President Donald Trump’s tax cuts not only stole money from most Americans to give to the wealthy, about $40 billion of it goes to rich foreign investors, as Nobel Prize-winning economist Paul Krugman explained in an explosive op-ed this week.
The tax cuts Trump signed in December 2017 despite overwhelming disapproval by the American people have done nothing but cause the deficit to skyrocket. While wealthy individuals and corporations reaped the rewards, most Americans received nothing while their own taxes increased.
But it also turns out that Trump’s tax cut law included a secret program that handed tens of billions of dollars of taxpayer money to investors overseas, and you have to wonder if this is Trump’s way of trying to pay his bills on the taxpayer dime or pay them off in exchange for investments in his own business.
In an op-ed for the New York Times, Krugman revealed the size of this scheme.
“Donald Trump often complains that the media don’t give him credit for his achievements,” he began. “And I can think of at least one case where that’s true. As far I can tell, almost nobody is reporting that he has presided over a huge — but hidden — increase in foreign aid, the money America gives to foreigners. In fact, the hidden Trump program, currently running at around $40 billion a year, is probably the biggest giveaway to other nations since the Marshall Plan. Unfortunately, the aid isn’t going either to poor countries or to America’s allies. Instead, it’s going to wealthy foreign investors.”
In other words, we’re talking investors from countries such as China, Saudi Arabia, and Russia, where Trump is trying to do business.
“Trump’s only major legislative achievement so far is the 2017 Tax Cut and Jobs Act,” Krugman continued. “The core of that bill was a sharp reduction in corporate tax rates, which has led to a drastic fall in tax revenues, on the order of $140 billion over the past year. Who gains from this tax cut? Supporters of the bill claimed that the benefits would be passed on to workers in the form of higher wages, and they made a big deal over a flurry of corporate bonus announcements in early 2018.”
But those bonuses were nothing but a one-time payment, and thousands of workers have been laid off by companies that received tax cuts. Some of these workers were those who received bonuses.
“Overall, foreigners own about 35 percent of the equity in corporations subject to U.S. taxes,” Krugman wrote. “And as a result, foreign investors have received around 35 percent of the benefits of the tax cut. As I said, that’s more than $40 billion a year.”
Seriously, Trump literally took money from the American people to fill the pockets of foreign investors who did not need it, not only adding to the deficit Republicans claim to hate so much, but also breaking a promise he made to the voters.
“Trump’s giveaway to foreign investors isn’t going to make or break us, although it’s probably enough to ensure that the tax cut will be, overall, a net drain on economic growth,” Krugman concluded. “Still, even in America, $40 billion here, $40 billion there, and eventually you’re talking about real money. Furthermore, it does seem worth pointing out that even as Trump boasts about taking money away from foreigners, his actual policies are doing exactly the opposite.”
Opposition to Trump’s tax cuts already resulted in Republican defeats in 2018. As we now head into 2020, there’s now another part of this crooked tax cut that Democrats can hang around Trump’s neck.
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