What Would U.S. Tax Policy Look Like If It Reflected the Interests of Average Citizens Rather Than Big Donors?

Tax policy is one of the most powerful levers in shaping economic life. It determines how wealth is distributed, how much revenue the government collects, and who shoulders the burden of funding public services.

Yet in the United States, many critics argue that the tax code reflects the priorities of large corporations, wealthy individuals, and their lobbyists rather than the concerns of ordinary citizens.

If tax policy were instead written with the interests of average Americans at its core, it would likely look strikingly different from the current system.

1. The Current Imbalance

Today’s tax system has been deeply influenced by decades of corporate lobbying and campaign finance dependence. The consequences include:

• Low corporate effective tax rates: Despite a nominal 21% corporate tax rate (after the 2017 Tax Cuts and Jobs Act), many multinational corporations pay single-digit effective rates or nothing at all, due to offshore shelters and loopholes.

• Preferential treatment for capital income: Wealth from dividends, capital gains, and carried interest is taxed at lower rates than wages, disproportionately benefiting the wealthy.

• Complexity that favors insiders: Corporations and billionaires can afford armies of lawyers and accountants to exploit deductions and credits, while average taxpayers have limited options.

• Growing inequality: As wages stagnate and wealth concentrates, tax policy often exacerbates rather than mitigates inequality.

Against this backdrop, imagining a tax system designed around average citizens means asking: what do they need most?

2. Core Priorities of Average Citizens

Surveys from Pew Research, Gallup, and others consistently show that ordinary Americans want:

1. Fairness – A belief that the wealthy and corporations should pay their share.

2. Simplicity – A system they can understand and comply with easily.

3. Support for public services – Funding for healthcare, education, infrastructure, and retirement security.

4. Economic opportunity – Tax rules that encourage entrepreneurship, upward mobility, and job creation.

If these values shaped policy, the U.S. tax code would take a very different form.

3. Features of a Citizen-Centered Tax System

A. Progressive Individual Taxation

• Higher rates for the ultra-wealthy: Marginal tax rates at the very top would return closer to post-WWII levels (e.g., 50–70%), affecting only the richest households.

• Closing capital gains loopholes: Investment income would be taxed at the same rates as wages, ensuring billionaires pay at least the same share as teachers and nurses.

• Buffett Rule Enforcement: No household making over $1 million would pay a lower effective tax rate than the middle class.

This approach reflects public opinion—polls consistently show majorities support higher taxes on the very wealthy.

B. Corporate Accountability

• Minimum corporate tax: Regardless of deductions, all large corporations would pay a minimum effective tax rate (e.g., 15–20%) on U.S. profits.

• End offshore profit shifting: Stronger international rules and penalties for booking profits in tax havens like Bermuda or Ireland.

• Eliminate special-interest subsidies: Loopholes benefiting specific industries (oil & gas, private equity, etc.) would be phased out unless tied to broad public benefits like clean energy.

Such reforms would align corporate tax responsibility with what ordinary Americans expect—corporations that benefit from U.S. infrastructure and consumers should contribute proportionately.

C. Relief for Working Families

• Expanded standard deduction and child credits: More generous credits for dependents, childcare, and education.

• Payroll tax relief: Reducing regressive payroll taxes (which disproportionately affect lower- and middle-income workers) while backfilling Social Security funding with revenue from high earners.

• Simplified filing: Pre-filled returns or automatic filing for most households, eliminating the costly and stressful annual process.

These measures would reduce the financial pressure on everyday households while making tax compliance straightforward.

D. Support for Small and Medium Businesses

• Graduated corporate tax brackets: Smaller firms would face lower rates, while very large corporations would face higher rates.

• Streamlined compliance: Simplified tax filing for businesses under a revenue threshold (e.g., $25 million).

• Targeted incentives: Credits tied to job creation, training, and community investment—not financial engineering.

Such reforms would give entrepreneurs and local businesses a fairer shot against corporate giants.

E. Transparent and Accountable Process

• Public-interest reviews of tax bills: Independent analysis of how proposals affect households across income levels, published before passage.

• Lobbying disclosure: Lawmakers would have to report when tax provisions originate from corporate lobbyists.

• Sunset clauses for loopholes: Any deduction or credit would automatically expire unless reauthorized after demonstrating broad benefits.

This would ensure tax policy evolves with public needs rather than becoming permanently captured by special interests.

4. Potential Benefits

If tax policy truly reflected average citizens, the outcomes could include:

• Reduced inequality: A more progressive system would narrow the gap between the ultra-wealthy and the rest of society.

• Increased revenues: By closing loopholes and taxing corporations fairly, government could fund infrastructure, healthcare, and education without ballooning deficits.

• Greater trust in government: Citizens would see evidence that policymakers work for the public, not for donors.

• Boost to entrepreneurship and mobility: Simplified rules and fairer treatment of small businesses could foster innovation and local job creation.

5. Obstacles to Realignment

• Entrenched lobbying power: Corporations spend billions annually to shape tax policy.

• Campaign finance dependence: Lawmakers rely on wealthy donors, creating a feedback loop.

• Complexity of international finance: Globalized capital makes enforcement of corporate taxation challenging.

• Political polarization: Even broadly popular reforms often stall due to partisan gridlock.

These obstacles underscore why, despite public support for fairer taxation, the system has remained skewed.

6. Conclusion

If U.S. tax policy were written with average citizens at the center, it would be simpler, more progressive, and more transparent. Corporations and the ultra-wealthy would pay their fair share, small businesses and families would see relief, and public revenues would support broadly beneficial services rather than entrenched interests.

The difference between this vision and today’s reality highlights the power of money in politics. Until lobbying reform, campaign finance changes, or stronger safeguards for transparency are implemented, tax policy is likely to remain tilted toward big donors.

Yet the blueprint exists: by listening to the values and priorities of ordinary Americans, policymakers could build a tax system that strengthens democracy, supports shared prosperity, and restores trust in government.