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NOT ONE PENNY FACT CHECK: Trump’s Rhetoric On Tax Bill Benefits for Workers Distorts Reality  

FOR IMMEDIATE RELEASE:
Tuesday, January 30, 2018

PRESS CONTACT:
press@notonepenny.org

Washington, D.C. —  President Trump just painted a rosy picture of the TrumpTax by cherry-picking headlines from the coordinated corporate public relations campaign designed to sell massively unpopular tax cuts for the wealthy, but the truth is that American workers are getting pink slips while waiting for Republicans’ empty promises to materialize.

“The TrumpTax is a boon for wealthy corporations and individuals at the expense of working families trying to make ends meet,” said Executive Director of Tax March Nicole Gill. “Trump did not tell the truth tonight. The TrumpTax will raise taxes on middle class families in order to line the pockets of millionaires and billionaires.”

BACKGROUND  

A CNBC Fed Survey found that most of the benefits from the tax cut windfall will go to boosting buybacks and dividends, instead of increasing wages for workers.

  • CNBC: “Overall, just 8 percent of the 40 respondents, who include economists, strategists and fund managers, say workers will benefit the most from the tax cuts. Fifty-four percent say it will be shareholders and executives and 39 percent say both sides will benefit equally.”

According to a Reuters/Ipsos poll, only 2% of U.S. adults said they received a raise, bonus, or other additional benefits as a result of the TrumpTax.

  • Reuters: “Two percent of U.S. adults said they had gotten a raise, bonus or other additional benefits due to the Republican tax law enacted a month ago by President Donald Trump, according to a Reuters/Ipsos poll released.”

The U.S. Treasury Department announced that government borrowing would reach the largest amount in eight years, and cited the $1.5 trillion cost of the TrumpTax over the next decade.

  • Associated Press: “Private forecasters believe this year’s deficit will climb to around $765 billion, and some are forecasting deficits for next year could once again top $1 trillion. Those projections reflect growing costs for Social Security and Medicare as the baby boom generation retires and the costs of the big tax cut that President Donald Trump pushed through Congress last month, a package estimated to boost deficits by $1.5 trillion over the next decade.”

The Wall Street Journal posted an analysis that showed the private equity industry benefiting from the TrumpTax by getting a boost of 3% to 17% on average.

  • Wall Street Journal: “The private-equity industry is set to get a shot in the arm from the tax overhaul, a new analysis shows. … The values of profitable private-equity-owned U.S. companies should climb between 3% and 17% on average as the law moves to lower the corporate tax rate to 21% from 35% and to give companies the ability to deduct capital spending upfront.”

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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