Even as the Republican Party pushed the Tax Cuts and Jobs Act through Congress in December 2017, critics were pointing out that it was filled with tricks and gimmicks meant to obscure the fact that it was a massive giveaway to corporations and the wealthy.
Now that the act has been law for more than and a year, the extent of its deception is coming into focus.
Writing for Vox, Matt Yglesias explained that the online furor from many supporters of President Donald Trump now filing their taxes appears to be a direct result of some accounting chicanery from the IRS designed to make the law more popular.
A new poll is finding broad support for an annual wealth tax on people with assets of at least $50 million, underlining support for taxing the rich.
The Hill-HarrisX survey released Wednesday found that 74 percent of registered voters back an annual 2 percent tax on people with assets over $50 million, and a 3 percent tax on people with assets in excess of $1 billion.
The poll showed support for the idea among people of all ages and races and from both political parties.
Mitch McConnel, Paul Ryan, Donald Trump and Mike Pence celebrating GOP tax cut for the rich bill. Credit: Official White House Photo
Well, we found one industry that benefitted from the Republican tax scam: U.S. banks.
According to Bloomberg News, major U.S. banks saw a $21 billion tax cut in 2018, beating the tax cut estimates the banks themselves projected they’d receive from the new law, all thanks to the Republican-passed tax bill.
And what did the banks do with that massive windfall?
Take a break from Trump and hear from regular Americans about the real state of our Union. Watch Mark Thornberry, who works at a General Motors supplier, talk about how everyone in his community has been hurt by recent layoffs at local manufacturing plants.
But It’s Been Great for the Super-Rich and the Corporations They Control
Donald Trump’s tax cut for the rich and the corporations they control is turning out to be a bust for the American economy.
It will burden taxpayers with at least $1.5 trillion more federal debt because, instead of boosting tax revenues through increased economic activity as promised; it has caused a sharp drop in revenue.
In addition, millions of residents of blue states are about to get hit with big federal income tax increases while many American expatriates who own businesses overseas are also facing unexpected new tax bills, especially if they prudently saved for old age under the systems of the countries where they now reside.
Federal tax revenues declined in 2018 while economic growth accelerated, undercutting the Trump administration’s insistence that the $1.5 trillion tax package would pay for itself.
It’s time to put to rest any notion that President Trump’s signature tax cuts are paying for themselves. Anyone who says otherwise is lying with numbers.
A year after the $1.5 trillion tax-cut package took effect, economic growth has accelerated, just as Republicans promised it would when pushing the law through Congress. Growth appears likely to hit 3 percent for 2018, after adjusting for inflation, which is a full percentage point higher than the Congressional Budget Office forecast for the year in 2017. Not all of that increase is attributable to the tax cuts, but some of it is.
That’s good news for Republicans’ longstanding claim that cutting taxes would provide such an economic bump that additional tax revenue would flow in to make up for what was lost through lower tax rates.
On December 20, 2017, the U.S. House of Representatives and Senate passed a new tax law, commonly known as the Tax Cuts and Jobs Act (TCJA).1Since the fall of 2017, the legislation, which provides huge tax cuts for the wealthy and corporations, has been consistently unpopular with voters.2 Its proponents, however, frequently pushed claims and promises that ranged from aggressive puffery to outright lies. A year after the law’s passage, the major promises made by the TCJA’s proponents have been exposed as hollow.3 Here is the reality of the TCJA’s impact thus far.
Tax cuts primarily benefit the wealthy
Promise: “Any reductions we have in upper-income taxes will be offset by less deductions, so there will be no absolute tax cut for the upper class.” – Treasury Secretary Steven Mnuchin, November 20164
Reality: The TCJA showered massive tax cuts on the richest Americans. The highest-earning 1 percent can expect tax cuts averaging more than $51,000 in 2018 alone—more than what the median American worker makes in a year.5 Even when considering the tax cuts as a percentage of income, the benefits for the richest far exceed those for the middle class. (see Figure 1) American voters have overwhelmingly recognized the tax bill as primarily a giveaway to the wealthy. President Donald Trump essentially admitted as much when he floated the idea of a 10 percent tax cut for the middle class only weeks before the 2018 midterm elections.6 The Administration has since dropped the idea.7
Trump promised his tax cuts would pay for themselves, boost economic growth, and raise wages. Instead, Trump’s tax breaks have blown up the deficit, failed to boost long-term growth, and left working Americans behind.
Corporations used their massive tax breaks for a record-high $1 trillion of stock buybacks, not to benefit their workers.
CNN: “Corporate America celebrated the first full year under the new tax law by rolling out a record-setting $1 trillion of stock buybacks.”
President Donald Trump and congressional Republicans celebrate Congress passing the Tax Cuts and Jobs Act on the South Lawn of the White House, Washington, D.C., December 2017. Credit: Chip Somodevilla, Getty Images
The Fiscal Damage Caused by the New Republican Tax Law
The law commonly known as the Tax Cuts and Jobs Act1 (TCJA), enacted in December 2017 by the Republican-controlled Congress, is substantially increasing federal deficits—and will for years to come. Regrettably, the law increased federal borrowing while addressing none of the nation’s most pressing challenges. In particular, after decades of growing income inequality and stagnant real wages for working-class Americans, the law conferred its largest benefits on the wealthiest Americans. The law did nothing to rebuild the nation’s infrastructure, advance education, or prevent climate change. Moreover, by increasing federal deficits and debt, the law will increase pressure to cut vital programs, including Social Security, Medicare, and Medicaid.
Trump and Republicans promised their massive tax cuts for the rich and big corporations would benefit workers, but that never happened. Here’s an update on the latest from the Trump tax law.
Corporate profit growth hit a 6-year high.
MarketWatch: “A torrid U.S. economy blazed a 3.5% pace of growth during the summer and boosted corporate profits to the highest rate in six years, fresh government figures show.”
Banks hit record-high profits.
Washington Examiner: “The U.S. banking sector reported record-high profits in the third quarter of 2018, thanks in large part to last year’s tax law.”
GM workers lost their jobs.
Detroit Free Press: “Congressional Democrats let loose on General Motors’ decision to close plants in Michigan and Ohio on Monday, saying that the company got millions in tax breaks heralded by President Donald Trump but that they haven’t saved workers.”
