The “Tax Cuts and Job Act” of Dec. 22, 2017, has changed tax brackets, tax rates and tax withholding. Recall that this package was framed as “middle class tax relief.” Most taxpayers are realizing that refunds are either smaller than in past years, nonexistent, or that there is tax liability because of less tax being withheld from paychecks, in addition to rate and bracket changes.
According to a Feb. 22 article by Shane Croucher of Newsweek titled “Donald Trump’s Tax Cuts Hand Banks $28.8 Billion: Hardworking Americans...Are Still Getting Next to Nothing,” the banking industry netted $236.7 billion in 2018, a 44.1 percent increase. Croucher claims that without the Trump tax reform, banks were projected to net $207.9 billion. He further asserts that Trump’s “stimulus package” has helped increased the national debt to $22 trillion.
This tax reform was touted by U. S. Senate Majority Leader Mitch McConnell (R-KY), then Speaker of the House Paul Ryan (R-WI), and Trump as a way to strengthen the economy. The premise was based upon 2.5 percent annual growth over the next 10 years. The cost to the deficit was projected at $1.5 trillion over those 10 years.
In the event that projections were off, the above GOP leaders built “triggers” into the tax code that would provide for the middle class to absorb those shortfalls by higher taxes in future years. Additionally, Americans will be paying interest (to China!) on this for many years to come.
The Center for Public Integrity report, “Trump’s Tax Cuts: The Rich Get Richer” (Jan. 15), cites a myriad of problems with both the development of the bill and the implementation of the law.
GOP leaders compare the Trump package to the 1986 Reagan tax reform, but fail to mention vast differences. One thing that both of these reforms has in common is the fact that “trickle-down economics” never has--nor ever will--benefit the poor and middle classes.