News Journal: The verdict is in The GOPs tax cut did not work

What’s the most politically popular thing a government can do?
A big tax cut for the vast majority of voters would certainly be at the top of most lists. And that’s what President Trump and Republican Congressional leaders all loudly proclaimed they were delivering last December. It was a sure winner, the single most important issue they would campaign on in the upcoming midterm elections.
So when’s the last time you heard a Republican candidate brag about how well the new tax laws were working out for his or her constituents? I don’t see many hands raised.
I could have predicted that outcome long before the bill was passed last year. After working for a long time in the US Senate, one thing I know for sure is that major legislation on things like taxes or health care stands little or no chance of success without bipartisan input and public transparency.
You can’t expect a good bill when legislation is written by one party behind closed doors, and then submitted to a legislative body for immediate approval, without giving legislators and their staffs time to study it and suggest changes. The more complex the legislation, the more need for transparency and collaboration.
Even when the process is followed, you know when a complex bill is passed that fixes will inevitably be needed in future years. I was a senator when Obamacare became law. Democrats controlled the presidency and both houses of Congress. But we still had open hearings.
It was an excruciatingly tedious process, but the bill was written in public and in its final form included almost 200 Republican amendments. Yet we continually reminded ourselves that, like the original legislation for Social Security and Medicare, major changes would be needed over time.
No such calculations were made by Speaker of the House Paul Ryan and Senate Majority Leader Mitch McConnell when the Trump tax cut bill, written behind closed doors, was delivered to senators along with 479 pages of notes, including some written in barely legible cursive. No Democratic senators had time to understand completely what was in the bill, but the same was true for a majority of Republican senators.
Along with a lot of other experienced legislators, I knew what had passed was a recipe for disaster. Six months later, it is clear we were right.
Despite the original Congressional Budget Office projection that the tax cut bill would increase the federal budget deficit by $1.5 trillion over the next 10 years, President Trump and his team insisted that the cuts would generate so much growth they would pay for themselves. As laughable as that was six months ago, it is even more so today.
The CBO has already increased its budget deficit projection to $1.9 trillion, and it has been my experience that when deficit projections start going up they get even worse over time.
One has to wonder how, after decades of campaigning as deficit hawks, Republican members of Congress will be able to talk about “fiscal responsibility” with straight faces.
One way the tax bill was supposed to generate huge new sources of income for the federal government was from the incentives given to major corporations to repatriate earnings held abroad, bring them back to the United States, and pay much lower taxes on those earnings than before.
A recent Bloomberg Tax analysis found that income from that source has been much less than forecast.
“The top 55 companies on the 2017 Fortune 500 list, including corporate giants like Apple Inc., Alphabet Inc., and Pfizer Inc., expect to pay about $131 billion in taxes on their earnings stockpiled overseas,” Bloomberg reported. “The amounts those companies — excluding the ones that are private or government-sponsored — are disclosing in their annual and quarterly earnings reports show that the revenue from the law’s repatriation tax will likely fall far short of lawmakers’ and the Trump administration’s expectations.”
Andrew Silverman, a Bloomberg Intelligence tax analyst, remembered Trump saying, “We’re going to get $5 trillion in cash held abroad.”
“I suspect it’s going to be a heck of a lot less than that,” Silverman said, “based on the taxes companies expect to owe.”
Shockingly low revenue from expatriated funds is just the tip of the disastrous iceberg the tax bill has become. The Americans for Tax Fairness released its Six-Month Report Card and found much more:
“Although President Trump promised the average worker would see a $4,000 pay raise due to the tax cuts, only 4 percent of workers so far are getting a bonus or wage hike,” the report said. “Only 402 of the nation’s six million employers have announced any plans to share their tax cuts with employees through bonuses or wage hikes. The total is estimated at $7 billion so far.”
The report card continued: “But that pales in comparison to the $77 billion in tax cuts that just 156 corporations are getting this year. Corporations are giving huge windfalls to their CEOs and wealthy shareholders in the form of stock buybacks, as they own most stock. Corporations have announced $484 billion in stock buybacks since the tax law was passed. That’s 69 times more than the $7 billion corporations have promised workers through one-time bonuses and wage hikes.”
The report concludes that “Despite the promise that the tax cuts would increase wages, the government reported last week that in the last year average hourly wages for four out of five workers in the private sector have gone down after inflation.”
Finally, the American people are clearly losing faith in the tax cut bill. A recent Monmouth University poll found that only 34 percent of Americans approved of the tax cut bill, while 41 percent disapproved.
The Trump tax cut bill has turned out to be a poster child for what happens when you abandon proven process for short-term partisan gain.
Ted Kaufman is a former U S Senator from Delaware

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