What Mob Movies Teach Us About GOP Tax Policy
The Trump administration’s disastrous tax law paved the way for corporate America’s “mink coats and Cadillacs” moment.
In one of the more memorable scenes from the Scorcese mob classic Goodfellas, Jimmy scolds his co-conspirators for flaunting the spoils of their infamous Lufthansa Heist—the 1978 theft of $6 million in cash and jewels from New York’s JFK Airport.
“Didn’t I tell you not to get anything?” Jimmy snaps at Johnny, who had arrived at the Christmas party in a new pink Cadillac. Moments later, Frank walks in alongside a date donning a new mink coat, and Jimmy is incensed. “In two days, one guy gets a Caddy and one guy gets a $20,000 mink!”
The mob logic portrayed here—that when you hit a major lick, it’s best to lay low and not attract attention—seems innocent by the standards of the Trump administration’s signature heist: the 2017 Tax Cuts and Jobs Act (TCJA). That law paved the way for corporate America’s “mink coats and Cadillacs” moment by slashing the corporate tax rate from 35% to 21%—robbing the public of roughly $1.3 trillion and further enriching billionaires and top executives. In Goodfellas terms, that’s equal to 46,428 inflation-adjusted Lufthansa heists. And like Johnny and Frank, the corporations who scored the biggest windfalls have since done the opposite of lay low. They have instead gone on a years-long profiteering binge, rolling out some of the most egregious tactics to cash in even further.
In typical trickle-down fashion, the corporate rate cut was sold as a boon to workers and ordinary families. The Trump administration said the TCJA’s most expensive provision would boost wages to the tune of $4,000 per year. That promise, it turns out, was a fraud. According to a recent study, 90% of American workers received zero dollars from the TCJA’s corporate rate cut. Meanwhile, executive pay soared, and stock buybacks hit a record high $1 trillion in the year after it passed.
So what did the typical American family get if not a major boost in income? Junk fees, deceptive scams at the grocery store, price gouging, and major collusion scandals in everything from meatpacking to rentals to oil and gas. It can be said that the TCJA unleashed a greatest hits of predatory tactics by rewarding otherwise too-risky pricing schemes that push consumer loyalty to the brink. Lower taxes and record profits also mean more money to buy lobbying power in Washington to push for more tax cuts. In that way, our dangerously low-tax environment exposes all of us to the worst and riskiest corporate behavior.
Higher corporate taxation means fewer opportunities to hoard profits and rip off consumers, and more opportunities to invest in healthcare, child care, education, and jobs—the things proven to improve quality of life and democratize economic opportunity.
According to a February study from the Institute on Taxation and Economic Policy (ITEP), 342 profitable corporations paid an effective tax rate of 14.1% from 2018 to 2022, well below the 21% signed into law by the Trump administration. Layered onto decades of corporate tax cuts, the TCJA pushed the U.S. to the very bottom of the OECD in terms of revenue raised from corporations as a share of the economy. And Republicans are poised to go even further if former U.S. President Donald Trump retakes the White House.
A recent analysis from CAP Action found that Trump’s plan to cut the corporate tax rate even further to 15% would provide the top 100 U.S. companies with an additional $48 billion gift every year. This means even more breathing room to test out the next wave of ripoff schemes needed to satisfy investors. Whether it’s major credit card companies jacking up APRs even further, Amazon running more casino-style pricing experiments, or Tyson Foods deploying more algorithms to allegedly collude on meat prices, lower taxation offers a sweet incentive to profiteer at the expense of consumers.
Raising the corporate tax rate won’t fix everything that’s broken with corporate America or our economy. But it will fundamentally change the economic rules. Higher corporate taxation means fewer opportunities to hoard profits and rip off consumers, and more opportunities to invest in healthcare, child care, education, and jobs—the things proven to improve quality of life and democratize economic opportunity.
Since the Trump tax cuts, the largest corporations have flaunted their record profits like caddies and minks, bragging on earnings calls about the new tricks they’re using to raise prices on consumers. The era of tax heists must end if we are to stop them. The time to end it is now.
