When President Trump delivered his first big speech on taxes this past August in Springfield, Missouri, it gave us the chills. Full of Pinocchios, of course, but also one of the best speeches of his presidency. Lifting the “crushing tax burden,” he promised, would lead to a “big, beautiful comeback” for America’s main street, with more jobs and higher wages. In a nation wracked by economic insecurity, we worried Trump’s oily sales pitch would work.
The good news is the American people never fell for it. In fact, as Republicans cranked up the old “trickle down” rhetoric over the past six weeks, opposition to the bill grew by 10 points to 55 percent, with only one in three in support. And that promise of tax cuts’ leading to higher wages? More than 70 percent of Republicans and 85 percent of Democrats didn’t buy it.
The bad news: Republicans didn’t care much about public sentiment. To please their wealthy donors, they rammed their 500-page tax bill through Congress in warp speed.
If you squint hard, you can spot a few bright spots in the final legislation, compared to the first version the House passed. Thanks to effective protests that lifted up personal stories, lawmakers dropped provisions that would’ve raised taxes on indebted students, graduate students with tuition waivers, people with extremely high medical bills, and teachers who use their own cash for classroom supplies.
But the overall picture remains dark as pitch. According to the latest analysis, the bill’s massive tax giveaways for corporations and the wealthy will be paid for by throwing 13 million people off health insurance, cutting $400 billion from Medicare, and raising taxes (by 2027) on 92 million middle-class families.
So where do we go from here? Fortunately, the hard work in this round to educate and organize the public has made progressive social movements better-positioned for the next rounds of the fight.
As Frank Clemente, executive director of Americans for Tax Fairness, puts it, “We may not have won in Washington, but at least we won in the rest of the country.”
Foremost on many activists’ minds is how to make politicians rue the day they voted for this scam. The folks who organized the big Tax March last April are about to launch repealthetrumptax.org to coordinate 100 days of “accountability” events around the country, beginning in early January. Their aim: Make a “yea” vote on this stinker a mark of shame for candidates trying to get reelected in 2018 and 2020.
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We should also be working to hold corporations that supported the tax bill accountable. Lobby groups representing nearly every large firm in the country, from the Chamber of Commerce to the Business Roundtable, fought full-throttle for this monstrosity, spewing one absurd claim after another.
Meanwhile, according to Marketwatch, corporations have been preparing to spend their tax savings not on job-creating investments or wage hikes but on stock buybacks, which will inflate the value of their CEOs’ stock-based pay.
In late November, the Communications Workers of America sent delightfully cheeky letters to CEOs of some of the largest telecom corporations, asking them to commit to giving their employees the average $4,000 wage increases the Trump administration claimed would result from cutting the corporate tax rate. Guess what—none of them complied.
Let’s continue to expose the hypocrisy of corporations that lobbied for this bill by shining a strong and steady spotlight on their employment and wage practices.
Another critical fight will be to defend social programs that will soon come under increased assault as a result of the tax bill’s more than $1 trillion price tag. As Senator Marco Rubio euphemistically put it, after the tax vote, the next order of business will be “structural changes to Social Security and Medicare for the future.” And nothing puts a gleam in House Speaker Paul Ryan’s eyes like talk of spending cuts.
Senator Bernie Sanders is already doing his part to hold President Trump to his campaign promises to protect Social Security, Medicare, and Medicaid. Sanders has demanded that the president tell Congress he will veto any bill that would cut these programs. So far, no response from the White House. Let’s amplify the Sanders challenge.
A third front will be to use the extreme over-reach of the new tax law to boost momentum behind certain fair-tax campaigns. Many state and local governments are expected to face demands to reduce income and property taxes to make up for the federal tax bill’s new cap on the deductibility of such taxes. In 20 states, the average state and local tax deduction is higher than the new $10,000 cap.
As they seek alternative sources of revenue to pay for state pensions, schools, and other critical programs, state and local lawmakers would do well to target the greedy corporations, real-estate investors, and Wall Street billionaires that will make a killing off the federal tax bill.
They should take a look, for example, at the new tax penalty the Oregon city of Portland is about to impose on corporations that pay their CEOs more than 100 times their median worker pay. This innovative inequality surtax will apply to more than 500 firms that do business in the city, including Wells Fargo and Walmart. Similar legislation has been introduced in at least five US states.
Several states are also considering bills to impose taxes on private equity and hedge-fund managers to make up for the “carried interest” loophole, which allows these wealthy individuals to pay a lower tax rate than many firefighters and teachers. President Trump had campaigned on eliminating this mistake in the tax code. But since the federal bill includes no such fix, state legislators in areas with large financial sectors now have little excuse for not adopting this progressive revenue-raiser.
To make up for the federal giveaways to real-estate investors, municipalities could impose taxes on the high-end transactions that are driving up the cost of land and housing. San Francisco voters, for example, approved a real-estate transfer tax in 2016 that is expected to raise $44 million a year on property sales over $5 million. The city plans to direct a portion of the revenue to provide free tuition and supplies for any resident to attend San Francisco City College.
The federal bill’s outrageous gutting of the estate tax could also bring new energy to efforts aimed at filling loopholes in this increasingly porous curb on wealth concentration. In the past, these efforts have been challenged by prevalent myths about how this “death tax” hurts family farmers and other little guys. With the new law raising the threshold so that it applies only to estates worth more than $11 million for individuals and $22 million for couples, there can be no question that this is a tax on the ultra-wealthy. So why not make sure they all actually pay it—and introduce graduated rates so an estate worth $1 billion is taxed more heavily than one worth $23 million?
The disconnect between the interests of Washington’s powerful elite and the public’s desire for the wealthy and global corporations to pay their fair share has never been more clear. Let’s turn the abomination of this tax bill into a catalyst for the next wave of tax-fairness and economic-justice organizing.