Workers have benefited almost nothing from the Trump administration’s corporate tax cut, an investigation has found.
This is despite lawmakers promising the billions saved by big companies would trickle down to staff in the form of wage increases.
The 2017 Tax and Jobs Act – President Donald Trump’s one major piece of enacted legislation – slashed the corporate tax rate from 35 to 21 per cent, the biggest such cut in US history.
Yet, only six per cent of the $150 billion saved by corporations in 2018 was spent on workers, according to not-for-profit Just Capital.
‘More than half of which takes the form of one-time bonuses, as opposed to permanent raises or benefits,’ their report explained.
In the first three months after the bill was passed by Trump on 22 December 2017, the average yearly salary increased by just $233 a year, $6.21 a week.
The bulk of the cut went into shareholder dividends and stock buy-backs, helping only the ten per cent of Americans who own 84 per cent of the stocks.
Yet the new legislation was sold to citizens as a move which would boost the economy, with the president saying that it would bring the average American household ‘around a $4,000 pay raise’.
A six-month investigation into the 2017 Tax and Jobs Act, by Center for Public Integrity, a not-for-profit news agency based in Washington DC, involved interviews with several key players and independent tax experts.
It found that prior to the finalizing of the law, deficit hawks who were against adding any more to the existing $20tn in US debt insisted on any tax cut having ‘revenue neutrality’, but eventually folded.
The investigation also discovered the bill was drafted in secret so lobbyists would have less chance to try and change it.
The ‘rushed and secretive process’ was blasted in a 68-page study by thirteen tax law professors from across the country, who said it resulted in a ‘deeply flawed legislation’.
Even those hired by the Trump administration to craft the bill were disappointed by it.
Dana Trier, a New York lawyer, told the Center that parts were not well thought through and ‘known problems’ were left due to how quickly it passed.
‘So, I mean I want to be honest with you, I was completely sick,’ he said. ‘You know from my perspective I took one for the team and my reason for taking one for the team had not been fulfilled.
‘I thought I could make it work. I could be one of those people who could help make it work. And in fact we didn’t reach my standard.’