Who Really Pays for Corporate Tax Breaks?
Even though the pundits agreed it was dead on arrival because of a recent bipartisan spending deal reached by congressional leaders, Trump’s FY19 Budget request was revealed on February 12 and landed with a definite thud. As was the case with the previous year’s budget proposal, the president laid out a plan to sharply cut popular programs like Medicare, Social Security disability, food nutrition programs and many other services that seniors and struggling families depend on.
The presidential budget outline was released the same day that Trump dropped a proposal to change the way infrastructure projects are funded. Not only does his plan take away money from proven programs, it will force states and local communities to bear most of the cost of projects when currently the majority of funding comes from the federal government. This will lead to higher costs and tolls for consumers because it will pressure communities to invest in projects that will turn a profit, not the sorts of projects that are most needed in many communities like water system upgrades or new schools and hospitals.
Both Trump’s budget and infrastructure spending plans (which are more accurately described as cuts plans) highlight the current Administration’s disconnect with real Americans. It’s clear we need federal revenues to make investments that will grow healthier communities, create jobs, and fund the social safety net that provides protections for families and individuals who fall down on their luck.
When corporate profits remain at record levels and the rich keep getting richer, why is there not more government money to go around? Well, because our nation’s leaders doled it out to greedy, tax dodging corporations and the ultra wealthy. Even worse, so-called “conservatives” in Congress agreed to put the country $1.5 trillion in debt to pay for these tax cuts for the wealthy and corporations.
These tax giveaways recently went into effect, after a hard-fought battle by Public Citizen and our progressive allies to quash the harmful legislation and push for tax changes that would actually benefit all Americans, not just the wealthy, and would require corporations and Wall Street to pay their fair share. We opposed the legislation on the grounds that it grossly rewards corporations by permanently slashing rates for companies and by giving a windfall to tax dodgers, by rendering the estate tax toothless, by creating complicated provisions that will be easily gamed and lead to mass tax avoidance, and because its international provisions will lead to worsened outsourcing of jobs and investments. And, the law cruelly will lead to 13 million more people going without health insurance and jack up premiums across the board. All the while, state governments are left to wonder what the outcomes of these drastic tax changes will do to their expected budgets.
Unfortunately, we lost. We were outspent by the more than 60 percent of DC’s lobbyists who swamped the tax fight (that’s more than 7,000 lobbyists!) The leader of the nation’s biggest lobbyist, the U.S. Chamber of Commerce’s president, Tom Donohue, spent a fair amount of time during last month’s “State of the American Business” speech patting himself on his back for these corporate giveaways that will be paid for on the backs of working Americans.
Because the public is quite aware of what the tax law is: a giveaway for those who least need it that will be paid for by cutting services for middle-and low-income Americans and hiking their taxes in coming years, the GOP has been engaging in a P.R. blitz is on steroids, with CEOs handing out bonuses that they well could have afforded to do so before (in many cases while stealthily cutting jobs at the same time.) What’s making much less news is the huge spike in stock buybacks; putting more money in the pockets of Wall Street billionaires.
Unfortunately, this snow job has been working and the hatred for the tax bill has been lessening as people enjoy the meager crumbs they were given as the rich made off with the cake. But, it’s not too late have your voice heard to help stop the onslaught of cuts to government services the GOP has threatened as it sets its target on Medicare, Medicaid, public education, nutrition assistance through the upcoming appropriations process as a way to offset some of the huge price tag of the tax bill.
Come November, it’s pretty obvious how voters will feel when the “Tax Cuts and Jobs Act” has turned out to be the “Benefit Cuts and Lost Jobs Act.” But, in the meantime, make sure your representative and senators know that you don’t support cutting services to pay for tax breaks for the rich and corporations.