Although just this week, President Donald Trump was quick to praise a positive jobs report for November, other information has come out showing just how deeply his administration has shaken up the U.S. economy in favor of the wealthy. Last year, thanks to the tax reform legislation that Trump signed into law in late 2017, U.S. tax revenue as a portion of overall GDP fell by a rate about twice that of the nearest counterpart in the Organization for Economic Cooperation and Development, an intergovernmental group. Topping off the mess, that money has been swept out of tax revenue and largely into corporate stock buyback, not some kind of trickling down boost for the middle class. That means less money for the business of governance, all to boost wealthy bank accounts a little more.
‘The tax cuts dramatically altered the U.S. tax landscape for the first time in decades by permanently slashing the corporate tax rate from 35% to 21%, temporarily cutting individual tax rates and limiting state and local tax deductions, among other changes. From 2017 to 2018, the U.S. tax-to-GDP ratio fell from 26.8% to 24.3%, the OECD found, while corporate tax revenues fell by .7% and personal income tax revenues dropped by .5%.’
The latest average ratio measuring tax revenue’s portion of overall GDP across the entire OECD is significantly higher than that in the U.S. The latest OECD average sits at 34.3 percent, and the nearest year-to-year drops outside the U.S. were in Hungary and Israel, where the figures fell by 1.6 percent and 1.4 percent, respectively. Ireland, Chile, and Mexico all had overall lower ratios for 2018, but theirs hadn’t dropped like that of the U.S. heading into the year.
Trump and his allies have claimed that the dramatic 2017 tax cut, most of the benefits of which went to richer Americans, would pay for itself through increased investment in U.S. business and so on. That has not happened. Instead, there has been a record high corporate power grab via massive stock buybacks. There were $806 billion worth of those buybacks in 2018. Democratic presidential candidates have announced responses to Trump’s tax plan that include a limit on corporate stock buybacks. They’ve roundly denounced the plan and insisted they’ll turn the tide if elected.
In the meantime, Trump keeps sticking to his most familiar nonsense. On Friday, he tweeted, after also posting about the November jobs numbers that he hasn’t driven the entire economy off of a cliff quite yet:
‘Without the horror show that is the Radical Left, Do Nothing Democrats, the Stock Markets and Economy would be even better, if that is possible, and the Border would be closed to the evil of Drugs, Gangs and all other problems! #2020’
It should go mostly without saying that there’s basically no apparent evidence for this. Trump has simply presided over the unemployment rate continuing to lower after beginning to do so during the Obama administration, and he’s also presided over wild swings in the stock market — although no matter how high it goes, there are vast swaths of Americans who have no stake in it! Trump is disconnected from the concerns of everyday Americans and just keeps cushioning his rich buddies’ through means like these tax cuts.