Almost half the economic gains from the Republican tax bill will end up in the pockets of foreign investors, according to a new report. When he voted for the unpopular bill, Rep. Steve Knight (R-Palmdale) didn’t disclose that his vote was significantly helping foreign investors, but that’s precisely what is happening.
While he promoted the bill as it made its way through Congress, Knight declared it would be “a tax code that puts American families first.” But that is simply not true.
The Institute on Taxation and Economic Policy (ITEP) released an analysis showing foreign investors will reap $47 billion in economic gains in 2018, which is more that the combined benefit of 60 percent of Americans. In a few years, more than 70 percent of economic gains will flow to foreign investors, while Americans are left with 30 percent of the gains, plus all the debt.
All in all, ITEP notes, “Over the coming decade, 43 percent of the growth in economic output resulting from TCJA [tax bill] will flow to foreign investors rather than Americans.”
Other than foreign investors, the wealthiest Americans take most of the gains. According to the ITEP analysis, the richest 20 percent of Americans will get a $202 billion kickback, while the poorest 20 percent must be content with $4 billion, or two percent of what the richest receive.
Wall Street tycoons are also making out just fine. The tax bill is handing Wall Street banks a $19 billion kickback. Relatedly, the “finance, insurance, and real estate” sector donated more than $200,000 to Knight, accounting for almost 20 percent of all of Knight’s campaign contributions, according to the Center for Responsive Politics.
Meanwhile, Californians are on the hook for higher taxes. About a million Californians will pay $12 billion more in taxes next year alone. Because of provisions in the Knight-backed tax bill, Los Angeles residents can expect to pay up to $76,000 more for a 30-year mortgage.
“The bottom line is that anyone who thought President Trump was serious when he declared a policy of ‘America First’ should be feeling awfully disappointed right now,” ITEP says. ” He apparently meant high-income Americans and foreign investors first, everyone else last.”
ITEP could say the same for Knight. It looks like the tax bill Knight wanted so badly does not put “American families first,” as he promised.