Sunday Marks Two-Year Anniversary of Failed GOP Tax Cut Law
New Report Shows 91 Fortune 500 Corporations Paid No Federal Income Taxes in 2018.
Sunday, Dec. 22, will mark the two-year anniversary of the Tax Cuts and Jobs Act, the signature legislative achievement of the Trump Administration. While President Trump and Republicans still proclaim the law a success, data from independent and authoritative sources overwhelmingly shows that the many promises that helped convince lawmakers to speed enactment of the tax overhaul have failed to come true.
A new report by Americans for Tax Fairness, Chartbook: Trump-GOP Tax Cuts Failing Workers and the Economy, details eight key promises made by Trump and the GOP to help get the tax cuts enacted into law. (The law took effect Jan. 1, 2018.) The report uses the latest economic data that shows their rosy scenarios have wilted in the glaring light of actual facts.
And a report from the Institute on Taxation and Economic Policy (ITEP) shows 91 profitable Fortune 500 corporations--including Amazon, Chevron, Halliburton and IBM--paid no federal income taxes in 2018 the year following the tax law's passage. Moreover, 379 profitable corporations paid an effective federal income tax rate of just 11.3% on their 2018 income, slightly more than half the 21% corporate tax rate--which already had been slashed down from 35% in 2017.
Taken together, the two reports paint a devastating picture of the true impacts of the costly $1.9 trillion Republican tax plan, as estimated by the Congressional Budget Office. The ATF report catalogs the many predictions about who would benefit most from the tax cuts (including a $4,000 family pay-raise guarantee), how much they would cost and how much the economy would grow, and how each of those promises have proven false. The ITEP report shows that while the tax law cut the corporate rate by 40% - from 35% to 21% - financial data from 379 profitable corporations show they paid an effective federal income tax rate of just 11.3%, the lowest in decades.
"In 2017, we were told repeatedly that the giant, unpaid-for tax cuts for the wealthy and corporations would increase jobs, pay for themselves, give every family a big raise and would really hurt rich people like Donald Trump," said Frank Clemente, executive director of Americans for Tax Fairness. "Two years later, the evidence is in, and all their promises look like a Macy's parade balloon the day after Thanksgiving."
The links below go to the Chartbook, which includes the original sources.
1. PROMISE: IT WILL BE A MIDDLE-CLASS TAX CUT.
REALITY: The tax cuts are mostly going to corporations and their wealthy owners.
- The richest 1% of taxpayers will get an average tax cut of $50,000 in 2020. That's 75 times more than the tax cut for the bottom 80%, which will average just $645. [Institute on Taxation and Economic Policy (ITEP)] These figures are comparable to estimates from the Tax Policy Center for 2018, which found the average tax cut for the richest 1% to be $51,000 and the average tax cut for the bottom 80% to be about $800. [Table 1, "All Provisions"]
- The richest 1% will receive a total of $78 billion in tax cuts in 2020. That's about equal to the total tax cut that will go to the bottom 80%. [ITEP]
- A big reason benefits are tilted to the top is the law slashed the U.S. corporate tax rate on domestic profits from 35% to 21% and on foreign profits to about 10%. Wealthy people own most corporate stock.
2. PROMISE: WEALTHY PEOPLE - LIKE DONALD TRUMP - WON'T BENEFIT FROM THE TAX CUTS.
REALITY: President Trump and his family will benefit personally by millions of dollars from at least five features of the law: lower top income tax rates; the deep corporate tax cuts; a weakened estate tax; a tax break mostly benefitting wealthy business owners like Trump (see below); and real-estate loopholes the law opened. [Americans for Tax Fairness]
3. PROMISE: Working families will quickly get a $4,000 to $9,000 raise.
REALITY:
- Median family income grew by just $514 in 2018 after enactment of the tax law--much slower growth than occurred in each of the last three years under President Obama. [U.S. Census Bureau]
- The increase in the yearly wage growth rate is up just 0.4% over the roughly two years since the Trump-GOP tax law was enacted. The yearly wage growth rate under Obama's last two years accelerated by 0.7%. [Bureau of Labor Statistics (BLS)]
4. PROMISE: Small businesses will receive a big tax cut.
REALITY: Almost half the benefits of this supposed "small" business tax cut are going to the tiny sliver of businesses with over $1 million in annual income. Less than a quarter is going to firms with an income of $200,000 or less. [Joint Committee on Taxation/Bloomberg News]
5. PROMISE: The economy will grow by 4%, 5%, or 6%.
REALITY: Economic growth (GDP) since the tax law was enacted has been in line with the Obama years. Annual growth hasn't hit 3% under Trump, and growth during the first three quarters of 2019 is averaging 2.4%. [Bureau of Economic Analysis (BEA)] The Federal Reserve predicts growth of 2.2% for the full year.
6. PROMISE: Tax cuts will pay for themselves.
REALITY: The total cost of the tax cuts is estimated at $1.9 trillion, according to the Congressional Budget Office, which will be added to the national debt. Conservatives claimed the law's lower tax rates would raise a lot more revenue through greater economic activity. But largely due to the tax cuts (especially for corporations), the deficit has exploded, reaching nearly $1 trillion in 2019, up more than 70% from the $585 billion during Obama's last year in office. [U.S. Office of Management and Budget]
7. PROMISE: The pace of job growth will quicken.
REALITY: Monthly job growth has averaged 202,000 in the two years since the tax cuts were enacted. Job growth in the last two years of the Obama Administration averaged 210,000 a month. [BLS]
8. PROMISE: Business investment will boom.
REALITY:
- After just one-quarter of modest growth in 2018, capital investment has declined overall since then, falling into negative territory in the second and third quarters of 2019. [BEA]
- Corporations have instead used their tax savings for stock buybacks, which primarily benefit executives and other wealthy shareholders. Corporations bought back a record $800 billion-plus of their own shares in 2018, an increase of more than 50% over the $519 billion in stock buybacks in 2017. [S&P Dow Jones Indices]
For these and other reasons, more voters continue to oppose the Trump-GOP tax cuts than support them. ATF maintains a comprehensive set of public opinion polls about the Tax Cuts and Jobs Act, which also includes data on support for progressive tax reform proposals. Other key findings include:
- Only 17% said their taxes decreased in 2018 compared to 2017, 33% said their taxes increased while 31% said their taxes stayed the same.
- Most voters want to repeal the 2017 tax cuts for corporations and the wealthy. 52% were more likely and 26% were less likely to support a candidate for Congress who supported repealing the 2017 tax cuts for corporations and the wealthy passed by Republicans and signed by President Trump.
ATF also maintains a major compilation of media reports and studies that have analyzed the effects of the Trump-GOP tax cuts since enactment.
In addition, Americans for Tax Fairness previously released a report, Fair Taxes Now: Revenue Options for A Fair Tax System, a comprehensive menu of 40 progressive tax reform options that includes recommendations for amending or repealing the Trump-GOP tax cuts for the wealthy and corporations (p. 5). The recommendations could raise $1.7-$2.7 trillion, demand the most from those with the most to give, and steer a better economic course for our country than the failed policy of cutting taxes for the wealthy and corporations.
Americans for Tax Fairness (ATF) is a diverse campaign of more than 420 national, state and local endorsing organizations united in support of a fair tax system that works for all Americans. It has come together based on the belief that the country needs comprehensive, progressive tax reform that results in greater revenue to meet our growing needs. This requires big corporations and the wealthy to pay their fair share in taxes, not to live by their own set of rules.
(202) 506-3264Biden Belatedly Embraces Supreme Court Reforms as Right-Wing Justices Wreak Havoc
The president is reportedly planning to endorse term limits for Supreme Court justices—but not adding seats to the bench.
In the wake of rulings that have significantly weakened the regulatory authority of federal agencies, backed the criminalization of homelessness, and granted U.S. presidents sweeping immunity from criminal prosecution, President Joe Biden is reportedly preparing to endorse reforms that would establish term limits and a binding code of ethics for the nation's Supreme Court justices—changes that progressive advocates and many Democratic lawmakers have backed for years.
The Washington Postreported late Tuesday that Biden is "finalizing plans" to embrace the proposals "in the coming weeks" as the November presidential election against GOP nominee Donald Trump looms. Trump appointed half of the Supreme Court's right-wing supermajority during his first four years in the White House, paving the way for the overturning of Roe v. Wade and other hugely consequential decisions.
Biden told members of the Congressional Progressive Caucus—some of the most vocal advocates of substantial court reforms—during a call this past weekend that he was "about to come out with a major initiative on limiting the court," according to a transcript obtained by the Post.
But Biden has been facing and resisting pressure to back transformative changes to the high court for years, and it's far from clear that the reforms he's planning to put forth—which would require congressional approval—will satisfy campaigners or members of his party who are calling for high court expansion and other bold changes.
The president, who is facing calls to drop his reelection campaign, has consistently opposed Supreme Court expansion, which is backed by 75% of Democratic voters. The New York Timesreported Tuesday that Biden's forthcoming proposal will likely not back high court expansion.
Sean Eldridge, founder and president of the progressive advocacy group Stand Up America, said in a statement late Tuesday that "elected officials are catching up to the growing consensus among the American people that it is time for court reform."
Term limits for Supreme Court justices are broadly popular with the U.S. public, according to new polling from Data for Progress. Nearly 75% of voters across party lines support ending lifetime terms on the high court, the group found.
The specifics of Biden's plan are unclear. Legislation introduced by House Democrats would impose 18-year term limits on Supreme Court justices.
"The Supreme Court should be the gold standard for judicial ethics, but right now, nothing could be further from the truth," Eldridge said Tuesday. "That's why a supermajority of Americans support legislation to enact Supreme Court term limits and a binding code of ethics. It is time for our leaders to listen to the American people and take action to address the growing crisis on our nation's highest court."
"We urge President Biden to support the Supreme Court Ethics, Recusal, and Transparency Act and the TERM Act, which would establish term limits for current and future justices," he added.
Even in the aftermath of rulings that have directly undercut his agenda—such as the high court's decision last year to block his student debt cancellation plan—Biden has dismissed more ambitious proposals to overhaul the Supreme Court, including adding more justices to the bench.
"If we start the process of trying to expand the court, we're going to politicize it maybe forever in a way that is not healthy, that you can't get back," Biden said last June, ignoring the reality that the high court has already been packed by Republicans.
Elie Mystal, The Nation's justice correspondent, argued Tuesday that term limits and other proposed court reforms are doomed to fail "if you don't expand the court."
"The only way to get term limits is to appoint a majority of justices who think term limits are constitutional," Mystal wrote. "And right now, I don't even know if there are three justices who think they're constitutional, much less the necessary five."
"So, again, the constitutional way to bring the Supreme Court to heel," he added, "is to expand it, then pass your ethics bills and term limit bills, which will then be upheld by the newly expanded court."
'Stunning Abdication': Appeals Court Dismisses Biden Genocide Complicity Case
"We turned to the law to help stop the horror, and the court chose to do nothing," said one plaintiff in the case. "We are beyond disappointed."
Palestine defenders on Tuesday decried a U.S. federal appellate panel's dismissal of a case brought by Palestinians accusing senior Biden administration officials of failing to prevent and complicity in Israeli genocide in Gaza.
A three-judge panel of the 9th U.S. Circuit Court of Appeals in San Francisco affirmed a lower court's dismissal of the lawsuit against President Joe Biden, Secretary of State Antony Blinken, and Defense Secretary Lloyd Austin, which was led by the Center for Constitutional Rights (CCR) on behalf of several Palestinian groups and individuals.
During a Tuesday interview on Democracy Now!, CCR attorney Katherine Gallagher—who represented plaintiffs in the case—said its dismissal "essentially gives the blank check to carry out any kind of conduct that the executive wants in times of genocide, in times of war."
Gallagher's interview followed a Monday statement in which she referred to the recent U.S. Supreme Court ruling granting the president "absolute immunity" for "official acts."
"On the heels of Trump v. United States, this stunning abdication of the court's role to serve as a check on the executive even in the face of its support for genocide should set off alarm bells for all," she said.
The lawsuit—originally filed in November in the U.S. District Court for the Northern District of California in Oakland—sought to stop the Biden administration from aiding Israel's bombardment of Gaza. U.S. weapons have played a critical role in Israel's war, which Palestinian and international agencies say has killed, wounded, or left missing more than 137,500 Gazans.
While the court found that "the current treatment of the Palestinians in the Gaza Strip by the Israeli military may plausibly constitute a genocide in violation of international law," it dismissed the case on jurisdictional grounds in late January. The 9th Circuit subsequently granted an expedited appeal in the case, which was heard in June.
"This decision is mind-boggling and, frankly, scary," plaintiff Waeil Elbhassi said in a statement Monday. "It is just unfathomable, while we count our dead, witness the total obliteration of Gaza—aided by our own government."
"As the death toll keeps rising and we see nonstop images of carnage during this livestreamed genocide, the court washes its hands of our case," Elbhassi added. "We turned to the law to help stop the horror, and the court chose to do nothing. We are beyond disappointed. We have no choice but to continue to fight for our people. Our very existence is at stake."
Israel's conduct in Gaza—including alleged forced starvation that has fueled deadly famine in parts of the besieged strip—is under investigation by the International Court of Justice in a genocide case brought by South Africa.
Additionally, International Criminal Court Chief Prosecutor Karim Khan has applied for warrants to arrest Israeli Prime Minister Benjamin Netanyahu, Israeli Defense Minister Yoav Gallant, and three Hamas leaders for crimes including extermination allegedly committed on and after October 7.
Greg Casar Says There's an Easy Way to Show Which Party Is More Pro-Worker
"Let's see which politicians are for unions and which ones are all talk," said the Texas Democrat.
As former U.S. President Donald Trump's new running mate and a union leader's speech spark discussions about the Republican Party and organized labor, one Democratic congressman on Tuesday suggested a test to see who is actually pro-worker.
Rep. Greg Casar, a Texas Democrat with a history of
advocating for workers, called for holding a vote on the Richard L. Trumka Protecting the Right to Organize (PRO) Act when his colleagues in Congress return to Capitol Hill next week.
"If Republicans wanna talk like they're pro-worker, then let's have a vote on the PRO Act next week," Casar said on social media. "Let's see which politicians are for unions and which ones are all talk. Dems are ready to vote, how about you guys?"
Introduced by Rep. Bobby Scott (D-Va.) and Sen. Bernie Sanders (I-Vt.), the PRO Act "expands various labor protections related to employees' rights to organize and collectively bargain in the workplace." The vast majority of its co-sponsors are Democrats.
"Dems are ready to vote, how about you guys?"
Casar specifically called out House Speaker Mike Johnson (R-La.) and Sen. Josh Hawley (R-Mo.), who on Tuesday wrote for Compact Magazine about International Brotherhood of Teamsters general president Sean O'Brien's Monday night speech at the Republican National Convention (RNC), acknowledging that it "came as something of a shock."
Hawley called the speech "a watershed moment" and said that "Republicans have a chance to turn the corner on labor." He also took the opportunity to highlight some of his own positions, such as more sick days for rail workers. The senator left out that he has backed "right-to-work" laws that ban union security clauses in collective bargaining agreements and opposed the PRO Act.
O'Brien—who responded by saying that Hawley "is 100% on point"—had, as The Washington Post's Lauren Kaori Gurley put it, "showered praise" on the senator during his speech. The Teamsters leader also stressed the need for pro-worker reforms.
"Labor law must be reformed," O'Brien said. "Americans vote for a union but can never get a union contract. Companies fire workers who try to join unions and hide behind toothless laws that are meant to protect working people but are manipulated to benefit corporations. This is economic terrorism at its best. An individual cannot withstand such an assault. A fired worker cannot afford corporate delays and these greedy employers know it. There are no consequences for the company, only the worker."
He declared that "we need corporate welfare reform. Under our current system, massive companies like Amazon, Uber, Lyft, and Walmart take zero responsibilities for the workers they employ. These companies offer no real health insurance, no retirement benefits, no paid leave, relying on underfunded public assistance. And who foots the bill? The individual taxpayer. The biggest recipients of welfare in this country are corporations, and this is real corruption. We must put workers first."
O'Brien was invited to speak at the RNC by Trump, who on Monday secured enough delegates to become the Republican nominee and announced U.S. Sen. JD Vance (R-Ohio) as his running mate—creating a ticket that Liz Shuler, president of the AFL-CIO, called "a corporate CEO's dream and a worker's nightmare."
Teamsters spokesperson Kara Deniz told the Post that the union leader requested to speak at the Democratic National Convention next month but has not yet received an invitation.
Unlike the Teamsters, several major labor groups endorsed Biden for reelection over a year ago. The Democrat describes himself as "the most pro-union President leading the most pro-union administration in American history"—and he has mostly avoided angering organized labor, other than working with Congress to block a national rail strike in December 2022.
Biden became the first sitting president in history to walk a picket line when he rallied with United Auto Workers members in September. The UAW endorsed him in January, when the group's president, Shawn Fain, sharply criticized Trump and warned that "rarely as a union do you get so clear of a choice between two candidates."
O'Brien struck a much different tone on Monday, praising the ex-president and "characterizing both parties as ambivalent about unions with room to improve," as Post reporter Jeff Stein pointed out on social media. In addition to Sanders, Stein highlighted, "there are 48 Senate sponsors of the PRO Act. They all caucus with the Democratic Party. Zero are Republicans."
Only Sens. Mark Kelly (D-Ariz.), Mark Warner (D-Va.), and Kyrsten Sinema (I-Ariz.)—who ditched the Democratic Party shortly after the 2022 election—have joined with the chamber's Republicans to oppose the PRO Act. In the GOP-controlled House, the bill is backed by every Democrat but just three Republicans: Reps. Lori Chavez-DeRemer (Ore.), Brian Fitzpatrick (Pa.), and Christopher Smith (N.J.).
"On June 21, 2023, the Senate Committee on Health, Education, Labor, and Pensions chaired by Sen. Bernie Sanders passed the PRO Act 11-10," Warren Gunnels, the panel's majority staff director, noted Tuesday. "Every Democrat on the committee voted yes. Every Republican on the committee voted no."
Rep. Becca Balint (D-Vt.) said, "To the Republicans at the RNC who want to appear to support American labor, here's an idea: Come join us to pass the PRO Act."