Trump’s tax cuts are a feast for wealthy and gruel for working families

Trump’s tax cuts are a feast for wealthy and gruel for working families
© Camille Fine

Coming from New Orleans, I know good cooking. But the tax plan President Trump and his Congressional allies have cooked up is a lopsided meal: thick, juicy tax cuts for the wealthy and corporations, dry thin gruel for working families. Many will leave the table hungrier than they arrived.

Proponents claim their plan is tax reform. It’s not. Real reform would ensure everyone paid their fair share. It would also raise enough revenue to serve our country’s growing needs. The Trump plan now before the U.S. Senate cuts taxes by a net $1.5 trillion, most of which goes to millionaires and multinational corporations. Once fully implemented, the Senate plan would actually raises taxes on nearly two-thirds of middle-income families.  

Ultimately, the revenue losses from these tax cuts will threaten funding for vital public investments. Already, the Congressional budget that made way for the tax plan calls for cutting trillions of dollars from services for working families, like Medicare, Medicaid and education. What’s not paid for gets added to our national debt.

Proponents call their plan a tax cut for the middle class. Just the opposite. Over 60 percent of the Senate’s tax cuts would flow to the richest 1 percent after 10 years — nearly 40 percent to the top 0.1 percent.

The plan’s authors want us to believe that cutting taxes on the rich will create jobs. It won’t. Wealthy people can save whatever they get in tax cuts — they don’t need to spend it like working people do, who create most of the demand in the economy and thereby fuel most job creation.

You may have heard that the U.S. corporate tax rate is the world’s highest. The truth is all the loopholes in the tax code means many companies don’t pay the full rate. According to one government study, corporations on average pay less than half the official rate — less than many working families pay. There are dozens of big firms that paid zero federal income taxes for almost an entire decade.

Proponents in Congress like to say their huge tax cuts for the wealthy and corporations will pay for themselves through greater economic growth. Even conservative economists know that’s a lie.

I understand why some right-wingers hide in their fiscal fantasyland. The truth is hard. So is serving the needs of working people, if you’re only used to meeting the demands of the wealthy and well-connected.

For more than a century, the National Urban League has been serving those needs. Last year, our 88 affiliates around the country worked with 2 million people, helping tens of thousands get jobs, homes, education, health care — even their own businesses.  

So, I speak from experience when I say that cutting public services to help pay for tax cuts for the wealthiest will hurt real people.

The budget passed by Congress to facilitate President Trump’s tax cuts slashes $1.8 trillion from Medicaid, Medicare and other health services. This will deny health care to the elderly, children and people with disabilities. But Trump and his congressional backers think it would be better to spend $1.5 trillion on a corporate tax-rate cut.  

The $800-billion cut slated for education, job training and housing programs—among a vast array of other domestic services — will lead to more dropouts, unemployed and homeless. But Trump and his allies would rather use that money (roughly $597 billion worth) to reward real estate tycoons like President Trump and other wealthy business owners with a cut in the top tax rate paid by so-called “pass-through” entities. (When you hear right-wingers calling this a “small-business tax cut,” add it to the list of untruths above).

Menus make promises, but the proof of the pudding is in the eating. Trump and his friends can claim their plan is not a massive handout to the wealthy and corporations, paid for by cutting services for working families and increasing middle-class taxes and the deficit. But, unlike the plans author’s, numbers don’t lie. Add them up and it’s clear this tax plan is one meal we should all skip.

Marc H. Morial is president and chief executive officer of the National Urban League, and a former mayor of New Orleans.  The National Urban League is a historic civil rights organization focused on the economic empowerment of underserved people and communities.