A year ago this week, Republicans passed the Tax Cuts and Jobs Act. Among other things, they promised their legislation would generate jobs and increase wages. Neither has happened.
Data suggests that, despite Republicans positioning their tax cuts as a boon for the middle class, the results have been more beneficial to shareholders than people who actually work for a living. Out of 152 corporations surveyed, 90% did not plan on offering employees one-time bonuses related to the tax bill, and 86% of top executives said they would not raise salaries. So, not only were bonus announcements from companies like Walmart and Home Depot exceptions to the rule, but when examined further they were not nearly as generous as headlines might suggest.
Trump promised his tax cut would give families a $4,000 pay raise. This has not been the case, to put it lightly. Assuming a full 52 weeks of work, the average American will see just a $323 annual increase as a result of last year’s tax bill.
This isn’t a surprise to anyone who’s been paying attention. We’ve had decades of evidence that real wages (wages when adjusted for inflation) are not positively affected by trickle-down policies. Even when wages technically increase, like the 2% gain in nominal weekly median earnings from 2017’s second quarter to 2018’s second quarter, the increase is wiped out by inflation, which was 2.7% over the same period.
This isn’t to say that last year’s tax cuts have had zero effect. After all, the wealthiest Americans are richer now than they have ever been and are hoarding trillions of dollars. New records have been set in regards to the number of stock buybacks that took place this year. All in all, Republicans’ tax bill had a hugely positive effect on millionaires and corporations, just not the middle class.
A year later, we can safely say that Republicans’ tax overhaul was a huge payoff to donors, and a scam for average Americans. The economy is not better off because of it, and neither are millions of poor and middle-class families who desperately needed real, comprehensive tax relief. There’s only one way to right this wrong, and that’s by repealing the Tax Cuts and Jobs Act and making our tax code fairer for those who work.