Image: yachts docked in harbor
Trump’s tax cuts won’t do a thing for wages because when you have five yachts, all you really need is for someone else to pay your tax bill. (Credit: Roger WCC BY-SA 2.0)

A tax cut promised by Donald Trump to benefit middle class Americans seems more like a desperate Hail Mary play for the midterms. Whether or not he will follow through doesn’t matter. The question is: Will Americans experience an increase in their standard of living?

Most won’t.

Tax Cut Doesn’t Benefit Middle America

The move was a feeble attempt to dispel sharp criticism of the 2017 GOP tax bill which saw the corporate tax rate slashed by 40% with companies using the funds not for wage increases, but for stock buybacks. Once the tax is fully realized, the Urban-Brookings Tax Policy Center predicts that 83% of the windfall will go to the richest 1% while simultaneously ballooning the deficit by $1 trillion, according to the Congressional Budget Office. The GOP wants to cut Medicare and Social Security to finance it.

Trump may be even more out of touch than House Speaker Paul D. Ryan who tried to sell the wildly unpopular bill by triumphantly tweeting this gem the following February about a secretary getting an additional $1.50 a week.

Paul Ryan tweets about $1.50 tax increase
Paul Ryan: February 3, 2018 tweet

What the GOP doesn’t understand is that almost half of Americans pay no federal income tax because they are too poor to do so – but they still make contributions to Medicare and Social Security. This means that the promised tax cuts won’t do squat for some 76.4 million Americans.

It’s a diabolical shell game, promising tax cuts when most people don’t pay them, while simultaneously pretending the government pays for Medical and Social Security, not workers who pay into the system.

It’s About Wages, Not Taxes, Stupid

According to the Economic Policy Institute, the top 1% wage grew 138% since 1979, while wages for the bottom 90% grew only 15%.

If you want to improve the lives of the middle class, you have to increase wages and do so significantly. Even a promised few thousand dollars will not make up for decades of wage stagnation.

Forbes outlines the reason for the problem in a nutshell, calling it the “the world’s dumbest idea.” When corporations began valuing shareholders above everything else – and ignoring the needs of the customer and employees, wages stagnated. It was capitalism on steroids, short term profits at a cost of long term value of the company. Employees became a problem to manage overnight, a liability, with companies driving them to produce more while paying them less in wages and benefits simply because they could.

The result? Most Americans – 61% can’t scrape together $1,000 for an emergency. And with Trump’s promised tax cut, most still won’t be able to do so.

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Shelly Fagan

Shelly Fagan is a freelance writer living in Arizona. She is passionate about American politics, business, universal basic income and worker rights. Follow her on Twitter @FaganWrites or on Medium at

1 Comment

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