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NOT ONE PENNY FACT CHECK: GOP Tax Law A Koch Brothers Corporate Coup, Not a Tax Cut for the Middle Class

FOR IMMEDIATE RELEASE: 
Tuesday, January 30, 2018

PRESS CONTACT:
press@notonepenny.org

Washington, D.C. —  The GOP Tax Bill described by President Trump tonight is from an alternate universe: it does not help the middle class. In reality, the bill was pushed by special interests seeking a return on investment from their political donations.

“Trump tried to put a bow on top of a corporatist coup for the Koch Brothers tonight,” said Not One Penny Spokesman Tim Hogan. “The American people are not buying that this tax bill will help them; just 2% believe they will get a bonus or a raise due to the bill. Far-right groups have spent tens of millions of dollars touting this law. It’s not working, and it won’t work. Everyone has found something to hate about the TrumpTax.”

BACKGROUND

Republicans spent more than $70 million on their initial efforts to sell the GOP Tax Bill and it polled at 24 percent at passage. Now they’re going to spend hundreds of millions more.

  • Millions Republicans have already set on fire include: $43 million from the 45 Committee, $10 million from Americans for Prosperity, $10 million from Freedom Partners. Now the Koch brothers are stepping up with an additional $20 million directed at taxes and $400 million in the midterms.

Republicans wrote a tax bill to appease their donors. Now they cash in.

  • Politico: “Republicans in Congress faced a near-mutiny last fall from some wealthy GOP donors frustrated with Washington’s inability to get anything done. Then they passed the tax bill. Now the checkbooks are open again, the party’s top bankrollers say — just in time for a challenging midterm election cycle.”

The Koch Brothers could be $1 billion richer each year after GOP Tax Bill

  • IBTimes: “A new analysis has found that political mega-donors Charles and David Koch and/or the business they operate could make between $1 billion and $1.4 billion more money each year, thanks to the tax breaks in legislation passed in December by Republican members of Congress. The two brothers are currently worth a combined $104.4 billion. Nonpartisan tax experts concluded that the bill, which lowers income taxes, corporate taxes and offers numerous special-interest tax breaks, offers the majority of the gains to America’s wealthiest individuals. The top 1 percent of Americans will get 83 percent of the tax benefits in 2027.”

Trump and the GOP Congress could have written a bill that put the middle class first. They chose not to.

  • NYT Editorial Board: “If President Trump and the Republicans in Congress were serious about helping workers via the taxcode, they had obvious options open to them: They could have cut taxes on the middle class and expanded the earned-income tax credit for poorer workers. Instead, they chose to write giant checks to big investors on the accounts of future generations.”

Across the country, states are struggling with a so-called federal tax cut that may raise taxes at home.

  • Wall Street Journal: “The new federal legislation curtailed many tax breaks, such as individual deductions for mortgage interest and tax-preparation fees and business deductions for interest and entertainment expenses. While federal rate cuts more than offset those changes, state tax rates haven’t changed. So if states adopt the new, broader federal income tax base, it could mean higher state taxes for many.”

A CNBC survey found that out of 100 companies, only 10 companies in the S&P 100 said that they had specific plans to boost wages using money saved from corporate tax cuts.

  • CNBC: “Despite a handful of high-profile announcements, the recent cuts in corporate taxes haven’t yet had a meaningful impact on American companies’ plans to boost investment or raise workers’ pay, a CNBC survey of large companies found. … Only 10 companies in the S&P 100 contacted by CNBC said they have specific plans to use some of the money saved from the corporate tax cuts to boost worker pay or invest in facilities or charitable causes.”

Bloomberg noted that employers were reluctant to give wage increases and that employees should not expect a raise regardless of whether they received a bonus or not.

  • Bloomberg: “No, those much-publicized employee bonuses don’t mean you should expect a raise this year. The White House has long said that corporate tax cuts will trickle down to American workers and pad their paychecks. Then, as if on cue, just as Congress passed a bill to enact them, a handful of companies announced employee bonuses they said were proof of that. But those one-time bumps, whatever really precipitated them, don’t mean higher wages are around the corner.”

The New York Times emphasized that big banks were among the biggest winners from the GOP tax cut

  • New York Times: “The nation’s banks are finding a lot to love about the Trump administration’s tax cuts. The $1.5 trillion tax overhaul signed into law late last year provided deep and lasting tax cuts to all types of businesses, but financial institutions are among the biggest winners so far, reaping benefits from a lower corporate rate and more preferable tax treatment for so-called pass-through companies, which include many small banks.”

Yahoo Finance pointed out that the announcement of record profits would likely continue to benefit the shareholder class.

  • Yahoo Finance: “As the impacts of the corporate tax cut passed late last year by the Trump administration begin to be seen across the economy, it is clear that the shareholder class will be the largest beneficiary of this overhaul to the tax code. This continues a theme we’ve seen since the election — shareholders winning.”

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