The Law’s Corporate Tax Cuts Also Went to CEOs, Not Workers
Savannah, GA – During a speech today, former president Donald Trump discussed American manufacturing and tax policy, promising to curb off-shoring and increase jobs. His actions during his tenure as president, however, do not support this: Trump’s 2017 tax law promised that as well but failed to deliver.
- Trump said in his speech that he would curb offshoring by offering another tax cut to American corporations if they exclusively manufacture in this country.
The tax law he enacted in 2017 with only Republican support actually encouraged offshoring. First, it set the tax rate on offshore profits of American corporations at just half the rate on their domestic earnings, 10.5% vs. 21%. It also allowed a certain amount of foreign profits to go U.S.-tax free, with the dollar amount increasing the more plants, equipment and other business assets are set up offshore.
- Trump claimed that giving corporations another tax cut – this time from 21% to 15 – would create jobs and improve workers’ lives.
Trump already gave big corporations a two-fifths tax cut in his 2017 law, which reduced the corporate tax rate from 35% to 21%. He claimed then that this huge giveaway to wealthy corporations would result in higher wages for workers. But what happened instead was that the tax cuts went to CEOs and other top corporate executives and to wealthy shareholders, including a lot of foreign stock owners. And the $1.3 trillion in tax revenue lost over 10 years from the corporate tax cut endangers funding for Social Security, Medicare and other public services working families rely on.
- The 2017 tax law was an expensive failure, increasing the national debt by $2 trillion. The Congressional Budget Office estimates that extending the provisions of Trump tax cuts set to expire at the end of 2025 would cost nearly $5 trillion over the next decade.