Trickle Downers

The Prospect's ongoing exposé of the folly, dysfunctions, and sheer idiocy of feed-the-rich economic policies.

Tax Cuts for the rich. Deregulation for the powerful. Wage suppression for everyone else. These are the tenets of trickle-down economics, the conservatives’ age-old strategy for advantaging the interests of the rich and powerful over those of the middle class and poor. The articles in Trickle-Downers are devoted, first, to exposing and refuting these lies, but equally, to reminding Americans that these claims aren’t made because they are true. Rather, they are made because they are the most effective way elites have found to bully, confuse and intimidate middle- and working-class voters. Trickle-down claims are not real economics. They are negotiating strategies. Here at the Prospect, we hope to help you win that negotiation.

Trickle Downers

Republicans Want to Make Corporate Tax Avoidance Even Easier

An obscure provision in the Trump tax plan—the territorial system—would further encourage multinationals to shift profits to low (or no) tax havens. 

(Press Association via AP Images) Apple CEO Tim Cook P resident Trump’s push to slash the corporate tax rate from 35 percent down to 20 percent, and his ludicrous claim that doing so will give the average worker a $4,000 raise, has drawn a great deal of scrutiny—and rightfully so. It’s a trickle-down fabrication to build support for a bill that will further enrich CEOs and shareholders, and do nothing for ordinary Americans. But the only colossal corporate giveaway in the plan includes more than the mere slashing of rates. Quietly, Republicans are also pushing a territorial taxation provision that would make it far easier for multinational corporations to avoid paying even a new 20 percent rate by providing further incentive to stash profits in offshore tax havens. Currently, the federal government uses a “worldwide” taxation system for corporations, which taxes both domestic and foreign profits. This system is badly flawed because multinationals are able to indefinitely defer...

Magic Corporate Tax Cuts and Other Fables

Trump and Republicans peddle the myth that money for corporations will trickle down to workers.

AP Photo/ Evan Vucci, File
AP Photo/ Evan Vucci, File Council of Economic Advisors Chair Kevin Hassett trickle-downers_35.jpg O ne of the biggest obstacles standing between Donald Trump and his plan to drastically cut corporate taxes is the opinion of the American public. Corporate tax cuts, though a key part of the administration’s proposed tax reform package, also happen to be a particularly controversial one. And with recent surveys showing that a majority of Americans remains skeptical of lowering taxes on corporations, hawking big corporate tax cuts to the public presents the GOP with a challenge. The White House’s Council of Economic Advisors stepped up to the plate on Monday, releasing a report that claimed that cutting the corporate tax from 35 to 20 percent could give American workers a pay raise as high as $9,000, once the economy has fully adapted to the change. Corporate tax cuts mean higher after-tax profits. In theory, these profits could be used to fund new investments, which would presumably...

How the Prison Phone Industry Further Isolates Prisoners

The high profits of expensive phone calls and video visits are often too lucrative for prisons—which can get a share of those profits—to pass up.

(Shutterstock)
(Shutterstock) trickle-downers.jpg W hen inmates are able to speak to friends and family while incarcerated, it not only improves their lives, but also, studies have shown, reduces recidivism after they leave prison. But to fill in budget holes or to make a profit, many state and local governments work with companies that put a high price tag on this basic need for the incarcerated. A handful of companies monopolize the prison phone industry, and their control of the market allows them to charge exorbitant rates for inmate calls to their homes. States that contract with these providers tend to choose the contractor that provides not the lowest price, but the highest commission rate for the state. As a result, prisoners and their families may pay up to $1 per minute on a call. In addition to the lucrative phone call industry, prison phone companies have begun to dabble in providing video visitation services, mostly to jails. Instead of meeting a prisoner in person, friends and families...

Mnuchin Fails The ‘Mnuchin Test’

The Treasury secretary trips himself up trying to justify a tax cut that cannot possibly benefit the working class.

Anthony Behar/Sipa USA via AP Images
Anthony Behar/Sipa USA via AP Images Secretary of the Treasury Steven Mnuchin speaks at a press briefing at the Hilton Midtown hotel during the United Nations General Assembly. trickle-downers_35.jpg A fter the populist surge that put Donald Trump in the White House, Steve Mnuchin tried to rebrand himself as a man of the people. He promised that as treasury secretary that he would unburden the working class and that the rich shouldn’t expect any sort of preferential treatment. Many observers were very skeptical of these promises—and for good reason. Appearing on Meet the Press this week, Mnuchin had been tasked with defending the Republicans’ new tax framework . But he couldn’t really explain it. Mnuchin repeated like a mantra that the “objective” of the tax plan was a “middle-income tax cut” and not a tax cut for the wealthy. Given that he had few real details to offer, Mnuchin could avoid both making promises and giving straight answers, while doubling down on his own dubious...

Trump Gives Tax Cuts to Rich and Fairy Tales to Everyone Else

Republicans are selling Trump's tax plan by saying it will help the middle class. But, as we knew all along, it’s written for the rich. 

(Photo: AP/Evan Vucci) President Donald Trump talks to reporters as he walks to board Marine One on the South Lawn of the White House, Wednesday, Sept. 27, 2017, in Washington. trickle-downers_35.jpg A fter toiling away for months, the so-called “Big Six” gang of Republican architects have finally unveiled their initial tax proposal, with the feel-good slogan “More Jobs, Fairer Taxes, Bigger Paychecks.” Despite all the political spin in recent weeks from Trump and his lieutenants about how the plan won’t be a big giveaway for the rich (and might even raise their taxes!) and will be a boon for the middle class, the proof is in the paper. As expected, the details of the plan show a proposal that was explicitly written for the rich , with provisions aimed at easing the tax burden of the wealthiest Americans. And for the middle class? Nothing but outright lies and murky promises to iron out the details in Congress. The plan cuts the corporate tax rate from 35 percent to 20 percent, a move...

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