Critique of Trump’s Tax Cut and Jobs Act of 2017
The three big liars in the Trump administration:
#1: President Trump: he promised during the campaign he would get rid of the deficits, “We can balance the budget very quickly…I think over a five-year period. And I don’t know, maybe I could ever surprise you.”
This is baloney: these are the deficits…
2017 $665 billion [before TCJA]
2018 $779 billion [after TCJA]
2019 $984 billion
2020 CBO projected a deficit of $1.1 trillion before the coronavirus epidemic
2020 deficit: $3.1 trillion [including the epidemic]
The Trump TCJA did not reduce deficits: it added $3.528 trillion in 4 years not counting the cost of the coronavirus epidemic.
The National Debt increased from end of FY year 2016 to the end of FY 2020: $6.904 trillion: that means Trump's budget deficits do not include all government expenses. Deduct the cost of the Cares Act, $2 trillion, and still there is a discrepancy of $1.376 trillion government expenses not including in the budget deficits.
The Fiscal Year ends September 31.
The National Debt at the end of 2020: $27.552 trillion and his term in office does not end until noon--January 20, 2021.
Debt to GDP rose to 136%.
Trump’s #2 lie: he told the Washington Post he would get rid of the national debt “over a period of eight years.” According to CBO baseline projections the deficits would continue to climb over the next decade driving up federal debt under the current law. Donald Trump’s predictions are not based on data, statistical analysis or baseline projections used by the CBO. He will; simply, make up things.
Trump’s #3 lie: he repeated claims the tax cuts will not benefit him: he said, “It’s going to cost me a fortune, this thing. Believe me.”
Here is how he will benefit:
The Trump Organization consists of hundreds of pass-through entities: his tax on those profits reduced from 39.6% to 29.6%.
According to Forbes: he will save $11 million a year based on this 2005 income—on this one rule change. It was enacted for 8 years, the time Trump expects to be president, unless repealed.
He also will save in the reduction of the income tax rates, if he files an individual income tax return: the 15% to !2%, 25% to 22%, the 28% to 24%, 33% to 32%, and the biggest: 39.6% to 37%.
And the income tax brackets were increased: that also is tax cut.
Trump’s #3 lie: the corporate tax cut from 35% to 21% “would likely give the typical American household a $4,000 pay raise.”
When those figures were subject to statistical analysis: they were called: dishonest and absurd and disproved by what happened.
.
Center for American Progress
Trump’s Corporate Tax Cut Is Not Trickling Down
House Committee on the Budget
The GOP tax law showers benefits on the wealthy and large corporations while abandoning middle-class Americans and Main Street businesses
Joint Economic Committee
Jan. 28, 2020
Two Years of Evidence Show 2017 Tax Cuts Failed to Deliver Promised Economic Boost
Middleclass household income increased only $550 (i.e., 2018].
When you consider, the drop in corporate revenues, the increase in deficits, the interest costs: TCJA was a disaster.
Trump’s #4 lie: “We will eliminate the carried interest deduction”; that is, an notoriously unfair and unpopular income tax deduction for Hedge Fund and Private Equity Managers. That did not happen: he hired a former Hedge Fund manager, Steven Munchin, that help get rid of the A.M.T. for corporations and slashes to the capital gains and corporate taxes and failed to report $100 million in assets. He was Wall Street banker and foreclosure king.
His net worth about $400 million.
So, Trump lied to you to get elected!
The #2 liar: Steven Munchin, Secretary of the Treasury, said, “tax cuts would pay for themselves (i.e., by economic growth).”
GDP increased 3.1%, tax revenues decreased 0.4%, and budget deficit increased 17% in 2018 after the Trump’s TCJA of 2017 went into effect and GDP to Debt went up from 105.4% in 2017-- to 106.1% in 2018—to 106.9% in 2019 – to 136% in 2020. That includes the impact of the coronavirus epidemic. That all cannot not be blamed on Trump; however, there would have been an increase of Debt to GDP ratio in 2020 excluding the covid-19 epidemic.
The Treasury Department who he works for, issued a one-page report in December 2017 said, they would not pay for themselves.
Steven Munchin lied for President Trump.
The #3 liar: Gary Cohen, Trump’s chief economic advisor, said, “the wealthy are not getting a tax cut under our plan.” That is a humongous lie!
The top 1% receives approximately 70% of the income from pass-through entities: that tax reduced from 39.6% to 29.6%.
Households earning less than $25,000 would get an average income tax cut of $60, middle-class households would get $900, the top 1 percent of households would receive a tax cut of $51,000 and the top 0.01% $193,380. Over time, that disparity would get worst – according to Mother Jones by 2027. The reason for that the corporation tax cuts are permanent; whereas, certain tax cuts for individuals expire December 31, 2025.
The TCJA also increased the Estate Tax exemption from $5.49 million to $11.18 million: that is a tax cut for the ultra-wealthy.
The Center on Budget and Policy Priorities estimates: the bottom fifth will get 1% benefit from the corporate tax cut—the top fifth: 70%.
The reason for that: the top 10% own 84% of stocks.
Gary Cohn, a former investment banker, who worked for Goldman Sachs for about 25 years—knows better.
He also lied for Trump.
UNITED STEEL WORKERS
USW
Scoring Trump’s Tax Cuts So Far: $280,000 for Rich Lawmakers, Pennies for Workers.
Representative Vern Buchanan R-Fl, worth at least $80 million, who served on the committee that wrote and voted for the law—could get up to $2.1 million in annual tax cuts—according to Inequity. Org.
And on top of that: Trump’s tax cuts added more than $3.5 trillion to the National Debt in 4 years. This is legal stealing from Uncle Sam, when these tax cuts enrich; mostly, the top 1% and add to the nation’s deficits.
TCJA was passed by House of Representatives November 16 and the Senate December 2, 2017 -- Trump’s first year in office and dearest goal.
VOTE IN THE HOUSE OF REPRESENTATIVES:
Yes: Republicans: 227
No: Democrats 192 -- Republicans 13
VOTE IN THE SENATE:
Yes: Republicans: 51
No: Democrats: 46 -- 1 Republican -- 2 Independents
Now, who is to blame for these tax cuts that increased the National Debt from $908 billion in 1980 to over $27 trillion in 2020 and helped the rapid increase in the number of millionaires and billionaires and the increase in the gap between the rich and poor during this period besides President Ronald Reagan, President George W. Bush, President Donald Trump, and Republicans in Congress?
Answer: Voters, who elected them!