In case you missed it, a May report from the progressive Roosevelt Institute skewered the so-called Tax Cuts and Jobs Act, Republicans’ tax code rewrite introduced and approved in late 2017 by Congress and President Trump.
Now, head over to WRAL for a weekend editorial from former Raleigh City Council member Brad Thompson. Thompson examines exactly who wins and who loses in one of Trump’s few legislative victories since his inauguration.
President Donald Trump’s new Tax Cuts and Jobs Act, supported by U.S. Rep. George Holding, R-N.C., promised a huge tax cut for the middle-class, job growth, and trickle-down heaven. That was all hype.
Trump said the bill “would cost him a fortune.” The truth is he personally benefited enormously, if only from the 2.6 percent decrease in the highest tax bracket.
This new law significantly changed the tax code. It did not improve the parts of the code that were rigged against people of color. In some ways, it made the problem worse. This law was intended to enrich the president, Congressman Holding and wealthy donors. It did just that.
The tax cuts on corporations are much larger than for individuals. In addition, the cuts for corporations are permanent. The cuts for individuals are temporary and expire. There is no increased job growth as a result of these corporate tax cuts. The trickle down myth is passed down from one generation of the wealthy to the next, but it has never been true.
“Hidden Rules of Race,” a new report from the Roosevelt Institute by Darrick Hamilton and Michael Linden, brings to light four important ways in which the new tax law will negatively impact people of color. The authors conclude, “in addition to disadvantaging low- and middle-income people in favor of the rich and powerful few, the Trump tax law, specifically preys upon people of color.”
- The Trump tax law overwhelmingly benefits millionaires and billionaires, not low-income or middle-class Americans as Trump and Holding promised. As the “Income Gap” (which the Pew Research Center calls a “Grand Canyon-sized void)” grows, the wealthy get more of the tax cuts.
- The Trump tax law primarily benefits already wealthy people who already had access to the educational, systemic, and human resources necessary to accumulate wealth. The “Racial Wealth Gap” is the reality that the average wealth for families is much higher than for African-Americans. Our dreadful history of discrimination in housing, lending, and employment has legally obstructed the ability of African Americans to accumulate wealth over generations.
- The Trump tax law is expected to encourage state and local governments to add fees and fines to make up lost revenue. As Peter Edelman exposes in his new book, “Not a Crime To Be Poor,” court costs, bail, fines, and incarceration for non-violent behavior all act to keep people of color in an endless loop of economic distress where great harm is done to families and communities.17
- The Trump tax law is estimated to cost $1.9 trillion in lost revenue in the next 10 years. We have already seen that this Congress is willing to cut medical, health, and social services to offset some of their tax cuts. This is not sustainable.
Supreme Court Justice Louis Brandeis once said, “We may have democracy, or we may have wealth concentrated in the hands of a few, but we cannot have both.”
If he only knew.