As Houston drowns, Trump throws a lifeline to the 1 percent
Knowing a crisis when he sees one, Donald Trump gave a speech in Missouri today promising to lower corporate tax rates, “simplify” the tax code, and otherwise give hope to desperate 1 percenters who are drowning in cash.
He didn’t give many details, but a recent analysis by the Tax Policy Center found that the plan outlined in Trump’s skimpy April tax proposal/high school freshman essay on supply-side economics would benefit the top 0.1 percent 23,500 times more than those earning less than $25,000 per year. Those in the former category would get an average tax cut of $937,000, while the schmucks making less than $25,000 would get around 40 bucks (which in Trump’s world is actually three times more than they need to buy health insurance). Oh, and it would also reduce federal revenues by as much as $7.8 billion over the next 10 years.
Trump began his speech by offering prayers to the victims of Hurricane Harvey before getting right to his plan for fucking them over.
It’s an uncomfortable segue in any case, but when your big tax speech involves crippling the government’s ability to respond to devastating hurricanes, and the guy trying to stick the landing has the empathy of an eye-burrowing parasite, it’s that much more awkward.
But what about the substance of Trump’s speech? Let's take a look:
1) Do tax breaks for the wealthy rescue the economy and pay for themselves? No. No, they don’t. How do we know? Eight years of George W. Bush, whom Republicans choose to remember as a gifted amateur painter who was also briefly president. Bush was the biggest tax-cut zealot in the history of our country, and even his own Treasury Department didn’t believe tax cuts pay for themselves.
2) Would a corporate tax cut boost job growth? No. In fact, just in time to respond to Trump’s new push for the same shit that has never worked, the Institute for Policy Studies issued a report testing the theory that lower tax rates incite corporations to spread the wealth and create jobs. (Trump has said he wants to lower the rate to 15 percent from 35 percent.)
The institute analyzed job creation among the 92 publicly held corporations that were able to pay a tax rate under 20 percent by exploiting loopholes.
The study’s conclusions? Corporations that pay such rates are more likely to slash jobs than they are to create them:
America’s 92 most consistently profitable tax-dodging firms registered median job growth of negative 1 percent between 2008 and 2016. The job growth rate over those same years among U.S. private sector firms as a whole: 6 percent.
More than half of the 92 tax-avoiders, 48 firms in all, eliminated jobs between 2008 and 2016, downsizing by a combined total of 483,000 positions.
Average CEO pay among the 92 firms rose 18 percent, to $13.4 million in real terms, between 2008 and 2016, compared to a 13 percent increase among S&P 500 CEOs. U.S. private sector worker pay increased by only 4 percent during this period.
CEOs at the 48 job-slashing companies within our 92-firm sample pocketed even larger paychecks. In 2016 they grabbed $14.9 million on average, 14 percent more than the $13.1 million for typical S&P 500 CEOs.
Many of the firms in our tax-dodging sample funneled their tax savings into stock buybacks, a financial maneuver that inflates the value of executive stock-based pay. On average, the top 10 job-cutters in our sample each spent $45 billion over the last nine years repurchasing their own stock, six times as much as the S&P 500 corporate average.
(Source: Institute for Policy Studies)
3) Would Donald Trump enrich himself and his friends through his tax plan? Of course he would. Why else would anyone want to be president? It’s like a 30-hour-a-week job.