By Robert Reich
EDITOR'S NOTE: this morning, the New York Times documented 31 major false statements made by Trump, just in the past week! Read the statements, then read the facts refutting the statement. - W. Collette Donald Trump poses as a working-class populist, but about his new economic plan would be a gusher for the wealthy. And almost nothing will trickle down to anyone else.
He’d knock down the top tax rate
on businesses from 35 percent to 15 percent, thereby richly rewarding the
investor class.
He’d cut taxes the top tax rate
on the wealthy from 39.6 percent to 33 percent, another boon to the top.
He’d eliminate the estate tax –
now paid by a relative handful of families whose net worth exceeds $5.5
million.
Not incidentally, this is an
especial windfall for the Trump family. If Trump is worth as much as he says,
his heirs would get a tax break of $4 billion to $7 billion.
He’d let global corporations pay
just a 10 percent tax rate on untaxed offshore profits – another mammoth gift
to big shareholders.
Yes, he’d also lower taxes on
lower-income Americans. But the biggest beneficiaries by far are the
wealthy.
Trump says his tax cuts would
cost $4.4 trillion over 10 years. He claims most of it would be paid for by
economic growth.
We’ve been here before.
Both Ronald Reagan and George W.
Bush tried supply-side “trickle-down” economics. We should have learned two
lessons.
First, nothing trickles down.
The giant tax cuts on the wealthy enacted by Reagan in the 1980s and Bush in
the 2000s enriched those at the top – but the wages of the bottom 60 percent
went nowhere.
Second, such tax cuts produce
giant budget deficits.
Under Reagan and George H.W. Bush, the federal budget
deficit exploded. It took Bill Clinton’s administration (of which I was proud
to have been a member) to get the budget back in some semblance of balance.
Then, under George W. Bush, what
happened? The deficit exploded again.
Trump would do all this on a far
grander scale. He’s also proposing a vast expansion of the military, including
90,000 new soldiers for the Army and nearly 75 new ships for the Navy. The tab:
an estimated $90 billion a
year in additional spending.
This would mean big bucks for
military contractors. But it’s hard to see how economic benefits trickle down
to anyone else.
Perhaps Trump is banking on an
indirect fiscal stimulus – the kind of “military Keynesianism” Ronald Reagan
employed to fuel growth in the 1980s. But as we learned then, this sort of
growth doesn’t trickle down, either.
Trump also pledges a gigantic infrastructure building programto “build the next
generation of roads, bridges, railways, tunnels, sea ports, and airports.”
Hillary Clinton has proposed
spending $275 billion on
infrastructure over five years.
The Donald is thinking much
bigger. “Her number is a fraction of what we’re talking about,” says Trump. “We need much more money to rebuild our
infrastructure. I would say at least double her numbers, and you’re going to
really need a lot more than that.”
Okay, so let’s call this $500
billion over five years.
Trump doesn’t stop there. A “foundation” of his economic plan, he says, is to
renegotiate NAFTA, bring trade cases against China, and “replace the present
policy of globalism – which has moved so many jobs and so much wealth out of
our country –with a new policy of Americanism.”
Who would benefit from a retreat
from globalism? Maybe giant American corporations that don’t export from the
U.S. because they already make things abroad for sale in foreign markets. But
not average Americans, who’d have to pay more for just about everything.
Choking off trade won’t result
in more good jobs in America. Trump says his trade policy will bring back
manufacturing to the United States. But today’s factories are automated. Even
in China, numerical-controlled machine tools and robots are replacing humans.
Oh, and Trump also wants to
scrap many environmental, health, and safety regulations. He says this will
further stimulate growth.
It’s another form of
trickle-down nonsense.
Even if we could get more growth by scrapping such
regulations, growth isn’t an end in itself. The goal is a higher standard of
living for most Americans.
If our air and water are
unhealthy, if we’re subject to more floods and draughts (especially
lower-income Americans who can’t afford to protect themselves and their homes
from the devastation), if our workplaces and our food are unsafe, what’s the
consequence? Our standard of living drops.
Trickle-down economics has
proven itself a cruel hoax. It’s cruel because it rewards people at the top who
least need it and hurts those below who are in greatest need. It’s a hoax
because nothing trickles down.
Trump’s “yuge” trickle-down
economics would be an even bigger bamboozle.
ROBERT B. REICH is Chancellor's
Professor of Public Policy at the University of California at Berkeley and
Senior Fellow at the Blum Center for Developing Economies. He served as
Secretary of Labor in the Clinton administration, for which Time Magazine named
him one of the ten most effective cabinet secretaries of the twentieth century.
He has written fourteen books, including the best sellers
"Aftershock", "The Work of Nations," and "Beyond
Outrage," and, his most recent, "Saving Capitalism." He is also
a founding editor of the American Prospect magazine, chairman of Common Cause,
a member of the American Academy of Arts and Sciences, and co-creator of the
award-winning documentary, INEQUALITY FOR ALL.
