President Trump’s tax legislation is about as unpopular as he is. According to the RealClearPolitics average, about 36 percent approve of the tax plan while 43 percent disapprove. It’s easy to see why: The enormous boost in wages ($4,000, guaranteed!) that the White House disingenuously promised never materialized; in fact, wages are stagnant as fuel and health-care costs rise. If you are unlucky enough to make your living in agriculture, Trump’s tariffs have sapped farm income and many crop prices.
Americans can see for themselves that the largest beneficiaries of the plan are wealthier Americans, and specifically corporate executives and shareholders who have received the bulk of the corporate tax relief in the form of stock buybacks. Politico reports:
Some of the biggest winners from President Donald Trump’s new tax law are corporate executives who have reaped gains as their companies buy back a record amount of stock, a practice that rewards shareholders by boosting the value of existing shares.
A POLITICO review of data disclosed in Securities and Exchange Commission filings shows the executives, who often receive most of their compensation in stock, have been profiting handsomely by selling shares since Trump signed the law on Dec. 22 and slashed corporate tax rates to 21 percent. That trend is likely to increase, as Wall Street analysts expect buyback activity to accelerate in the coming weeks. . . . “What did companies do with their cash?” said the Morgan Stanley analysis. “In short, a large increase in stock buybacks was the biggest change” in the first quarter of this year from the last quarter of 2017.
Specifically, about $600 billion in stock buyback plans have been announced. With Republicans lagging in the polls, Trump has a brilliant new idea: more tax cuts for the rich! No, it’s not just a Democratic prediction of what will come if the GOP remains in power; it’s an actual plan from the White House. The Post reports:
The Treasury Department is considering a tax cut for the wealthiest Americans through a change that would not need approval from Congress, officials said, a move that would follow a package of tax cuts last year that also benefited the super-rich.
The agency is studying whether to allow investment income, known as capital gains, to be adjusted for inflation in a way that shields more of it from taxation. Most capital gains are paid by wealthier Americans, who disproportionately hold large portfolios of investments.
But the use of executive power on such a significant change to the tax law would be highly unusual and could be vulnerable to a legal challenge.
In other words, it is so unpopular that the administration doesn’t even want to give Republicans a chance to vote on it. The single most important function of Congress is to raise revenue, but who needs Congress when the authoritarian-minded chief executive is around to reward (again) his rich friends?
The idea is as politically and economically preposterous as it is constitutionally unsound. The debt is ballooning, and as yet, we’ve seen no evidence that the original tax cuts will pay for themselves. Moreover, Trump is no longer even trying to maintain the aura of economic populism; now it’s a grab-what-you-can environment in which the rich stuff their pockets before Democrats gain power.
Democrats had a field day with reports of more tax cuts for the rich. “At a time when the deficit is out of control, wages are flat, and the wealthiest are doing better than ever, to give the top one percent another advantage is an outrage and shows the Republicans’ true colors,” Senate Minority Leader Charles Schumer (D-N.Y.) said in a written statement. “Furthermore, [Treasury Secretary Steven] Mnuchin thinks he can do it on his own, but everyone knows this must be done by legislation. If this proposal were to be considered in the Congress, it would not pass.”
Even the mention of more tax cuts for the rich could be deadly for Republicans on the ballot, who will in all likelihood refuse to criticize the president’s plan. Democrats get to run now against the existing tax cut as well as with the promise to stop Trump from granting more giveaways to the richest Americans. With Trump’s tariffs hitting red states and more talk about tax cuts for the rich, Democrats might be able to win back many white, rural voters (not to mention suburbanites, women, young voters, college-educated voters, etc.). The notion that Trump was an economic populist was always suspect; now it’s a joke. Trump has revealed his true agenda — robber-baron economics with a big dose of xenophobia and pro-Russian sycophancy. Call it Oligarchs First.