Broken promises about the Republican tax bill pile up, and a new report from the nonpartisan Congressional Budget Office (CBO) brings more bad news for the bill’s backers, including Congressman Steve Knight (R-Palmdale).
National deficits are skyrocketing compared to a year ago, thanks to the GOP tax bill. This fiscal year, the deficit is an estimated $682 billion, which is $116 billion more than it was at this point last year, according to the CBO.
That’s a 20 percent increase year over year.
When the bill was going through Congress, Republicans vowed it would pay for itself.
“Not only will this tax plan pay for itself, but it will pay down debt,” claimed Treasury Secretary Steve Mnuchin. Knight, for his part, uses his campaign website to speak in stark terms about the national’s high debt and deficit, calling them “morally wrong and is a blatant act of generational theft.”
Yet according to the CBO, one of the main factors for the higher deficit is a reduction in the corporate tax rate. Corporations paid $66 billion less to the Treasury Department, forcing the need to borrow more.
What are those companies doing with the savings? Not investing in workers.
Instead, companies are spending hundreds of billions of dollars on stock buybacks that “help enrich corporate executives, whose compensation is often linked to their share price,” reports CNN.
In fact, workers have seen wages fall after adjusting for inflation, since the tax bill became law.
“So far, that real money is by far mostly going to shareholders and not workers,” reports Bloomberg.
Estimates show that by the time the tax bill is fully implemented, it will increase the deficit by almost $2 trillion.
In return for this “generational theft,” Knight voted for, Wall Street is thriving while America’s working class is falling behind. But this should come as no surprise.
“Of course, companies were expected to receive the bulk of the tax savings,” writes Bloomberg. “That’s how the plan was designed.”