Donald Trump's regime wants to eviscerate health care and social services to fund a multi-trillion dollar handout to the biggest corporations and the top 1%.
Trump is pushing an agenda of deep cuts to health care, social services, and environmental protections. Hundreds of thousands of Oregonians stand to lose their health insurance and food assistance, and tens of thousands of seniors and people with disabilities may lose in-home care. Those cuts will be devastating — not only to the people directly losing services, but to the tens of thousands of Oregonians whose jobs are dependent on those federal dollars coming to Oregon.
But that’s not all the Trump regime wants to cut. Trump is also calling for deep cuts to taxes for corporations and the top 1%.
Trump wants to slash the corporate income tax rate from 35% to 15%. This cut would save corporations over $2.2 trillion in federal taxes over the next 10 years. The top 1% own most of the corporate stock, so they are the ones who will benefit the most from this tax break.
Trump also wants a tax holiday to give corporations a big tax break on profits that were moved offshore to dodge taxes. With over $2.5 trillion in corporate profits kept offshore, corporations are dodging billions in federal and state taxes every year.
Contrary to Trump’s wishful thinking, this massive corporate tax cut will do little to stimulate the economy. Congress tried that before, in 2004, and it didn’t work. “Corporations spent the money on stock buybacks to benefit their shareholders and to fatten executive pay. A Senate subcommittee report in 2011 determined that the 15 biggest companies taking advantage of the tax holiday, including Pfizer, Hewlett-Packard and IBM, actually cut jobs and reduced research spending. The treasury lost $3.3 billion in revenue over 10 years, the panel found.”
Trump also wants pass-thru business income to be taxed at 15%, instead of the higher personal income tax rates. This represents a massive giveaway to wealthy business owners and high income earners like doctors and lawyers who get income through partnerships and LLCs. Cutting tax rates on pass-thru income by more than 60% is estimated to cost $1.5 trillion over the next 10 years, but may actually be much more expensive as people reclassify their employment to take advantage of lower taxes. The highest income Oregonians will save as much as $2 billion a year on their federal taxes if this tax break is enacted.
But there’s more! Another part of the Trump proposal is to cut personal income taxes, especially for the wealthy. Details are sparse, but just lowering the top income tax rate from 39.6% to 35% will save the top 1% of Oregon taxpayers around $375 million a year. Those same high income Oregonians would save another $40 million a year from repeal of the 3.8% tax on large capital gains that helps fund the Affordable Care Act.
Trump also wants to repeal the estate tax, which currently applies to individuals with estates worth $5.5 million or couples with estates worth $11 million or more. A very small percentage of people are affected by the estate tax— eliminating it would make the tax system more regressive, and also promote dynastic wealth transfers that grow inequality. It’s a big giveaway to the richest of the rich.
Oregon needs to be ready to protect Oregon families from funding cuts resulting from Trump’s tax giveaways to rich folks and big corporations. The only silver lining? Those corporations and the wealthy will have a lot more money to pay Oregon taxes.
To claim its share of the federal corporate tax cut, Oregon could raise over $2 billion a year from corporations and not increase their total taxes at all. What’s more, with federal taxes on the wealthy decreasing dramatically, Oregon could also collect hundreds of millions more from the top 1% without them seeing their net taxes increase.
Big corporations and the wealthy don’t need more tax breaks. If Trump is going to shred our health care and social service safety net, we will need to act to protect Oregon families. That will require a lot more revenue. With the Trump tax cuts, we could raise our low corporate taxes and taxes on the wealthiest 1% to cover the costs, and they wouldn’t even see their tax bills go up.