By MORRIS PEARL
Once upon a time, Paul Ryan was Speaker of the House, waving around a postcard that he claimed would simplify taxes for millions of Americans. The GOP still held trifecta control over the federal government, and spent the run-up to the holiday season crafting the largest, most consequential overhaul of our tax code in decades by passing a law with no committee hearings, and in such a hurry that they had to pass it in handwriting. President Trump went on television to declare that every American would get $4,000 from the Tax Cuts and Jobs Act.
This week marks two years since the TCJA was signed into law. Unless you’re a rich person like me, however, those two years might have felt like a lifetime. That’s because the GOP passed a $1.9 trillion handout to the rich and powerful, while simultaneously claiming we just don’t have the money to pay for the programs that working Americans rely on.
After seeing the impact of the 2017 tax cuts on American workers and the economy, it’s clear that we simply can’t afford another two years of handouts to the rich and powerful and peanuts for everyone else.
President Trump and the GOP claimed that the tax cuts would spark massive investment in our economy, creating jobs, boosting wages, and spurring a new era of American growth. According to analysis from the non-partisan Congressional Research Service, absolutely none of those promises have panned out.
Instead of using their multi-billion dollar tax windfalls to re-invest in their companies and create new jobs, major American corporations spent over $800 billion buying back their own stock in 2018 alone. Instead of raising worker wages, CEO pay skyrocketed to the point where the average CEO of the 350 biggest companies earns more than 278 times than that of the average employee.
Many wealthy individuals and corporations initially claimed that the cuts would unleash a flood of philanthropic giving and new investments into the economy. Some delivered, if in paltry, one-off amounts. For the most part, however, the 1 percent overwhelmingly hoarded that wealth at the top instead of ‘trickling down’ in any meaningful way. Reports even came out that the super-rich suddenly became so flush with cash they no longer knew how to spend it.
Fiscal implications aside, the GOP tax cuts also represent a profound failure of tax fairness. The 400 richest Americans now pay a lower tax rate – just 23 percent – than the entire bottom half of the country. People like Jeff Bezos, Bill Gates, and Warren Buffett now pay a lower tax rate than their secretaries, their cleaners, and the people who prepare their food. It’s no wonder that income inequality is now at its highest level in 50 years, and rapidly worsening.
The unfortunate truth is that two years on, it’s obvious that the Trump administration’s tax cuts only benefit people like me. But the truly heinous part is that they did so at the expense of everyone else. These cuts will represent a $1.9 trillion handout to the top 1 percent and corporations, the people in this country that need that money the least.
I want to make that point abundantly clear: every single cent of that handout that is making my portfolio larger is a cent that could have been sent to one of the 99 percent of Americans who work for a living who would put that money straight back into the economy, where it’s of far better use. Every single cent could have been spent on the critical services that those 99 percent rely on. There are a million things within that category, from infrastructure to health care to fighting climate change, but it’s not my place to say exactly how that money should be spent.
As the primary beneficiary of these cuts, however, it is my imperative to state that of all the places that $1.9 trillion could have gone, the Trump administration chose the only group in this country that indisputably did not need it. While the vast majority of Americans simply can’t afford two more years of these catastrophic tax cuts, I assure you: rich folks like me will be just fine if we cough up a little bit more to the government.
Morris Pearl is a former Managing Director at Blackrock, Inc., and is the chair of the Patriotic Millionaires