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

Testing Progressives, Centrist Dems Team Up with GOP to Deregulate Banks

This just might be the biggest test of Democratic unity yet in the Trump era. 

(CQ Roll Call via AP Images) Senators Mark Warner and Elizabeth Warren talk before the start of a Senate Banking, Housing and Urban Affairs Committee hearing in February. trickle-downers_35.jpg D espite Republican leaders’ best attempts to convince Senate Democrats from red states like Indiana, West Virginia, and North Dakota to vote for repealing the Affordable Care Act, cutting entitlements, and enacting sweeping tax cuts for the rich, congressional Democrats have remained united. That unanimity—along with a heaping dose of presidential ineptitude—has left the GOP’s legislative agenda largely unaccomplished 11 months into the Donald Trump administration. Alas, the congressional Democrats’ spine couldn’t stay stiff forever. So what’s the straw that broke the party’s back? Wall Street, of course. On Monday, news broke that Senate Banking Committee Chair Mike Crapo had struck a deal with a cadre of Wall Street friendly Senate Democrats to roll back regulations, including key parts of...

Republicans’ Disdain for Trump’s Base Oozes Into Tax Plan

Could the GOP tax plan erode Trump’s support among key parts of his base?

(AP Photo/J. Scott Applewhite)
(AP Photo/J. Scott Applewhite) House Speaker Paul Ryan defends the GOP tax plan on Capitol Hill on November 7, 2017. trickle-downers.jpg E very tax plan has winners and losers, and the House Republican tax plan is no different. The wealthy continue to prosper and the middle class gets the scraps. Everyone else? “The losers are going to lose badly,” says the Center for American Progress’s tax expert Seth Hanlon. But what happens if Trump’s strongest supporters are the losers losing badly? A Voter Study Group/Democracy Fund report published earlier this year identified five distinct groups of Trump voters. Trump and the GOP risk alienating two groups with their proposed tax plan, the “American Preservationists” and the “Free Marketeers,” who together make up 45 percent of the president’s base. According to the study, the “American Preservationists” are mostly made up of white working-class Americans, Trump’s core constituency. This group is the poorest of his supporters: More than half...

Retirement Savings Crisis Continues to Take a Back Seat on Capitol Hill

The Republican tax plan doesn’t touch 401(k)s as feared, but these accounts still don’t meet the retirement needs of most Americans.

Ron Sachs/picture-alliance/dpa/AP Images
Ron Sachs/picture-alliance/dpa/AP Images Representative Kevin Brady speaks as Senate and House Republicans announce their new tax plan at the Capitol trickle-downers_35.jpg The recently-released tax plan did not include the proposed changes to 401(k) contribution limits discussed in this article, likely due to the backlash against the initial idea. Yet as Thomhave explains here, most Americans do not use 401(k)s as a vehicle for their retirement savings. Earlier this year, the Trump administration and the Republican Congress began eliminating measures that could have bolstered Americans' abilities to save for retirement beyond inadequate 401(k) plans. O ne of the many dubious particulars of the Republicans’ new tax proposal is the way they’re considering paying for it: reducing Americans’ ability to save for their retirements through 401(k)s. The GOP’s plan is to offset the huge cost of tax cuts for the wealthy by limiting tax-deferred contributions into traditional 401(k)s, whittling...

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...

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