President Donald Trump often declares himself a populist for America’s working class. On inauguration day, the billionaire-in-chief told a crowd of millions that “the forgotten man will never be forgotten again,” speaking to the rust belt citizens who felt betrayed on workers rights, international trade deals and tax money they felt was being pissed into the wind by their government. But is this president, who very recently hailed himself as being “more elite than the elite” their true populist champion?
In November, it was reported that President Donald Trump called a total of 12 Senate Democrats to sway their favor on the most recent Republican tax cuts. “My accountant called me and said ‘you’re going to get killed in this bill,’” the president said in a phone call from South Korea, according to NBC News sources. His claim, of course, is a lie.
On the whole, the president’s latest tax cuts are quite seductive to the wealthy elite of which Trump is a member. Take any bipartisan analysis from the Tax Foundation, the Urban-Brookings Tax Policy Center, the Joint Committee On Taxation (JCT) and a particular favourite among anti-Obamacare Republicans, the Congressional Budget Office (CBO); they’ll tell you the highest cuts go to the top 0.1 percent of American income earners, more than any other income group bearing the tax burden, all while the plan continues to blow $1.9 trillion holes into the deficit and debt.
The Center on Budget and Policy Priorities also found the top fifth of earners get 70 percent of the bill’s benefits, and the top 1 percent get 34 percent. Vox reports this could generate a total of $17 billion saved by millionaires towards the end of 2018. This isn’t even accounting for the way that money has been used through stock buybacks and under-the-table executive pay increases. The invisible hand of capitalism, as many right-wing libertarians love to talk about, has presented the working class a very different reality than their president suggested, leaving only select numbers of companies having granted temporary one-time bonuses by the year’s end and even less who increased overall yearly salaries and bonuses for workers.
“This is not what we expected,” Joe Brusuelas, chief economist at RSM, told the Washington Post. It’s a view shared across the near-majority of American families and small businesses, citing a Monmouth University poll which found only 34 percent of adults approved of the tax cuts, which is down from the 50/50 split in polls of the past. This backs up the third of American families who, according to polls from both Politico and the New York Times, say they are better off because of the cuts.
Now the president wants round two.
The president told Fox Business host Maria Bartiromo:
“We’re doing a phase two. We’ll be doing it probably in October, maybe a little sooner than that. And it will be more of a middle class — we did a lot for the middle class, but this will be more aimed at the middle class. One of the things we’re thinking about bringing the 21 percent [tax rate for corporations] down to 20,” the president continued, “and then, for the most part, the rest of it would go to the middle class. It is a great stimulus.”
Trump, notorious for such vague ramblings, essentially promised a middle-class tax cut that will also bring down the corporate rate that was already slashed last December (from the Bush-Obama rates of 35 percent to 21). Why the need to bring in the corporate rates when we’re talking about your average forgotten man and woman of middle America? The Washington Post estimates that an additional 1 percent decrease to the corporate tax rate would result in an additional $100 billion in tax cuts over the next decade, adding more fuel to the big government’s financial fire.
Journalist Damian Paletta notes the original bill only made tax cuts on families and individuals temporary until 2025. According to their sources, Republicans have floated rectifying this in another bill that would make them permanent, rather than voting to amend the legislation instead. And they wonder why we’re speculating whether their original half-measures are just a way to tease out more support come the 2018 mid-terms and 2020 election.
It’s difficult to see how Democrats will win the argument that they are the ones who will look out for the working class if their continued strategy of ignoring populist economics continues. That’s not to say that it still won’t be a tough sell for Republicans, but the promise of an additional tax break still may be more convincing to some American families than the “more of the same” policies we’ve largely seen from establishment Democrats up until now. Ultimately, some may be willing to take the second-round tax cut containing the optics and rhetoric of economic change, rather than trust that they’ll suddenly be listened to by establishment Democrats come 2018.