Spot on. Excellent. And absolutely sickening! It is so incredibly important to continue to shine bright light on the truth. The endless lies — including that Trump’s economic policies and tax cuts benefit anyone other than the very wealthy — just make my head spin and my heart hurt. We Americans need to stop being bamboozled!! We need to inform ourselves, root into reality, and unite in the struggle for a truly just, sustainable, caring, and peaceful world. — Molly
The president promised a return to shared prosperity, but the benefits of his economic policies only bubbled up to the richest
Donald Trump is gifted at marketing stodgy, old-line Republican policies as though they’re bold, transgressive, and new. Think of it as policy laundering. And nowhere has this deception been executed to more damaging effect than in Trump’s handling of the economy.
As a candidate, Trump positioned himself as a different kind of Republican. With all the integrity of a late-night infomercial host, Trump rinsed away the taint of decades of GOP economic mismanagement. In a spin cycle, he promised his plans would bring prosperity to a long-overlooked working class. But what Trump ultimately delivered is what all Republican presidents have delivered since Ronald Reagan: bubbly new wealth for the already rich, while putting the middle-class through the wringer.
This cycle has played out twice in plain view: First with Trump’s 2017 tax cut, which showered wealth on the richest, offering the middle class a drop in the bucket, and now with a pandemic response that has inflated the wealth of billionaires, even as main-street America reels under a Depression-level crisis. If Donald Trump fooled you once, shame on him. If he fools you twice, shame on you.
In 2016, Trump campaigned as an iconoclast, blasting former Republican standard bearers Mitt Romney (“doesn’t have a clue”) and Paul Ryan (“very weak”). In contrast to the 2012 GOP ticket, Trump didn’t divide America into industrious “makers” and parasitic “takers,” blaming the poor for their lack of pluck. Trump instead blamed America’s economic woes on the greed of self-interested elites. He posed as a selfless billionaire, vowing to betray his own interests to champion America’s “forgotten men and women” — rhetoric that echoed Richard Nixon and which is code for the white working class. (This “forgotten man” framing has always erased working people of color, whose struggle has never been the concern of the modern Republican party.)
Trump’s “Make America Great Again” sloganeering tapped into honest nostalgia for a more economically just America. The post-World War II boom created broad prosperity: The wages of the bottom 90 percent of Americans grew in line with the overall economy. But that trajectory flat-lined in the mid-1970s. And the share of the nation’s income accruing to the bottom 90 percent shrank from close-to-half to barely one-third. A new study by the RAND Institute offers insight into how different America could be today had the post-war trend continued: The median worker would be making $57,000 a year, instead of just $36,000. In aggregate, the 90 percent have been $47 trillion richer, taking home an extra $2.5 trillion in 2018 alone. What happened to the bottom’s share of America’s expanding economic pie? Economist Kathryn Edwards, co-author of the RAND study, explains simply: “The top ate it.”
Trump’s political insight was keen, says Brown University political economist Mark Blyth, co-author of Angrynomics. “There was a readymade coalition of people who had not benefited from the last 40 years of prosperity,” he says. “Trump knows how to work a room. This guy walks in and says, ‘I get it. I’m your voice. It’s China; they’ve taken all your jobs.’” Trump leveraged this “politics of recognition,” says Blyth, to create a powerful bond. For these hardscrabble voters, Trump was someone who not only saw their struggle, but mirrored their resentment. And that connection has allowed Trump to “get away with incredible upward wealth redistribution — to him and his class,” says Blyth, “yet still maintain a sense of connection to the people that he’s hurting the most.”
The Spin
In office, the only truly unconventional thing about Trump’s economic leadership has been the shamelessness of his lies. Marketing his tax cut, Trump swore up and down that “the rich will not be gaining at all with this plan.” Speaking of his own finances, he insisted that the bill was “going to cost me a fortune … believe me.” Signing the cut into law in December 2017, Trump hyped it as “one of the great Christmas gifts to middle-income people.”
These weren’t minor distortions. They were bald-faced lies. “Trump is part of a tradition of phony populism, of saying he’s going to help communities that are left behind, and then advancing an agenda that does the opposite,” says Chuck Collins, director at the Program on Inequality at the Institute for Policy Studies and co-editor of Inequality.org.
Establishment figures like GOP Senate Majority Leader Mitch McConnell joined Trump’s carnival of prevarication. The federal government was already spending far more than it took in tax revenue. Cutting taxes would require taking on massive new debt — the Congressional Budget Office projected a 10-year cost of the Trump tax cut at $1.5 trillion. When Republicans are out of power they use America’s debt as a cudgel against Democrats, insisting the country can’t afford programs that boost the living standards of workers or even true investments like infrastructure spending. But the GOP voiced little concern about the ability to afford this tax cut. McConnell papered over the contradiction by telling a whopper: that the tax cut would spark so much growth that government coffers would hold steady or even rise: “We are totally confident this is a revenue-neutral bill,” McConnell insisted, “and probably a revenue producer.”
The Bubbles
Contrary to all of Trump’s assurances, his tax bill generated a windfall to the 1 percent. “It’s the continuance of 40 years of upward siphoning of the nation’s wealth to a tiny elite,” says Blyth. Income-tax cuts generated an extra $50,0000 a year for America’s highest earners. But the real benefit, $1.35 trillion, went to corporations — and by extension to their top executives and shareholders.
Securing a massive corporate-tax cut was the feature of the tax bill that Trump personally insisted on, and Republicans in Congress responded by slashing the corporate-tax rate from 35 to 21 percent. In the past, “tax reform” has closed loopholes while lowering rates, to hold down the cost. But the new tax code remained riddled with the kind of carveouts that reportedly allowed Trump to pay nothing in taxes in 10 of the previous 15 years and only $750 in tax in 2017, according to The New York Times.
The new cuts, designed to favor corporations, worked out better for big business than even the architects of the law intended. Under the new code, the effective corporate tax — what companies really pay after taking advantage of loopholes — fell from an already low 17.2 percent to just 8.8 percent. Corporate-tax revenue in 2018 fell by $135 billion compared to baseline projections. Many companies ended up paying nothing at all. Nearly one-fifth of Fortune 500 companies reported profits to shareholders but owed nothing in corporate income tax, including Amazon, Chevron, FedEx, and Starbucks. Wall Street was a big winner too: Over the first two years of the Trump tax code, the nation’s six biggest banks pocketed an extra $32 billion they would have otherwise paid in taxes, according to a Bloomberg analysis.
The Trump bill offered an additional gift to companies with cash overseas. The global profits of U.S. corporations had long been subject to taxes at home, but a flaw in the old tax code let companies avoid paying as long as that income remained offshore. Tech companies in particular exploited this loophole with accounting gimmicks that made domestic profits appear as if they’d been earned in foreign tax shelters like Ireland and Bermuda. By the time the Trump tax act passed, companies had stockpiled nearly $1 trillion offshore. Trump’s “fix” for this problem was perverse: He broadly ended the U.S.’s ability to tax foreign profits. While the new law did impose a one-time tax on accumulated overseas cash, it taxed companies at a discount — as little as eight percent.
Please continue this article here: https://www.rollingstone.com/politics/politics-features/trump-covid-response-economy-jobs-taxes-inequality-1080345/
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