Trillion US Tax Giveaway-$10 Trillion More Coming
By Jack Rasmus
" - “From
2001 to 2016 US politicians have cut taxes on
corporations and wealthy investors by no less than
US$10 trillion. Another US$10 is coming.
for more tax cuts now pending in Congress – plus
proposals supported by Trump, Cruz, other Republican
presidential candidates – will add another US$10
trillion in tax cuts. And, as from 2001 to 2016, the
latest proposals will once again benefit mostly US
big banks, big corporations, and the wealthiest
investors – i.e. the 1 percent and, even more so,
the 0.1 percent and 0.01 percent.
Clinton Opens the Door: 1997-1998
little known, but the trend toward massive investor
and corporate tax cutting in recent decades began
with Bill Clinton and his 1997-98 tax cut
legislation. The 1997 Act cut taxes by US$400
billion. The wealthiest 20 percent households
received 75 percent of the tax cuts or US$300
billion. The Clinton cuts reduced capital gains and
estate taxes, cut gift taxes and the corporate
alternative minimum tax, and opened up corporate tax
loopholes while limiting the IRS ability to
investigate wealthy tax evasion. Forty-eight million
of the lowest income households got no cuts or saw
their taxes actually increased. Another 48 million
households got tax cuts averaging US$300. Capital
gains taxes were cut by US$200 billion benefiting
the wealthiest 1 percent households (1.2 million)
who received an average cut of US$16,187, according
to the Center for Tax Justice. A follow up tax act
in 1998 further restricted the IRS from
investigating tax fraud by the wealthy and
corporations, while expanding capital gains tax
provisions still further. The modern era of tax
cutting for the wealthy and their corporations thus
begins with Bill Clinton.
Bush ‘The Great Benefactor’: 2001-2008
wasted no time in blowing open the door unlocked by
Clinton. In a succession of annual tax cuts starting
in 2001, personal income taxes under Bush were
reduced by US$3.3 trillion, according to the
independent research source, ‘Tax Notes.’
In 2001, as
the ultra-conservative think tank, the Heritage
Foundation, admitted the 2001 Bush cuts in personal
income taxes mostly benefited capital incomes and
the 4.7 percent wealthiest households; 95 million
U.S. taxpayers received no reductions at all from
Bush’s US$1.35 trillion 2001 cuts. Roughly
three-fourths of the US$1.35 trillion – i.e. US$1
trillion – went to the wealthiest households,
according to the National Tax Journal’s analysis. In
2001, the wealthiest 1 percent households also
received another US$138 billion tax windfall in the
reduction of Estate and Gift taxes.
Bush turned to reducing corporations’ taxes. Faster
business depreciation write offs (a tax cut) and
more corporate tax loopholes, like ‘net operating
loss’, added another US$1 trillion in tax cuts.
In 2003, it
was back to more tax cuts for wealthy individuals.
Cuts in capital gains and dividend taxes, from 39.5
percent to 15 percent were enacted, faster tax rate
cuts at the top levels, and even more generous
depreciation and business tax cuts, cut taxes for
businesses by another US$400 billion and for mostly
wealthy individuals by another US$800 billion.
In 2004 it
was tax cuts benefiting mostly the largest U.S.
multinational corporations. The 700 page Corporate
Tax Reduction Act of 2004 produced, according to the
Center for Tax Justice, “the largest business tax
relief program in more than a decade”. Many of the
dozens of offshore tax sheltering corporate tax
loopholes that exist today were born in the 2004
Act, which also provided a ‘tax holiday’ that saved
multinationals US$195 billion in back taxes owed, a
US$80-$100 billion in export subsidy tax rebates to
corporations, deduction of foreign taxes from U.S.
taxes, and scores of special tax cut provisions for
industries like tech, pharmaceuticals, banks,
aircraft leasing, beer and wine, film and
entertainment and other special interests. Estimates
are the 2004 corporate reductions amounted to
another US$500 billion for the decade.
for just his first term in office, add up to
wealthiest households, investors, and businesses
getting approximately US$3.8 trillion in tax cuts.
No wonder U.S. tax revenues from corporations
declined to only 6 percent of total government tax
revenues, compared to previous averages as high as
2008 crash, Bush and the Democratic Congress passed
another US$168 billion emergency tax cuts to try to
slow the recession, with little effect. It added
another US$50 billion in business tax cuts, along
with emergency rebates to consumers.
initial emergency stimulus bill of 2009 called for
US$787 billion, about US$315 billion of which were
tax cuts and at least US$200 billion in business and
investor cuts. Democrats in Congress at the time
proposed an additional US$120 billion in consumer
household tax cuts, but Obama agreed with his
business advisers and Republicans and cut it out of
his 2009 stimulus proposals.
the Bush tax cuts of 2001-03 were scheduled to
expire. However, Obama supported the extension of
the cuts for another two years. That resulted in
US$450 billion in further tax cuts for investors and
2011, the Congress cut $1 trillion in spending on
education and other social programs, and scheduled
another US$1 trillion for cuts starting in 2013 –
half of which as for defense and half for more
social programs. A ‘fiscal cliff’ crisis, as it was
called, loomed for 2013 as the US economy slowed. A
deal was struck at year-end 2012 between Obama, U.S.
House of Representatives Republicans, and
conservatives in the U.S. Senate to avoid the
so-called ‘fiscal cliff’. As part of that deal, no
less than US$4 trillion more in tax cuts were passed
– entrenching the Bush tax cuts benefiting
corporations and investors with US$3 trillion more
for the next decade, and at minimum US$3 trillion
forever as the Bush era cuts now became permanent.
throughout the Obama era, multinational corporations
continued to hoard profits offshore and not pay U.S.
taxes. Un-repatriated corporate taxes due but not
paid rose from US$700 billion during the Bush years
to more than US$2.1 trillion by 2014. If one
averages the offshore tax avoidance by U.S.
multinationals over the Obama years, it averages
approximately US$1 trillion a year. If U.S.
multinationals had paid the required 35 percent
corporate tax rate, if the numerous loopholes
created since 2002 were removed, if the ‘tax
inversion’ scams since 2014 were not allowed, it
would have meant US$350 billion a year for the eight
years, or about US$2.8 trillion, in additional taxes
paid by multinationals. Or, US$2.8 trillion in what
amounts to de facto tax cuts since they were allowed
by Bush-Obama and Congresses over the past decade
and a half.
the Obama regime a total of roughly US$6.5 trillion
has been added in tax cuts for wealthy households,
investors, multinational corporations, and U.S.
business in general. Summing up, that’s US$300
billion from Bill Clinton, US$3.8 trillion from
Bush, and US$6.5 trillion under Obama – for a total
of at minimum US$10.6 trillion!
that mind-boggling total is not the end of it.
Candidates now running for office for president of
the United States are proposing trillions more in
tax giveaways to the 1 percent and their
Republican Presidential Candidates: ‘More Is Not
main republican presidential candidates propose
cutting wealthy and corporate taxes by well more
than US$10 trillion. Here’s just a few of the main
proposals of the top 3 Republican candidates:
Reduce the personal income tax from 35 percent to 10
percent. Then end the corporate income tax
altogether and replace it with a 16 percent business
value added tax (VAT) – most of which business would
obviously then pass on to consumers to pay.
Businesses could also deduct every penny they spend
on investments from their taxes owed. Invest it all
and pay no taxes whatsoever, in other words. The
conservative Tax Foundation has estimated Cruz’s
plan would amount to US$768 billion in tax cuts for
corporations and the wealthy 1 percent, the latter
of whom would see their take home income immediately
rise by 30 percent. Other detailed provisions would
push it well over US$10 trillion for the next
Rubio: End all taxes on capital gains, dividends,
and interest. Reduce the top rate for business
incomes from 39.5 percent to 25 percent. (For wage
incomes reduce it only from 39.5 percent to 35
percent). The Rubio proposal would have meant the
US$5 trillion paid by corporations in stock buybacks
and dividends since 2010 would have been totally
tax-free for wealthy investor households. So too
would the more than US$1 trillion a year in total
capital gains every year since 2012. In other words,
just the end of capital gains would mean a trillion
dollars minimum a year for every year forever. Add
to that the 15 percent rate cuts for business income
and high end CEO salary tax cuts.
Trump: the Tax Foundation and other sources estimate
Trump’s tax cut at US$12 trillion over the coming
decade: US$10 trillion in personal income tax cuts
and another US$1.5 trillion in corporate tax cuts.
Trump reduces the personal income tax top rate from
35 percent to 25 percent and corporate income tax to
15 percent. Trump would eliminate the estate tax
(another US$238 billion), the Alternative Minimum
Tax that hits the wealthy, and the 3.8 percent
Obamacare tax on the wealthiest.
‘wannabe’ Republicans – Carson, Paul, Christy and
other assort ‘goofies’ – parrot the same, and more,
US$10 trillion in new tax giveaways to the
wealthiest, investors and businesses across the
It may have
taken 15 years to give the first US$10 trillion
away. But it looks like it will take less than half
that to give the next US$10 trillion.
Rasmus, Ph.D Political Economy, teaches economics
and politics at St. Mary’s College in California.
He is author of the just released new book,
‘Systemic Fragility in the Global Economy’, by
Clarity Press, 2016. His blog is