By ED FINKELSTEIN
After all the hoopla, the truth finally comes out from none other than President Donald J. Trump talking to his rich friends at his ritzy Mar-a-Lago resort:
“You all just got a lot richer,” President Trump said at a Dec. 22 dinner celebrating passage of the tax cut that was, in his own oft-repeated deceptive words, supposed to be “one of the great Christmas gifts to middle-income people.”
In reality, by his own admission, the new tax law will do just what the president privately bragged: make millionaires into billionaires while throwing a few bones to working Americans – a temporary appeasement as those scraps for working people will expire in five years, while the millionaire and billionaire tax cuts remain permanent.
The President’s “richer” comment was picked up by NBC, Newsweek, CBS and MSNBC, among others. That his remarks were reported is obviously something he didn’t want to happen, but it’s not as if the true aim of the tax bill was a secret.
IF YOU WERE LISTENING…
Anyone reading or listening to the news saw it coming:
• Last month a Wall Street Journal editor asked a room full of CEOs to raise their hands if the corporate tax cut being considered in Congress would lead them to invest more. Very few hands went up. Gary Cohn, president Donald Trump’s economic adviser, asked: “Why aren’t the other hands up?”
Billionaire Michael Bloomberg answered that question in a Dec. 15 article in TIME magazine: “We don’t need the money.
“Corporations are sitting on a record amount of cash reserves: nearly $2.3 trillion,” Bloomberg said. “That figure has been climbing steadily since the recession ended in 2009, and it’s now double what it was in 2001. The reason CEOs aren’t investing more of their liquid assets has little to do with the tax rate.”
• As reported last month in the Labor Tribune, 400 American millionaires pleaded with Trump in a letter to NOT to cut their taxes but instead RAISE them on millionaires who can afford it.
“Wealthy people are saying it themselves: We don’t need a tax cut,” said Mike Lapoham, a paper mill owner in upstate New York who inherited his wealth.
“I think a tax cut is absurd. Republicans are saying we can’t afford to spend money, but we can afford to give rich people a huge tax break. This makes no sense,” said Bob Crandall, former chief executive for American Airlines.
“Large corporations and wealthy people like me are already sitting on more than enough cash, and wildly inflated portfolios,” said Abigail Disney, Walt Disney’s grandniece. “Putting more cash in our hands will do nothing for the economy; truly the only thing this tax bill will stimulate is more campaign contributions from wealthy donors.”
In their letter, the 400 wealthy signers pleaded:
“We call on Congress to raise our taxes to bring in additional much-needed revenue and to restore investments to vital services. Doing so will help create jobs, strengthen the middle class, and ensure America’s economic success. Under no circumstance should tax reform lose revenue, especially to provide tax cuts to the wealthy and corporations.”
Bloomberg candidly summed up the real impact of the tax law:
• INEQUALITY– It does nothing to boost real wages while making health insurance more expensive. If Congress wanted to raise real wages and reward work, there is a simple and proven way to do it: expand the earned income tax credit. Instead, it seems to believe that lower corporate tax rates will magically lead to higher wages, which fundamentally misunderstands how labor markets work.
In addition, by eliminating the requirement that individuals buy health insurance, many young and healthy people will drop out of the marketplace, causing health insurance premiums to rise for everyone else. This is nothing more than a backdoor tax increase on health care for millions of middle-class families that will leave them with less disposable income for savings, investment and spending.
• EDUCATION – It takes money away from schools and students. By limiting the deduction for state and local taxes, the new tax law will make it harder for localities to raise money for education. The burden will fall heaviest on cities with poor students, making it harder for millions of children to escape from poverty — and leaving more and more businesses with fewer qualified job applicants.
• INFRASTRUCTURE – It restricts our ability to invest in infrastructure. Restricting state and local tax deductions will mean less local investment for infrastructure. By raising deficits, the bill will constrain federal infrastructure spending. Our airports, railways and roads are in desperate need of modernization, and our energy grids are vulnerable and inefficient. Yet spending on those and other needs, which acts as a catalyst for private investment, will become more difficult.
• SENIOR SECURITY – It makes it harder to control the costs of Medicare and Social Security. The bill’s $1.5 trillion cost will make it more difficult for taxpayers to afford Medicare and Social Security for the baby boom generation, which is now hitting retirement.
• DEFICITS – Republicans didn’t grapple with (the bill’s overall) costs. Instead, they kicked the can down the road. Ignoring the bill’s price tag, or pretending we needn’t worry about deficits, is like ignoring climate change or pretending we needn’t worry about its effects.
“The tax bill does nothing to address these challenges. In fact, it makes each of them worse,” Bloomberg said.
TOO LATE FOR WORKERS
The truth will prevail some years down the road, but for American workers it will be too late. The suffering will have begun… and will continue.
We need to remember who stood up for Missouri and Illinois workers while this devastating tax bill was being rammed through for the richest of the rich.
Illinois Senators Tammy Duckworth and Dick Durbin both stood against the tax bill.
Missouri Senator Roy Blunt (R) refused to stand up for Missouri workers and supported the Trump Tax Debacle all the way.
Missouri Senator Claire McCaskill stood up for workers. That’s something we should also remember next November when she’s up for re-election. The millionaires and billionaires benefiting from the tax bill will be pouring millions into the campaign to defeat her.