Part Three – Donald Trump Tax Plan is a Mirage

We’ll get right into the comments & excerpts from the related articles, as our president continues to prove on numerous issues he’s a loose cannon, where we never know when he’s going to shoot or where he might be aiming.  The Dems aren’t the only ones who were right about the effects of Trump’s tax cuts, give The Voracs some credit too.  The valid points presented in shocker-democrats-predictions-about-the-gop-tax-cut-are-coming-true are so important & informative, I’ve posted long excerpts from the article here.  No wonder most say they haven’t even noticed any increase in pay?  The GOP keeps cowering to their large donors.  Welcome to the world of crony capitalism on steroids:

When Republicans put together their tax bill last year, it was not much of a surprise to see that its centerpiece was a gigantic corporate tax cut, lowering the statutory corporate rate from 35 percent down to 21 percent. This cut accounted for about $1 trillion of the bill’s total $1.5 trillion cost, but Republicans said it really wasn’t about helping corporations at all. No, the real target was the workers: Corporations would take the money and use it to create new jobs and raise the wages of those working for them, as trickle-down economics did its magical work. Democrats, on the other hand, said it was a scam. They charged that workers would see only a fraction of the benefits, and instead corporations would use most of their windfall for things like stock buybacks, which increase share prices and benefit the wealthy people who own the vast majority of stocks.

 

And of course, most of the news media treated this argument in the standard he said/she said manner: Republicans say this, Democrats say that, and the truth lies in some secret location we may never actually reach. Well, it has been only two months since President Trump signed the bill into law, and we’re already learning what anyone with any sense knew at the time: Everything Democrats predicted is turning out to be right. Let’s look at this report in the New York Times, which describes how stock buybacks are reaching record levels: Almost 100 American corporations have trumpeted such plans in the past month. American companies have announced more than $178 billion in planned buybacks — the largest amount unveiled in a single quarter, according to Birinyi Associates, a market research firm.

 

The buybacks are also most likely to worsen economic inequality because the benefits of stocks purchases flow disproportionately to the richest Americans. This is exactly what Democrats warned would happen. How could Democrats have been so clairvoyant? Do they own a time machine? Well, no. They applied logic, looked at data and understood history. Republicans, on the other hand, were spinning out a ludicrous fantasy with no basis whatsoever. Among the things Democrats pointed out was that even before the tax cut, corporations were making near-record profits and sitting on mountains of cash; if they wanted to invest, create jobs and raise wages, they already had the means to do it. They also observed that even before the tax cut passed, corporations were saying publicly that they intended to use the money for stock buybacks.

 

But what about those bonuses that companies announced and that Trump kept touting? It’s true that some companies did give workers one-time bonuses. But it was essentially a PR move. Take Walmart, for instance. It made a splashy announcement that it would be giving bonuses of up to $1,000 to workers, which sounded great. But then it turned out that you’d only get that much if you’d been working there for 20 years, and the average worker would get around $190. Which is better than nothing, but it isn’t exactly going to transform your life. It’s in part because lies about the future — and that’s what they are when you know that what you’re saying is utterly bogus — will not be policed with nearly the same vigor as lies about the past. If Trump claims that he had the largest inaugural crowd in history, it will immediately get shot down and subject to mockery even from neutral reporters. But if he says that all the benefits of his corporate tax cut will flow to workers, which is no less a lie, it will usually be met with “Critics question whether there is evidence to support his assertion.” When Republicans said that their tax cut wouldn’t increase the deficit because it would create so much economic growth that revenue would actually increase, it was treated as a questionable claim, not an assertion on par with “If I flap my arms, I can fly to the moon” or “With a week of training, my dog will be able to do a perfect rendition of ‘Enter Sandman’ on the electric guitar.”

Trickle down is that GOP false flag & toxic elixir that only serves to exacerbate existing problems, where the help doesn’t get to those who need it most.  Whatever strength the economy currently enjoys probably stems more from the economy finally hitting full employment among workers with employable skills, along with riding the wave of the current overall global expansion.  Rubin echos the concerns we saw from the previous article in tax-bill-troubles-for-the-gop, where she points out the enormous increase in corporate buybacks dwarf worker pay hikes or more investment in factories & equipment.  Here’s an excerpt:

It is hardly surprising, therefore, that Senate Minority Leader Charles E. Schumer (D-N.Y.) went to the floor to blast the GOP. “Republicans made a conscious decision to give corporations and the wealthiest Americans the lion’s share of the tax cuts and promised that it would trickle down to everyone else,” he said. “Unfortunately, trickle-down never works. Corporate America is doing what’s best for corporate America, and working America is getting left behind.”

If shareholders who are already among the mostly well-off (the top 1 percent enjoys 60 percent of the stock market returns) get even richer and there is not a dramatic change for voters who have been  struggling to pay the bills, Republicans will pay a heavy price. If only they had not been quite so generous to the rich and to corporations or quite so Pollyannaish about the plan’s effect on wages, they might not be facing a classic Trump problem: over-promise, underperform.

Just to emphasize the point how the Donald Trump tax plan may do more harm than good, here are excerpts from trump-gop-tax-cut-narrative:

In sum, the GOP tax cut is raising wages (except it isn’t); it’s good for stocks (except the market has been a nauseous mess all year); and it’s poised to grow the economy—so much so that the Fed is determined to choke off inflation and discourage more business investment, which will hurt economic growth. If this is beginning to sound confusing, perhaps that’s because, well, it is confusing. Nothing like this has happened before—a massive, deficit-busting tax cut on capital during a period of steady growth and nearly full employment. Economic historians can’t easily predict what’s going to happen because big rich countries practically never do what Republicans just did. Critics weren’t wrong in 2017 to say that the tax cut would exacerbate inequality, helping rich investors at the expense of workers. But the Republican tax plan is a radical and unprecedented experiment in fiscal policy, and time tends to make a mockery of certainty.

How about some actual numbers?  Inside stock-buybacks-tax-law-bonuses we see shareholders are reaping the rewards from the tax cuts over workers by a ratio of 28:1.  Yes, that’s right & I’ll repeat, the stats in the article show shareholders profiting from the tax cuts more than workers to the tune of twenty-eight to one!  Click on the link & see for yourself.  Only time can tell the true impact on the economy from the Donald Trump tax plan, but a surefire telltale sign is in examining where corporations are putting the extra cash.  It is very conceivable the tax cuts will finally spur higher wages, while also accompanied by higher deficits, higher inflation & higher interest rates.  So the net effect will likely be a wash for workers, with the real gains (as usual) going to the very top.  We also see from links like tax-laws-debt-impact-we-are-robbing-from-the-future-of & also tax-cuts-trump-gop-analysis, the tax cuts appear to be more of a Trojan Horse.

Inside the link millions-of-people-are-tired-of-getting-screwed-this-is-what-a-worldwide-workers-movement-looks-like, it points out workers worldwide are being cheated, so maybe an organized movement is what is needed.  Back in the 1970’s when factories were humming & blue-collar jobs paid very well, I was as anti-union as you can get over the greed & corruption.  But nowadays with the pendulum having swung so far against labor, the circumstances have totally changed, so we need policies & grassroots movements to trend towards correcting the inequities, giving workers a stronger voice & better financial rewards for their efforts.  The article begins with this:

The problems workers face in the 21st century are global. Secure jobs are vanishing, income inequality is pervasive, and wage theft goes unchecked. The reaction? “A new global labor movement is awakening,” writes Annelise Orleck, a Dartmouth College history professor, the author of five books on US women’s history, politics, immigration, activism, and most recently of “We Are All Fast-Food Workers Now”: The Global Uprising Against Poverty Wages. Orleck interviewed more than 140 small farmers, fast-food servers, retail workers, hotel housekeepers, home health care aides, airport workers, adjunct professors, and other laborers from around the world organizing for respect and a living wage. Often, the injustices they faced—whether in Bangladesh, South Africa, the Philippines, the United States, or Mexico—were strikingly similar. Orleck believes their stories of struggle and triumph help catalyze a growing movement among low-wage workers to unionize. “The global uprisings chronicled in this book, and the broad coalitions they have generated,” she writes, “have chipped and cracked the gospel of free trade.” 

The bipartisan meeting Trump had with congressional members about what to do on guns, his comments during that meeting often aligned with the Dem’s positions.  But recall he did the same thing in an open meeting last month on immigration & DACA ideas, but after he heard the vitriol coming from the far-right, Trump quickly backtracked on his proposals & promises.  We’ve seen it many times before with this pathological liar, what he says today he’ll deny tomorrow.  Of the many articles below on our gun laws, including Americans favoring stricter gun laws & determined students taking on the NRA, see this article on that bizarre meeting Trump had in front of the cameras for public consumption.  In the coming days as the GOP & their NRA backers keep trying to block new actions, will Trump totally backtrack on his original comments yet again?: donald-trumps-gun-control-meeting-was-a-nightmare-for-republicans.

In more news seen in the links, the stock market took a bath today as Trump announced an intention to raise tariffs on imported steel & aluminum.  Now while I’ve always believed a country has the right & even an obligation to protect their domestic industries, as we always must guard against the cheaters, but such a tariff in a Trumpian way seems to have been crafted in a haphazard way without much thought behind it.  On the trade front we should seek ways to strike fair trade deals creating a level playing field that benefits all, not one-sided mandates that could spark a trade war: steel-aluminium-tariffs-donald-trump-protectionism-trade-war.

So peruse the links below & click on the ones which interest you most.  The last group on broken government has some good articles, which we may need to be creative by developing a whole new party system, replacing the tribal gridlock the two major parties now have us stuck in.