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 WydenThe 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
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."
Big Brother in action--Treasury sends study contradicting Trump ideology down the memory hole. https://t.co/fxCCIIJev2
— Bruce Bartlett (@BruceBartlett) September 28, 2017
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."