December’s “Tax Cuts and Jobs Act” is expected to increase the average American’s annual pay by only $323 while increasing the national debt by more than $1 trillion, according to reports.
In January, Speaker of the House Paul Ryan touted the benefits of the December “Tax Cuts and Jobs Act” when he said, “Workers are coming home and telling their families they got a bonus, or they got a raise or they got better benefits.” Ryan then predicted the average American worker would see an increase in annual salary of $4,000 to $9,000 in 2018 as a result of the trickle-down effect of massive corporate tax cuts for their employers; The Act slashed the federal corporate tax rate from 35 percent to 21 percent.
Ryan, President Donald Trump and Kevin Hassett, chairman of the Trump administration’s Council of Economic Advisers, among others, predicted that if employers were saving money, they’d pass those savings on to their employees in the form of annual wage increases or one-time bonuses.
Four months later, however, the Bureau of Labor Statistics has reported that, “During the three months following passage of the tax bill, the average American saw a $6.21 increase in average weekly earnings.”
“Assuming a full 52 weeks of work, the $6.21 increase in weekly earnings would result in a $323 annual increase,” reports The Hill. And though it’s not nothing, $323 isn’t $4,000 to $9,000, no matter how you spin it.
Paul Ryan predicted the average worker would see an increase in annual salary of $4,000 to $9,000 due to massive corporate tax cuts. But the Bureau of Labor Statistics reports that tax reform will result in only a $323 annual increase.
Corporations Aren’t Sharing the Wealth
Additionally, a new report on all Fortune 500 companies by Americans for Tax Fairness found that only 4.3 percent of workers at those companies will receive a one-time bonus or wage increase tied to the business tax cuts. Furthermore, the report discovered that businesses received nine times more in cuts than what they passed on to their workers, using the savings much more frequently on stock buybacks than on bonuses or increased wages for workers. In fact, according to The Hill, “For the period December 2017 through February 2018, share buybacks more than doubled to $200 million.”
According to Frank Clemente, executive director of Americans for Tax Fairness, “[analysis shows] that 433 corporations out of the Fortune 500 have announced no plans to share their tax cuts with employees.”
Jared Bernstein, Senior Fellow at The Center on Budget and Policy Priorities, predicted December’s tax reform wouldn’t deliver the promised trickle-down salary bump when he said, “A tax cut to a multi-national corporation isn’t going to help lower class people.”
What’s another $1,000,000,000,000 dollars between friends?
Meanwhile, the tax cuts are expected to increase the national debt by more than $1 trillion, according to the nonpartisan Congressional Budget Office. Why is this a problem? Among other reasons, because as our national debt grows, the government will be forced to spend more on repaying borrowed money and less on governmental services, eventually leading to Americans experiencing a lower standard of living; because it will eventually lead to an increase in the cost of goods and services as corporations are more heavily taxed so the government can pay off its increasing debt; and because eventually the United States will become debt-ridden and lose its social, economic and military power, making our collective debt an issue of national security.
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