The tech giant's announcement about paying taxes and investing in the U.S. is a political scam at its ugliest.
Originally published by US News & World Report.
It’s hard to sell a product you know people will hate. That’s the dilemma facing President Donald Trump and congressional Republicans in slinging their latest gambit on overhauling the tax code. In essence, how do you get people excited about tax cuts for the rich when the people don’t want tax cuts for the rich? In a recent pair of speeches in Iowa, Trump offered a three-part master class.
Before we get into the specifics of the sales job, let’s briefly touch on what exactly is in the tax plan. An analysis by the nonpartisan Tax Policy Center of the tax plan House Majority Leader Paul Ryan put forward last year showed that by 2025, 99.6 percent of the tax cuts in the plan would go to the top 1 percent, those with incomes over $3.7 million.
Included in the plan is the elimination of the federal estate tax and the alternative minimum tax, and a dramatic reduction in taxes on the most profitable corporations. This is essentially the same plan Trump put forward both in detail during his campaign and in broad strokes while in office.
Now, you may be thinking, maybe this is what the people want! Well, if polling is to be believed, it’s the exact opposite of what people want. Poll after poll after poll shows that the public want to see higher taxes on the wealthy, not lower. For just one example, consider the Gallup poll that every year asks if upper-income households and corporations pay too little in taxes, and every year, without fail, since 1992, the majority says yes.
Trump's professed love for them notwithstanding, poor people, or really the yacht-less masses that make up the vast majority of the country, have no role in the economic policy formation inside the White House.
OK, so we know the public by and large hate this idea, and we know that the president and congressional Republicans want to sell it to them anyway. How do they do it?
First and foremost: Lie.
The president repeated in Iowa his oft-touted line that the United States is one of the world’s highest taxed nations. In reality, taxes as a proportion of the overall economy is among the lowest in the industrialized world. Out of the 35 developed countries, the United States ranks 31st. Looking just at corporate taxes, we rank 17th, a far cry from the top.
Why is this a lie and not just a false statement? Because it’s not the first time Trump has said it; he says it constantly. And the fact-checkers constantly raise their hands to alert him to the flames coming from his pants. Yet he continues. Claiming we have the highest taxes in the world leads people to believe that we should obviously cut taxes. Finding out this claim is a lie erodes the basis for this argument.
Trump on Wednesday stood in front of a tractor in Cedar Rapids, Iowa, to drive home the point that he was pro-farmer. He made the oft-repeated case that repealing the estate tax will primarily help small hardworking family farms. Nuh-uh.
While it’s possible that a farmer could pay the estate tax, the overwhelming majority of farmers will not. Opponents of the estate tax have never, in the 100-year history of the tax, been able to point to a family farm that was lost as a result of the estate tax. In fact, no one with assets totaling less than eight figures will ever have to even consider paying the tax.
Who does pay the estate tax? Multi-millionaires and billionaires, like Trump. The estate tax is the most fair section of the tax code, embodying the basic idea that those who make more money than they could ever spend in a dozen lifetimes should give back to the country that helped enable their success. Espousing that the tax is instead a levy on mom-and-pop farmers is a distraction from the true beneficiaries of estate tax repeal: the ultra-rich.
Again, don’t forget to mislead if you want to sell something you know people will hate.
99.6 percent of the tax cuts in the plan would go to the top 1 percent, those with incomes over $3.7 million.
Apropos of pretty much nothing, Trump let the crowd in Iowa know that, while he loves poor people, he doesn’t think they should be in control of the economy. And by poor here, he really meant nonbillionaires. The statement was in reference to Commerce Secretary Wilbur Ross, a billionaire many times over. Trump, a billionaire himself, appointed the wealthiest cabinet in American history, with fellow billionaire Betsy DeVos running the Education Department and centi-millionaire Steve Mnuchin running the Treasury Department.
Trump’s professed love for them notwithstanding, poor people, or really the yacht-less masses that make up the vast majority of the country, have no role in the economic policy formation inside the White House. That much should be obvious when you consider who benefits from this tax plan, but it’s refreshing to hear the president say it.
Tax policy is, by its very nature, pretty boring. So, it’s admittedly pretty exciting when a politician holds a big rally promising that a few minor legislative changes to the tax code will leave you with more money in your pocket. It’s especially cool when there appears to be no downside, just more money for everyone. Yay!
Unfortunately, the enduring wet blanket that is reality is much less exciting. The Trump tax plan, if passed, would mean massive tax cuts almost exclusively for the president’s private jet-riding friends and colleagues. The vast majority of Americans would be left to pay the tab in the form of major cuts to essential public programs and services. There’s a word for that kind of artful deal: fraud.