FacebookTwitterRedditEmail

Under Cover of Kavanaugh, Republicans Passed Huge Tax Cuts for the Wealthy

While Americans were transfixed by Senate hearings over Brett Kavanaugh’s alleged sexual assaults, House Republicans quietly passed another enormous tax handout for the wealthiest Americans.

Round one of this giveaway cost $2 trillion. Round two is even bigger — it would explode the deficit by more than $3 trillion. And once again, it’s largely a giveaway to the wealthiest Americans — and could mean devastating service cuts for ordinary people.

President Trump claimed the first tax plan would be “rocket fuel” for the economy, but there’s no evidence it’s done anything to improve the economic wellbeing of working families.

The centerpiece of the first plan was a massive tax cut for corporations. The corporate tax rate was reduced by 40 percent, plus a $400 billion tax break for multinational corporations on their trillions in accumulated offshore profits.

So it’s not surprising corporate profits leaped by over 16 percent in the second quarter of this year compared to the same three months last year — the best showing in six years. Meanwhile corporate tax payments are on schedule to come in $120 billion lower than in 2017.

But corporations aren’t sharing their winnings.

Trump guaranteed working families a $4,000 raise if corporate taxes were cut. Yet average real wages have been stagnant for the past year. Only 4 percent of American workers have gotten any kind of payout related to the corporate tax cuts, and most of those have been one-time bonuses, not permanent raises.

There’s no sign tax cuts have spurred hiring. Job growth under President Trump is merely a continuation of six years of job growth under President Obama — and Obama created more jobs in his last 19 months than Trump has in his first 19 months.

Cutting business taxes was supposed to cause an explosion of investment. Yet business investment has increased at a slower rate this year than at several periods during the Obama recovery.

Instead of investing in workers or equipment, companies are mostly buying back their own stock, a maneuver that artificially inflates the share price and rewards CEOs and wealthy investors. Corporations have announced $733 billion worth of stock buybacks since the Trump-GOP tax law was enacted — 103 times more than the $7 billion workers have gotten in bonuses and raises.

For the money McDonald’s spent on stock buybacks, it could’ve given every one of its 2 million employees that $4,000 raise President Trump promised them. But they didn’t.

The economic miracle envisaged by the tax plan’s backers hasn’t materialized. But the dire consequences predicted by the plan’s opponents certainly have. To cover the deficits created by their own tax cuts, Republicans want to cut trillions of dollars from essential public services.

Despite promising never to touch Medicare or Medicaid, President Trump is seeking $1.3 trillion in cutsto those programs and to the Affordable Care Act (ACA). The House GOP wants to cut a total of $5 trillion, including $2 trillion from health care. Trump and House Republicans would also slash funding for students in school and college, among many other service cuts.

Round two of the Trump-GOP tax cuts would only repeat the same destructive pattern: huge handouts to the rich, huge deficits, and huge service cuts for working families. The big difference is that the budget hole created would be much deeper this time, making the resulting cuts to services that much more severe.

No wonder they did it while Americans were distracted.

The sane policy would be to repeal the existing tax cuts for the wealthy and corporations and use the money raised to strengthen Medicare, Medicaid, and other essential services the American people rely on.

Frank Clemente is the executive director of Americans for Tax Fairness.

More articles by:
bernie-the-sandernistas-cover-344x550
April 06, 2020
Richard D. Wolff
COVID-19 and the Failures of Capitalism
W. T. Whitney
Donald Trump, Capitalism, and Letting Them Die
Cesar Chelala
Cuba’s Promising Approach to Cancer
David A. Schultz
Camus and Kübler-Ross in a Time of COVID-19 and Trump
Nomi Prins 
Wall Street Wins, Again: Bailouts in the Time of Coronavirus
Dean Baker
Getting to Medicare-for-All, Eventually
Dave Lindorff
Neither Pandemic Nor Economic Collapse is Going to Be a Short-Lived Crisis
Sonali Kolhatkar
Capitalism in America Has Dropped the Mask: Its Face is Cruel and Selfish
Ralph Nader
Trump’s 7 Pro-Contagion Reversals Increase the Coronavirus Toll
David Swanson
A Department of Actual Defense in a Time of Coronavirus
Ellen Brown
Was the Fed Just Nationalized?
Jeff Birkenstein
Postcards From Trump
Nick Licata
Authoritarian Leaders Rejected the Danger of a COVID-19 Pandemic Because It Challenged Their Image
Kathy Kelly
“He’s Got Eight Numbers, Just Like Everybody Else”
Graham Peebles
Change Love and the Need for Unity
Kim C. Domenico
Can We Transform Fear to Strength In A Time of Pandemic?
Mike Garrity
Alliance for the Wild Rockies Files Lawsuit to Stop Logging and Burning Project in Rocky Mountain Front Inventoried Roadless Area
Stephen Cooper
“The Soul Syndicate members dem, dem are all icons”: an Interview with Tony Chin
Weekend Edition
April 03, 2020
Friday - Sunday
Omar Shaban
Gaza’s New Conflict: COVID-19
Rob Urie
Work, Crisis and Pandemic
John Whitlow
Slumlord Capitalism v. Global Pandemic
Jeffrey St. Clair
Roaming Charges: Strange Things Happening Every Day
Jonathan Cook
The Bigger Picture is Hiding Behind a Virus
Paul Street
Silver Linings Amidst the Capitalist Coronavirus Crisis
Evaggelos Vallianatos
The Control of Nature
Louis Proyect
COVID-19 and the “Just-in-Time” Supply Chain: Why Hospitals Ran Out of Ventilators and Grocery Stores Ran Out of Toilet Paper
Kathleen Wallace
The Highly Contagious Idea
Kenneth Good
The Apartheid Wars: Non-Accountability and Freedom for Perpetrators.
Andrew Levine
Democracy in America: Sorry, But You Can’t Get There from Here.
Ramzy Baroud
Tunisia Leads the Way: New Report Exposes Israel’s False Democracy
David Rosen
Coronavirus and the State-of-Emergency Pandemic
Matthew Stevenson
Will Trump Cancel the Election? Will the Democrats Dump Joe?
Ron Jacobs
Seattle—Anti-Capitalist Hotbed
Michael T. Klare
Avenger Planet: Is the COVID-19 Pandemic Mother Nature’s Response to Human Transgression?
Jack Rasmus
COVID-19 and the Forgotten Working Class
Werner Lange
The Madness of More Nukes and Less Rights in Pandemic Times
J.P. Linstroth
Why a Race is Not a Virus and a Virus is Not a Race
John Feffer
We Need a Coronavirus Truce
Thomas S. Harrington
“New Corona Cases”: the Ultimate Floating Signifier
Victor Grossman
Corona and What Then?
Katie Fite
Permanent Pandemic on Public Lands: Welfare Sheep Ranchers and Their Enablers Hold the West’s Bighorns Hostage
Patrick Bond
Covid-19 Attacks the Down-and-Out in Ultra-Unequal South Africa
Eve Ottenberg
Capitalism vs. Humanity
Nicky Reid
Fear and Loathing in Coronaville Volume 2: Panic On the Streets of Tehran
Jonas Ecke
Would Dying for the Economy Help Anybody?
FacebookTwitterRedditEmail