Skip to main content

Sign up for our newsletter.

Quality journalism. Progressive values. Direct to your inbox.

U.S. Treasury Secretary Steven Mnuchin testifies before the House Appropriations Committee's Financial Services and General Government Subcommittee in the Rayburn House Office Building on Capitol Hill June 12, 2017 in Washington, DC. (Photo: Chip Somodevilla/Getty Images)

Trump Accused of Burying Research Showing Trickle-Down Tax Cuts Just 'Snake Oil' Scam

"Big Brother in action—Treasury sends study contradicting Trump ideology down the memory hole."

Jake Johnson

As the Trump team struggles mightily to portray a tax plan that would disproportionately reward the wealthy—and Trump himself—as pro-working class, the Treasury Department has reportedly suppressed a government analysis that exposes as false President Donald Trump's central claim that workers, not rich corporate shareholders, would be the primary beneficiaries of a massive reduction in the corporate tax rate.

"It is disturbing the Treasury Department is burying research proving that trickle-down economics harms American workers."
—Sen. Ron Wyden
The Wall Street Journal's Richard Rubin first reported that the analysis—published in 2012 by the Office of Tax Analysis (OTA)—was deleted from the Treasury Department's website on Thursday.

The suppressed study (pdf) demonstrated that "workers pay 18 percent of the corporate tax while owners of capital pay 82 percent," Rubin noted, a breakdown that the Trump administration and the Republican Party has effectively reversed in selling their proposals to the American public.

OTA's conclusions were "in line with many economists' views and close to estimates from the nonpartisan Joint Committee on Taxation (JCT) and Congressional Budget Office," Rubin adds. "The JCT, which will evaluate tax bills in Congress, estimates that capital bears 75 percent of the long-run corporate-tax burden, with labor paying the rest."

Treasury Secretary Steven Mnuchin has argued, against mountains of contrary evidence, that it is in fact workers who end up bearing the brunt of taxes on corporate profits, thus allowing him to paint a massive rate reduction—which Trump has proposed—as a boon for the working class.

As The Week's Jeff Spross observes, this is a common right-wing argument. But while conservative think tanks like the Heritage Foundation claim that corporate tax cuts lead to higher wages for workers, the last several decades of evidence indicate the opposite, Spross concludes.

"[W]henever a company gets a windfall," Spross writes, "the money goes to wealthy shareholders, CEOs, and the lucky members of the upper class."

"Whenever a company gets a windfall, the money goes to wealthy shareholders, CEOs, and the lucky members of the upper class."
—Jeff Spross, The Week

Many argued that the Treasury Department's removal of the OTA paper amounts to blatant suppression of contradictory evidence in the service of selling "snake oil" to the American public.

Sen. Ron Wyden (D-Ore.) called Trump's tax plan a "scam" and denounced Treasury's efforts to hide opposing evidence in an interview with the Wall Street Journal on Thursday.

"History has shown most of the pockets lined by corporate tax cuts are found in wealthy shareholder suits," Wyden concluded. "It is disturbing the Treasury Department is burying research proving that trickle-down economics harms American workers."

Bruce Bartlett—who by his own admission helped create the GOP myth that tax cuts lead inevitably to economic growth in his role as policy advisor to former President Ronald Reagan—described Treasury's deletion of the OTA study as "Big Brother in action."

In a video published Friday, economist Robert Reich succinctly explained why the GOP's claim that "American corporations need a tax cut in order to be competitive" is just plain "rubbish."

Watch:


Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.

We've had enough. The 1% own and operate the corporate media. They are doing everything they can to defend the status quo, squash dissent and protect the wealthy and the powerful. The Common Dreams media model is different. We cover the news that matters to the 99%. Our mission? To inform. To inspire. To ignite change for the common good. How? Nonprofit. Independent. Reader-supported. Free to read. Free to republish. Free to share. With no advertising. No paywalls. No selling of your data. Thousands of small donations fund our newsroom and allow us to continue publishing. Can you chip in? We can't do it without you. Thank you.

Warnock Defeats Walker in Georgia, Giving Democrats 51-49 Senate Majority

"Tonight, the people—young, Black, Brown, and working people—expanded the Senate majority, neutralized the power of Joe Manchin, and defeated yet another fascist," the Sunrise Movement cheered.

Brett Wilkins ·


'About Damn Time': NY Jury Finds Trump Organization Guilty on All Counts of Tax Fraud

"Today's guilty verdict against the Trump Organization shows that we will hold individuals and organizations accountable when they violate our laws to line their pockets," said New York Attorney General Letitia James.

Brett Wilkins ·


Oxfam Rebukes EU Over Delayed Deal on Global Minimum Corporate Tax

"This is a loss to ordinary people who are struggling with the cost-of-living crisis and a win to the ultra-profitable corporations," said the group's tax expert for the bloc.

Jessica Corbett ·


Global Biodiversity Summit Called 'Make-or-Break Moment' for Wildlife

"The deluded dreams of billionaires aside, there is no Planet B," said U.N. Secretary-General António Guterres. "We must fix the world we have."

Julia Conley ·


Congressional Progressives, Climate Activists Rally Against Manchin's 'Dirty Deal'

"As if spending $847 billion on the military-industrial complex wasn't bad enough," said Rep. Rashida Tlaib, "now they want to add sacrificing frontline communities for polluter profits to the package?"

Brett Wilkins ·

Common Dreams Logo