History Speaks for Itself: Tax Cuts Don’t Work

By Shailly Gupta Barnes, Truth Commissions Program Coordinator at the Kairos Center for Religions, Rights, and Social Justice; and The Rev. Dr. William J. Barber, II, Distinguished Visiting Professor of Public Theology at Union Theological Seminary and President & Sr. Lecturer of Repairers of the Breach

Photo by Steve Pavey Photography for the Poor People’s Campaign: A National Call For Moral Revival

President Trump can’t admit what many extreme members of Congress are finally admitting — the Republican tax plan was a scam to benefit the wealthy and corporations at the expense of the poor and working poor. Senator Marco Rubio (R-FL) admitted in a recent interview that, “there’s no evidence whatsoever that the money’s been massively poured back into the American worker.” Instead, that money has been handed out to the wealthy and corporations and spent on corporate share buybacks which have only benefited shareholders. What’s worse is that the richest 10 percent of Americans own more than 90 percent of all stocks and bonds. The Republican tax plan creates a giant merry-go-round of wealth for the rich, leaving the poor and working poor on the sidelines.

Instead of recognizing what is obvious, President Trump continues to mislead the American people about the impact of his tax cuts on the economy, minimum wage, and small businesses. But this comes as no surprise given the history of supply-side economics. History has proven time and time again that cutting taxes for the rich only benefits the rich, not the entire economy. Extreme politicians regularly quote supply-side economics as the reasoning behind handing the rich more money and taking it from the poor and working poor. Supply-side theory, also known as “Reaganomics,” or the “trickle-down” theory, assumes that giving tax cuts to the rich provides them with incentives to invest in businesses and jobs, therefore producing additional economic benefits that trickle down to the rest of the economy. For example, the theory claims that if the owner of a large corporation receives tax cuts and is able to retain more of their profits, they will then take those cost savings and hire more workers, invest in more offices, better equipment, and other related things. These investments will supposedly, in turn, boost employment, raise productivity, and incentivize business owners to pay employees more money since they are making the business more productive.

Theoretically.

Instead, this theory allows the rich to continue to grow richer and further exacerbates the wealth gap between the poor and the rich. This gap is compounded further by the threat of reduction in funding for poverty assistance programs like the Temporary Assistance for Needy Families (TANF), Medicare, Medicaid, and the Supplemental Nutrition Assistance Program (SNAP). Without these government safety net programs, millions of white, black, brown & indigenous people would be in poverty, and vital programs that support things like universal health care and education would be lost. In 2016, SNAP benefitted about 20 million children a month, that is one in four of America’s children. In 2017, programs like SNAP, SSI and housing vouchers each prevented over 3 million people from falling into poverty. These programs clearly work and there is a continuing need for them. The lowest-income households were hit the hardest by the Great Recession and are the only income group whose household income remains significantly lower than it was prior to the recession. And, there are more than 140 million people who are poor or almost poor dealing with some hardship as the result of systemic racism, poverty, ecological devastation, or the war economy.

Despite this need for government assistance, extremists in Congress are constantly working to undermine the social safety net and further disenfranchise the poor. Speaker Paul Ryan, a self-proclaimed deficit hawk, is one of many in the Republican-led Congress who has advocated for welfare budget cuts and reforms but has championed deficit spending on things like defense, and most recently, tax cuts for the wealthy & corporations. Speaker Ryan is also the same lawmaker who bragged about eliminating former President Obama’s rule that would match every dollar spent on increased defense funding with a dollar increase for non-defense discretionary programs. President Trump’s proposed budget would have slashed billions from food stamps, health insurance & federal housing subsidies in order to fund an already enormous defense budget as well as pay for the recent corporate tax cuts.

In 2017, the U.S. spent nearly as much money on defense as on all welfare programs combined. The budget that was passed including an $80 billion increase in defense spending and only a $63 billion increase for all other non-defense spending. While many Democrats claimed that the bill was a win for Americans, the details of the agreement show very little money going toward programs that support the poor. This only proves that our politicians care more about funding their immoral wars than they do about uplifting those who need the government’s assistance the most. President Trump has also continued his assault on anti-poverty programs, recently declaring that states are now allowed to impose work requirements for Medicaid. This puts millions of people at risk of losing health insurance, despite many of these people having jobs. Despite not getting the budgetary cuts that he wanted, President Trump’s recent move puts millions at risk of losing health insurance, despite many of these people having jobs. This was the failed logic behind President Clinton’s “welfare reform” of 1996 that is now being applied to Medicaid, food stamps, and public housing to eliminate the social safety net for millions of people who are struggling to get by. President Trump justifies this, in part by claiming that the Affordable Care Act caused a rise in insurance premiums, rather than admitting that it was a failure of some states not expanding Medicaid coverage that precipitated higher costs.

This is not the America that our foremothers and forefathers envisioned. These extreme policies do not “establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity.” Republicans have had the power to drastically improve the circumstances for our poorest people, but instead, they have abused their power to pass immoral legislation that only benefits the wealthy, and does so by stepping on the backs of the poor. They’ve promised again and again that benefits to the wealthy are benefits for the poor, but as Senator Rubio clearly stated, those benefits have not been seen by American workers. While our unemployment rate is down, too many families are still struggling to make ends meet. Wage growth remains low despite Republicans’ claims that their tax law would increase wages. But American workers are the ones who keep voting these corrupt lawmakers into office year after year. Some of our poorest people reside in the reddest states and are fueling the very fire keeping them impoverished.

James chapter five presents us with this moral warning: “[N]ow listen, you rich people, weep and wail because of the misery that is coming on you. Your wealth has rotted, and moths have eaten your clothes. Your gold and silver are corroded. Their corrosion will testify against you and eat your flesh like fire. You have hoarded wealth in the last days. Look! The wages you failed to pay the workers who mowed your fields are crying out against you. The cries of the harvesters have reached the ears of the Lord Almighty. You have lived on earth in luxury and self-indulgence. You have fattened yourselves in the day of slaughter. You have condemned and murdered the innocent one, who was not opposing you,” (James 5: 1–6).

No one will ever truly prosper by oppressing the poorest among us. Extremists have historically tried to undermine efforts to uplift our most disenfranchised people and are continuing that trend today. Congress continues to make this mistake time and time again, but now is the time when we ask you to join us and say enough is enough. These immoral policies being put forward by our lawmakers are hurting the poor, the working poor, and people of all colors. We cannot continue to view these issues as “somebody else’s problem.” We are tired of seeing the rich get richer while the poor stay poor. We are calling for a season of nonviolent moral fusion direct action. If you’ve had enough of seeing Congress and state legislatures pass policies that only benefit the rich while continuing to slash the budgets of programs that help the poor, then we call on you to enlist in the Poor People’s Campaign: A National Call for Moral Revival.

For more information, visit poorpeoplescampaign.org