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It’s tax season, which means it’s time for hard-working Americans to donate to our favorite philanthropic cause: corporate welfare.
I know, after four decades of real-wage stagnation for working-class Americans, you’ve all been hand-wringing over the plight of our country’s bloated billionaire class.
After all, according to the Economic Policy Institute, the top 1 percent of families in the United States make only 25 times what families in the bottom 99 percent earn. At that rate, how will our darling elites survive? But, fear not. Help is on the way for our esteemed mega-yachters, in the fruits of the Tax Cuts and Jobs Act.
Thanks to the $1.5 trillion Republican tax cut passed in 2017, Amazon — which has a theoretical tax responsibility of 21 percent — won’t be paying any taxes on its $11.2 billion in profits from 2018. All you who’ve been restless over the plight of poor Jeff Bezos, who’s worth a paltry $134 billion, please be at ease.
Our president has verbally attacked Amazon in the past for not paying its fair share of taxes, and promised he would close loopholes that have allowed companies like Amazon to skate by at the expense of American workers. For those who actually believed that, I have some shocking news: he lied.
As Steve Wamhoff, director of Federal Tax Policy at the Institute on Taxation and Economic Policy, put it: “This is another situation where the rhetoric from President Trump is completely divorced from what he does and what his policies do.”
Amazon’s tax windfall is only one instance of the much-broader movement of corporate welfare bleeding our nation dry. The Treasury Department reported tax receipts on corporate income fell 31 percent in 2018, to $205 billion from $297 billion in 2017.
In case that’s a surprise, let’s go back to November 2017, when a certain columnist added his meager voice to the din of “every credible economist in the country screaming that this tax bill increases the deficit, hurts the middle class and strips the poor of services.”
Before Republicans passed the tax cut, the Congressional Budget Office (CBO) estimated it will add $1.4 trillion to the deficit by 2027. The Booth School of Business at University of Chicago found 88 percent of economists in their survey predicted the tax plan would substantially increase the debt-to-GDP ratio by 2027. Perhaps the strongest criticism came in a Forbes column that dubbed the tax plan “the end of all economic sanity in Washington.”
If only we had been warned! I mean, there was no way to see this coming, especially since the president promised in 2016 to eliminate the then-$19 trillion national debt in eight years (he later reeled that promise back to simply reducing the debt).
So, how’s that coming? I assume since our president wears the mantle of fiscal conservatism like the desiccated corpse of some endangered species, it must be going swimmingly. It must be, since we’re projected to increase defense spending by nearly a third over FY17 in FY20 with $750 billion — more than twice China and Russia combined.
But, ummm, the debt cutting … that’s not quite adding up. Since Trump took office, the federal debt has grown by more than $2 trillion. Our annual deficit is tipping $900 billion, and CBO predicts it will exceed $1 trillion a year beginning in 2022.
In 2001 our debt was at a manageable 31.4 percent of U.S. gross domestic product (GDP). Our debt is now 74 percent of GDP, and predicted by CBO to grow to 93 percent by 2029. We haven’t hit that level since the end of World War II.
Eighteen years of war, with a colossal financial crisis in the middle, hasn’t helped. But, the corporate handouts masquerading as working-class tax relief are pushing our debt well beyond the realm of manageable, into disastrous levels that should cause an apoplectic fit for any true fiscal conservative.
Of course, Trumpians can’t abandon the disastrous tax “reforms” that almost exclusively benefit the corporate overlords of their imperiled plutocracy. Rather than have corporations and the mega-rich pay their way, Mitch McConnell recommended last October — again, this was predicted — that Medicare, Medicaid and Social Security be cut to close the exploding deficit.
Public outcry at that suggestion was swift and loud, and it’s been shelved — likely until after the 2020 campaign. But the notion of stripping benefits to fund handouts to the rich hasn’t gone away.
Last month, CBO unveiled its “Options for Reducing the Deficit: 2019 to 2028,” which called for cutting $12 billion by reducing veterans’ benefits and hiking costs for military dependents’ and veterans’ health care.
Again, that proposal likely won’t see any action until after 2020. It’s hard to wrap yourself in the flag on the campaign trail while standing on the necks of sick veterans. But, it’s still out there.
Our deficit spending is well beyond untenable. Revenue will have to be had from somewhere. The question we must decide is: From where?
As long as Trump remains in power, it seems far more likely the answer will be at the expense of veterans, the elderly and poor, all to protect handouts to those who have their hands on the president’s marionette strings.