So, tax cuts didn’t happen for too many

Tax Day is here. What’s in your return?

According to a new poll, only 17 percent of Americans say they’re paying less in taxes this year, despite the GOP’s promises that the huge tax cuts they passed were for the middle class. Tax returns due April 15 are the first to be filed under the Tax Cuts and Jobs Act (TCJA), which passed Congress and was signed by President Donald Trump about 16 months ago.

It was their signature achievement, a tax-cut package costing nearly $2 trillion that was supposed to rev up the economy, produce jobs and investment, and give every family a $4,000 raise.

It hasn’t worked out that way. In fact, multiple polls show that a plurality of voters opposed the tax law from the beginning — and still do. In fact, nearly two-thirds now favor its outright repeal. Those same polls show that the public strongly believes our tax system favors the wealthy and big corporations, who aren’t paying their fair share.

How did a major tax-cut plan that promised happy-days-are-here-again prosperity for most working families fall so flat with taxpayers?

Because most of us aren’t seeing benefits from the tax cuts in our paychecks or tax returns. But we’re seeing the real results in newspaper headlines.

Big, profitable corporations like Amazon and Netflix pay $0 in federal income taxes, or even get refunds. J.P. Morgan Chase, the biggest bank in the country, brags to its investors that the tax cuts fattened its bottom line by $3.7 billion — on top of the $29 billion it would’ve made even without the tax cuts. Drug companies save billions from the tax cuts, while the prices they charge for lifesaving medicines continue to rise.

Americans have also seen how the federal deficit has exploded — a 77 percent increase in just the first quarter of 2019 — with trillion-dollar annual deficits projected for years to come.

What really worries them is how Trump intends to make up some of the difference: with $2.5 trillion in cuts to programs like Medicare, Medicaid, Social Security disability benefits, and the Affordable Care Act (ACA). Axing the ACA would leave 20 million people without health coverage and endanger 130 million more who have pre-existing medical conditions.

Meanwhile, big corporations used their windfalls not to raise pay or invest in new factories, but instead spent a record amount — more than $1 trillion — buying back shares of their own stock. This artificially boosts their share price, which in turn rewards wealthy shareholders and CEOs.

Wall Street is happy, but Main Street not so much. The top 1 percent owns almost half of all stock in the U.S.

And there’s more. The corporate tax rate on domestic profits was cut from 35 percent to 21 percent, and the rate on offshore profits is just half of that. This change alone cost $1.3 trillion and incentivizes companies to keep their profits offshore — and to send jobs there, too.

After seeing all this, is it any wonder that taxpayers think something’s up?

It shouldn’t be this way. The unpopular Trump-GOP tax cuts benefiting the rich and big corporations should be repealed, along with the many loopholes and special breaks that predate the new law and similarly distort the tax code in favor of the well-to-do.

It their place, Congress should enact a fair-share tax system to raise significant new revenue that can be put to work addressing our many needs: protecting Medicare, Medicaid and Social Security, expanding health care coverage, rebuilding our roads and bridges, confronting climate change, and providing affordable housing and college aid.

It can be done. All it takes is a tax system that is the foundation of an economy that works for everyone, not just the wealthy few.

•••

Frank Clemente is the executive director of Americans for Tax Fairness.

8 Comments
  1. numilalocal April 13, 2019 11:19 am Reply

    Yup, thanks a whole lot all you republicans. My taxes have increased.


  2. RG DeSoto April 13, 2019 11:56 am Reply

    Frank…your progressive colors are showing. Get your facts straight:

    “The Internal Revenue Service (IRS) has recently released new data on individual income taxes for tax year 2016, showing the number of taxpayers, adjusted gross income, and income tax shares by income percentiles.1The data demonstrates that the U.S. individual income tax continues to be very progressive, borne primarily by the highest income earners”

    “High-Income Taxpayers Paid Majority of Federal Income Taxes

    In 2016, the bottom 50 percent of taxpayers (those with AGI below $40,078) earned 11.6 percent of total AGI. This group of taxpayers paid $43.9 billion in taxes, or roughly 3 percent of all income taxes in 2016.

    In contrast, the top 1 percent of all taxpayers (taxpayers with AGI of $480,804 and above), earned 19.7 percent of all AGI in 2016, and paid 37.3 percent of all federal income taxes.

    In 2016, the top 1 percent of taxpayers accounted for more income taxes paid than the bottom 90 percent combined. The top 1 percent of taxpayers paid roughly $538 billion, or 37.3 percent of all income taxes, while the bottom 90 percent paid about $440 billion, or 30.5 percent of all income taxes.

    RG DeSoto


    1. Pete Antonson April 14, 2019 1:06 pm Reply

      There we have the spin, folks. The totals of the rich are higher so all of this is Okey Dokey! If you didn’t get tax relief, or are paying more, then “Shut Up!” because those who deserve it more did get it!
      The whole point of the letter was missed. Like any good essay, it comes early and tells you what the letter is about. Frank says: “…the GOP’s promises that the huge tax cuts they passed were for the middle class…” Then he proceeds to prove how the GOP and it’s anointed one is nothing more than scum telling lies. Now, we get that annoying residue in our eyes when scum starts spinning. At least they don’t tell us their severe troubles, like ALMOST stopping the purchase of fresh sourdough in deference to buying bread wrapped in plastic; whew! That was a close call for the wealthy!


  3. Ginger Doll April 14, 2019 3:28 am Reply

    The top 1% owns almost half of our nation’s wealth. The imbalance has not been greater since the Great Depression. We are on a road to calamity. The rich get rich and the poor get poorer.

    A solution is to tax all income the same. Yes, tax all income the same as work is taxed. This eliminates all special legislation that protects investment income from taxation. Level the playing field for those who get up in the morning, pack a lunch and go to work.


  4. fake news April 14, 2019 7:16 am Reply

    The only people that will believe this article are those that do not follow their family finances, do not do their own taxes, or do not have jobs. The tax cuts brought broad sweeping benefits to the economy. Remember that raise you got at the start of the year? That was the tax cuts. You paid less to the Fed Gov throughout the year, this means you may get a smaller “refund” compared to 2017. A smaller refund does not equal less taxes paid. Me and many people I know got a much larger “refund,” especially small business owners. I am very much in the “blue collar” income category, so my refund was around $3k, plus I got a raise from Uncle same via the tax cuts.
    Polls are not reliable data, so maybe learn about economics first before you start spewing leftist propaganda.

    https://freebeacon.com/politics/small-business-owners-push-back-against-mischaracterization-of-trumps-tax-cuts/


    1. Jake April 16, 2019 2:13 am Reply

      Well thought out comment.


  5. james April 14, 2019 7:30 am Reply

    RG: What does alleged data from 2016 have to do with whether we pay more after the Republican’s “tax breaks for billionaires” bill took effect this year? Yes, the tax structure in place in 2016 was much more fair than the newly implemented tax rates and didn’t increase the deficit so dramatically. Those 1% earners should pay a much larger percentage of the overall tax collected because they earn more, hence, pay more. If you earn $10 and pay 10% in tax, that equals $1. If you earn $100 and pay 10% in tax, you would pay $10. That’s 10x more than the lower earner pays but still equal. That’s why the top 1% in 2016 paid “more than the bottom 90% combined”. They earned that much more. The real problem with Trumps billionaire’s tax law is that super-wealthy individuals and corporations pay little or no tax at all now, leaving the burdon of funding the government to the rest of us. How is that fair?


  6. Chamundi Sabanathan April 15, 2019 12:20 pm Reply

    The focus on corporations does not address the root cause of the growing rich-poor gap. That is powered not by human effort (including corporate effort) but by treating natural resources as private property. Rather than taxing productive human effort and the wealth created by human effort, tax all natural resources at their full annual rental value. All property taxes, for instance, would be based only on the value of the land, not on the value of the buildings and other improvements. No sales tax, payroll taxes, income tax, etc.–let people keep everything they have earned through their efforts (whether physical or mental), and let them freely exchange anything they have thereby earned or created.
    The root cause of poverty and homelessness is dispossession from the earth–having to pay someone else for the “privilege” of occupying space on this planet–which should be recognized as a basic human right!


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