What Mob Movies Teach Us About GOP Tax Policy
Bilal Baydoun for Common Dreams
In one of the more memorable scenes from
the Scorsese mob classic Goodfellas, Jimmy scolds his
co-conspirators for flaunting the spoils of their infamous Lufthansa Heist—the
1978 theft of $6 million in cash and jewels from New York’s JFK Airport.
“Didn’t I tell you not to get anything?” Jimmy snaps at
Johnny, who had arrived at the Christmas party in a new pink Cadillac. Moments
later, Frank walks in alongside a date donning a new mink coat, and Jimmy is
incensed. “In two days, one guy gets a Caddy and one guy gets a $20,000 mink!”
The mob logic portrayed here—that when you hit a major lick, it’s best to lay low and not attract attention—seems innocent by the standards of the Trump administration’s signature heist: the 2017 Tax Cuts and Jobs Act (TCJA). That law paved the way for corporate America’s “mink coats and Cadillacs” moment by slashing the corporate tax rate from 35% to 21%—robbing the public of roughly $1.3 trillion and further enriching billionaires and top executives.
In Goodfellas terms, that’s equal to 46,428
inflation-adjusted Lufthansa heists. And like Johnny and Frank, the
corporations who scored the biggest windfalls have since done the opposite of
lay low. They have instead gone on a years-long profiteering binge, rolling out
some of the most egregious tactics to cash in even further.
In typical trickle-down fashion, the corporate rate cut was
sold as a boon to workers and ordinary families. The Trump administration said the TCJA’s most expensive provision would boost
wages to the tune of $4,000 per year. That promise, it turns out, was a fraud.
According to a recent study, 90% of American workers received zero dollars
from the TCJA’s corporate rate cut. Meanwhile, executive pay soared, and stock
buybacks hit a record
high $1 trillion in the year after it passed.
So what did the typical American family get if not a major boost in income? Junk fees, deceptive scams at the grocery store, price gouging, and major collusion scandals in everything from meatpacking to rentals to oil and gas. It can be said that the TCJA unleashed a greatest hits of predatory tactics by rewarding otherwise too-risky pricing schemes that push consumer loyalty to the brink.
Lower taxes and record profits also mean more money to buy lobbying power in Washington to push for more tax cuts. In that way, our dangerously low-tax environment exposes all of us to the worst and riskiest corporate behavior.
According to a February study from
the Institute on Taxation and Economic Policy (ITEP), 342 profitable
corporations paid an effective tax rate of 14.1% from 2018 to 2022, well below
the 21% signed into law by the Trump administration. Layered onto decades of
corporate tax cuts, the TCJA pushed the U.S. to the very bottom of the OECD in terms of revenue raised from
corporations as a share of the economy. And Republicans are poised to go even further if former U.S.
President Donald
Trump retakes the White House.
A recent analysis from CAP Action found that Trump’s
plan to cut the corporate tax rate even further to 15% would provide the top
100 U.S. companies with an additional $48 billion gift every year. This means
even more breathing room to test out the next wave of ripoff schemes needed to
satisfy investors. Whether it’s major credit card companies jacking
up APRs even further, Amazon running more casino-style pricing experiments, or
Tyson Foods deploying more algorithms to allegedly collude on meat
prices, lower taxation offers a sweet incentive to profiteer at the expense of
consumers.
Raising the corporate tax rate won’t fix everything that’s
broken with corporate America or our economy. But it will fundamentally change
the economic rules. Higher corporate taxation means fewer opportunities to
hoard profits and rip off consumers, and more opportunities to invest in
healthcare, child care, education, and jobs—the things proven to improve
quality of life and democratize economic opportunity.
Since the Trump tax cuts, the largest corporations have
flaunted their record profits like caddies and minks, bragging on earnings calls about the new tricks they’re
using to raise prices on consumers. The era of tax heists must end if we are to
stop them. The time to end it is now.
Bilal Baydoun is the former director of policy and research at the Groundwork Collaborative.
