How Trump has betrayed the working class
For a century the GOP has been bankrolled by big business and Wall Street. Donald Trump wants to keep the money rolling in. His signature tax cut, which was passed two years ago, has helped U.S. corporations score record profits and the stock market reach all-time highs.
To spur even more corporate generosity for the 2020 election, Trump is suggesting more giveaways. Acting White House chief of staff Mick Mulvaney recently told an assemblage of CEOs that Trump wants to "go beyond" his 2017 tax cut.
Trump also wants to expand his working-class base. In rallies and countless tweets, he claims to be restoring the American working class by holding back immigration and trade.
Most incumbent Republicans and GOP candidates are mimicking Trump's economic nationalism. As former Trump consigliere Stephen Bannon boasted recently, "We've turned the Republican party into a working-class party."
Keeping the GOP the Party of Big Money while making it over into the Party of the Working Class is a tricky maneuver, especially at a time when capital and labor are engaged in the most intense economic contest in more than a century because so much wealth and power are going to the top.
Armed with deductions and loopholes, America's largest companies paid an average federal tax rate of only 11.3 percent on their profits last year, roughly half the official rate under the new tax law -- the lowest effective corporate tax rate in more than 80 years.
Yet almost nothing has trickled down to ordinary workers. Corporations have used most of their tax savings to buy back their shares, giving the stock market a sugar high. The typical American household remains poorer today than it was before the financial crisis began in 2007.
Trump's giant tax cut has also caused the federal budget deficit to balloon. Even as pretax corporate profits have reached record highs, corporate tax revenues have dropped about a third under projected levels. This requires more federal dollars for interest on the debt, leaving fewer for public services workers need.
The Trump administration has already announced a $4.5 billion cut in food stamp benefits that would affect an estimated 10,000 families, many at the lower end of the working class. The administration is also proposing to reduce Social Security disability benefits -- a potential blow to hundreds of thousands of workers.
The tax cut has also shifted more of the total tax burden to workers. Payroll taxes made up 7.8 percent of national income last year while corporate taxes made up just 0.9 percent, the biggest gap in nearly two decades. All told, taxes on workers accounted for 35 percent of federal tax revenue in 2018; taxes on corporations, only 9 percent.