There
are many issues on the line this
election year but one that gets little
attention is former President Donald
Trump’s 2017
tax reform law that
cut taxes on the wealthiest Americans
and corporations. The Tax Cuts and
Jobs Act permanently reduced the tax
rate for big corporations from an
already-low 35 percent to a
ridiculously minuscule 21 percent. It
also lowered tax rates for the
wealthiest people from nearly 40
percent to 37 percent. Several
provisions of that law are set to
expire in 2025, making this November’s
Congressional and Presidential
elections particularly critical to
issues of economic fairness and
justice.
A
few months after Trump signed the
bill, he boasted,
“We have the biggest tax cut in
history, bigger than the Reagan tax
cut. Bigger than any tax cut.” It
became a common refrain for him when
touting his achievements. But, Trump,
who was known for breaking
all records on lying to
the public while in office, conflated
many different facts to come up with a
positive-sounding falsehood in a
nation already primed by the likes of
Ronald Reagan and Bill Clinton to view
taxation as anathema. Trump’s tax cuts
as a whole were the eighth largest in
history. But his corporate tax cut was
in fact the single largest reduction
ever in that category.
Wealthy
corporations have for years lobbied
for and won so many carve-outs and
loopholes to the U.S. tax system, and
hidden so much money in offshore tax
havens that their pre-2017 effective
tax rates were already far
lower than
the official rates. Then, Trump
lowered them even more. Imagine
telling the American public that you
are responsible specifically for the
biggest tax cuts to the biggest
corporations in U.S. history. It
wasn’t a good look. And so, he lied,
saying that he signed history’s
biggest tax cut overall.
In
the simplest terms, taxes are a way to
pool collective resources so we can
have the things we all need for safety
and security. Progressive taxation is
when wealthier individuals (and
corporations) are taxed at
higher-than-average rates because the
richer one is, the less excess money
one needs beyond one’s basic
necessities. Progressive taxation
ensures that wealth inequality doesn’t
spiral out of control and helps ensure
money that’s being sucked upwards,
gets redistributed downward. When
wealthy elites pay fewer taxes, they
are effectively stealing from the
public.
Since
the cuts have been in place, many
studies have attempted to assess their
impact on the U.S. economy. The Center
on Budget and Policy Priorities concluded in
a March 2024 report that “[t]ogether
with the 2001 and 2003 tax cuts
enacted under President Bush (most of
which were made permanent in 2012),
[Trump’s] law has severely eroded our
country’s revenue base.”
Trump’s
law accelerated the draining
of our collective revenues to
fund the things we need. Even the
fiscally conservative Peter G.
Peterson Foundation concluded that,
as a result of Trump’s law, “The
United States collects fewer revenues
from corporations, relative to the
size of the economy, than most other
advanced countries.”
Trump’s
tax cuts were quite literally regressive,
rewarding the already rich. A
2021 ProPublica
report found
that just one last-minute provision to
the bill demanded by Senator Ron
Johnson (R-WI) for so-called
pass-through corporations benefited a
handful of the wealthiest people in
the nation: “just 82 ultrawealthy
households collectively walked away
with more than $1 billion in total
savings, an analysis of confidential
tax records shows.” It only cost about
$20 million in bribes to Johnson
(i.e., donations to the Senator’s
reelection campaign) to enact this
windfall.
It’s
no wonder that the rich
were thrilled with
Trump’s presidency and that his
virulent white supremacy and fascist
leanings were not deal breakers.
It’s
also unsurprising that wealthy elites
are backing
a second term for
Trump. They want an extension of those
tax bill provisions that are expiring
in 2025, and perhaps an even bigger
tax cut, if they can get it. If those
provisions are left to expire, people
making more than $400,000 a
year—the top
2 percent of
earners—will see an increase in
taxation in 2025.
This
is a demographic that is already prone
to tax cheating given the IRS’s
recent announcement that
125,000 Americans making between
$400,000 and $1 million a year have
simply refused to file taxes since
2017.
If
the GOP wins control of the Senate and
the House of Representatives this
fall, and if Trump beats President Joe
Biden, those cuts
will become permanent.
A GOP sweep in November will also
usher in a new wave of threats to
people of color, LGBTQ people,
especially transgender communities,
labor rights, and reproductive
justice, as well as an escalation to
the already-dire Israeli genocide in
Gaza that Biden
is fueling.
It’s hard to believe but many
Americans seem to have forgotten the
horrors of 2016 to 2020.
But,
at its heart, this election will be
about money, for it will take a lot of
money to fund the GOP’s reelection
campaigns in order for moneyed forces
to ensure they retain control of more money—democracy,
justice, and equity be damned.
For
Trump, this is even more important
given his legal challenges. He’s
relying on small-dollar
donations from
his base to cover his mounting legal
fees and has had to post
a $91 million bond to
cover the fines he faces from a
defamation lawsuit by E. Jean Carroll.
The more desperate Trump gets in his
bid to secure the White House, the
more willing he and his party will be
to sell the nation to the highest
bidder. And, he will lie to the public
by conflating tax cuts for the rich
with tax cuts for all.
We
ought to think of tax cuts in terms of
public revenue theft. When the wealthy
win lowered taxes, they are stealing
money from the American public as a
whole. As per the U.S.
Senate Budget Committee,
permanently extending Trump’s tax cuts
will result in a loss of $3.5 trillion
in revenues through the year 2033.
That’s highway robbery.
This
commentary was produced by
Economy
for All,
a project of the
Independent
Media Institute.
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