From the Public
By Sonali Kolhatkar
There are many issues on the line this election year but one that gets little attention is former President Donald Trump’s 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]together 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 [Harris], 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.
Sonali Kolhatkar is the founder, host and executive producer of “Rising Up With Sonali,” a television and radio show.
Source: counterpunch.org, March 12, 2024.