Opinion: Trump's tax cuts benefit top 1%, hurt working class
Two years ago this month, President Donald Trump and Republicans in Congress rammed through tax cuts that cost us $2 trillion. Two years later, these tax cut dollars are still flowing into the pockets of the wealthy and big corporations.
Many working families across Michigan, including many union members, were shocked when they filed their 2018 tax returns and discovered Trump’s promises of a tax cut for all fell flat as they were left facing a massive, unexpected tax bill.
Republicans claimed the tax cuts would pay for themselves. They haven't. Instead, they have widened a massive deficit that reached $779 billion in 2018, an increase of 17%. Unsurprisingly, $2 trillion in tax cuts is projected to explode the national debt by about $2 trillion within the next decade.
Who’s going to pay for these cuts? Well, in Trump’s latest budget, he cuts trillions of dollars from Medicare, Social Security, education and more.
Trump and D.C. Republicans promised that, as a result of the tax cuts, working class families would see a $4,000 to $9,000 raise annually. That simply has not happened. Median family income grew by just $514 in the first year after the tax law took effect — a fraction of the growth that families saw under President Barack Obama in each of his last three years in office.
They hammered working folks all over Michigan, who are now losing out on credits for the state and local taxes they still have to pay, and saw a slice to the credit they could receive for paying the mortgage on their home.
They punished our brothers and sisters in the building trades, who no longer receive tax credits for the required safety equipment and tools they need to do their jobs, and now pay higher tax bills as a result.
So who is the tax law benefiting? That’s easy: giant corporations and the ultra wealthy. Giant corporations haven’t stopped outsourcing our jobs as they cash in on our futures. Under the new tax law, 60 corporations, including Amazon and Netflix, paid $0 in federal income taxes last year.
The richest 1% are seeing gains from this as well, on average they’ll get a $50,000 tax cut next year — that’s a total of $78 billion in tax cuts for the top 1% in 2020.
With wealth inequality at historic highs in this country, rich people and giant corporations don’t need more tax cuts. Rather, it’s time for them to pay their fair share.
Americans, and Michiganians, want a tax system that works for all of us, not a rigged system where wealthy people and corporations see all the benefits while working people pay for it.
This massive tax giveaway to the rich was a big loser — not only for the checkbooks of working folks — but as it turned out in the 2018 midterms, for the electoral prospects of Republicans who supported it. If Trump and the Republicans in Congress have not figured this out yet, the 2020 elections provide another opportunity for working people to speak out.
It’s time to make things right by ending tax giveaways and loopholes that reward corporations who ship jobs overseas, and make them pay their fair share in taxes. This is a critical step to un-rigging the economy, investing in strong public service, and promoting opportunity, job security and shared prosperity for everyone.
Ron Bieber is president of Michigan AFL-CIO.
Labor Voices columns are written on a rotating basis by United Auto Workers Acting President Rory Gamble, Teamsters President James Hoffa, Michigan AFL-CIO President Ron Bieber and Michigan Education Association President Paula Herbart.