Oct 2, 2017
When Donald Trump and Congressional Republicans announced their tax cut “plan,” Trump called it a “giant, beautiful, massive, the biggest ever in our country, tax cut.” For him and his wealthy friends, he may be right! For the rest of us, you can bet that it will end up being a giant ... massive attack.
Calling this a “plan” is a huge overstatement: the proposal is only nine pages long and lacks real detail. But there’s more than enough to tell who it will benefit and who it will not.
According to a report from the Urban-Brookings Tax Policy Center, individuals in the top 0.1%, or those making more than five million dollars a year, would get back at least $500,000 a year. The top 1%, with incomes more than $730,000, would get $130,000. But people making up to $25,000 a year will only see a $60 break in their income tax every year. And some of us will pay more in tax.
While we will see little or no benefit from this proposal, wealthy individuals would clean up.
For corporations, the boon is even bigger. The corporate tax rate would be lowered from 35 percent to 20 percent, a huge cut in taxes. Trump and other supporters of the plan claim that the current tax rate causes companies to take their money offshore and claim their profits in other countries. But as everyone knows, no corporation actually pays the 35 percent rate – a whole pile of deductions and other schemes allow companies to pay little to no taxes much of the time.
Trump claims that many of these deductions will be eliminated – but this is one detail that is conveniently missing from the plan: no specific deductions are mentioned for elimination. So when we see that the rich and the corporations will pay lower tax rates, we can assume that in fact the actual taxes they pay will be much, much lower.
In fact, a massive tax cut for corporations is the stated goal. Trump, the Republicans, and the corporate heads all claim that this will allow companies to use that saved money to invest more in their companies, bringing more production, more jobs and higher wages to working people in the U.S.
What a crock!
Corporations are already making record profits today. And what are they doing with that money? Instead of investing their profits in production, they have been pouring more and more of it into speculation – because that’s where they can make even more money more easily. If they get even BIGGER profits from Trump’s tax breaks, they’ll just pour even more into speculation, benefitting nobody but themselves.
But the cuts in their taxes WILL create massive deficits in the U.S. budget – up to six TRILLION dollars over ten years by some estimates. And who will end up paying for those deficits? The politicians have systematically been using deficits from earlier tax cuts to justify “massive” cuts in education budgets, Medicare, Medicaid, and every other social service they can find. They will do even more of this. They will continue to borrow “massive” amounts of money from Social Security – and then they will turn around and say they must gut it in order to “save” it! Everything the Republicans AND Democrats have been doing to us for the past 40 years, they will do even more; but now ramped up worse than ever.
For more than 40 years, the working class has seen these attacks increase and intensify – because the fight it would take to stop them is a fight of the whole working class. We haven’t seen such a fight developing until now. But it could develop. And sooner than we think.
That’s why it’s important to look reality in the face: to prepare for tomorrow’s fights. The lies told by Trump, other politicians and the wealthy classes they serve are nothing but daggers aimed at our hearts.