folks on the ground, but every ounce of power we build this year will mean the difference between success and failure when the moment is ready in the next legislative session. When we build together, over the long-term, we are unstoppable!

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