John Oliver used his “Last Week Tonight” show to eviscerate the American tax system. While extremely funny it is a sad commentary on our tax system that transfers the wealth and income of the poor and middle-class to corporations using the tax law. Trump’s tax cut scam did nothing to stop the legal theft. But it gets worse.
John Oliver exposes American tax system as a fraud that rewards corporations over middle-class
Both Robert Reich and Paul Krugman exposed the Trump tax cut scam which made a bad system worse.
On Reich’s article.
Trump continues to tout his tax cut scam as a success. He claims he provided relief for the middle-class. Robert Reich’s most recent article blows up that lie with the numbers and the real beneficiaries. And you know what. It ain’t you.
Donald Trump fooled a lot of people, and while the tax cut scam was unpopular, many seem to not object to it as forcefully as they should have. One must not forget that soon after he got his bill passed he bragged to the wealthy folks at Mar-a-Lago that he made them a lot of money.
Robert Reich’s article “Trump’s Shareholder Bonanza,” says it all.
The evidence is in: The biggest beneficiaries of the Trump-Republican tax plan are shareholders. Yesterday, Bank of America Brian Moynihan said that “most of the benefits” from the tax cuts “will flow to the bottom-line through dividends and share buybacks over time.” Exactly. Dividends and share buybacks boost share prices. And that’s all corporate America wants to do.
Moynihan noted that in 2017, Bank of America had $16.6 billion of net income available to shareholders and returned $16.8 billion through dividends and buyback. “So, yes, we will expect to return more capital to shareholders given the tax [cut].” Even the expectation of a big corporate tax cut have caused shares to soar. Because the richest 1 percent of Americans owns 40 percent of all shares of stock, and the richest fifth owns 80 percent, this is great news for the wealthy. It’s not great news for anyone else.
Krugman then tells the story that the media should have been covering ad nauseam.
The numbers we have so far show that the much-hyped bonuses are trivial – less than $6 billion, or 0.03% of GDP – while stock buybacks have been more than $170 billion. And many of those bonuses would probably have happened anyway, whereas stock buybacks are running far above historical levels. Furthermore, the surge in stock buybacks suggests that the long run effect of the tax cut on wages will be small. Remember that the chain that should lead to trickle-down begins with lower taxes -> higher investment. If companies use the cuts to buy back stocks, not add to plant and equipment, the wage-growth story doesn’t even get started. So the real news about the tax cut is that it is – I know you’ll be shocked – mainly a giveaway to corporations. Who could have predicted?
And there you have it. Most Americans do not see the benefits. We transferred $1.5 trillion to a few who did not need it or deserve it. And now we will all suffer from the real issues that afflict the country, student debt, deteriorating infrastructure, substandard healthcare, inadequate child care for working parents, and on and on.
John Oliver gets the message across much more effectively than our two economists and this blogger. I guess it will take us all in the attempt to enlight the entire country in all forms in which they absorb information.