As the national debt creeps closer to $1 trillion, members of the Trump administration are reportedly focused on helping Wall Street avoid paying taxes.
The Treasury Department is mulling plans to weaken or eliminate an Obama-era regulation meant to discourage companies from moving their cash offshore to avoid paying taxes, Bloomberg reported Tuesday.
In 2016, President Barack Obama put a rule in place to remove incentives for companies shuffling money overseas to make it appear on paper as if they had less profit. Lower profits would mean a lower tax bill in the United States.
Treasury is contemplating this move at the same time the Congressional Budget Office reports that the national deficit is just shy of $1 trillion this year, thanks in large part to lower corporate taxes in the wake of the 2017 tax law.
The 2017 tax law saw a massive financial windfall for Wall Street corporations, with taxes lowered from 35% to 21%. Since the bill became law, corporations have paid less taxes — or even no taxes — with questionable benefits to the economy as a whole. Less tax revenue from the bill will help expand the deficit by nearly $2 trillion over 10 years, according to the CBO.
And it’s not just Wall Street corporations that benefit from the law — so are American billionaires. A new study reported on by the Washington Post Tuesday shows that in 2018, for the first time in U.S. history, billionaires paid a lower tax rate than working-class Americans, in part because of a lower tax rate from the 2017 law, which the post called a "tipping point" and a "windfall for the wealthy."
But many experts agree the tax law failed to provide the "rocket fuel" to the economy promised by Trump, and recent economic indicators point to a sluggish economy teetering on the brink of recession. Trump's trade wars, particularly with China, have bankrupted farmers and are costing consumers thousands of dollars.
Now the Trump administration is contemplating a way to let corporations cut corners on taxes even more, potentially making the deficit worse.
The rest of America continues to be left out in the cold.
Published with permission of The American Independent Foundation.