Oliver Wendell Holmes Jr. famously wrote in a 1927 Supreme Court opinion, “Taxes are what we pay for a civilized society.” They are the means to fund public services, a way of contributing to our common life and the common good, and an instrument of economic justice—the expression of solidarity through policy. But a telling mark of our barbarous times has been a decades-long obsession with cutting taxes, exemplified most recently by the massive tax cut signed into law just over one year ago—the most significant legislative achievement of Donald Trump’s presidency.
Of course, the cuts were not just Trump’s doing. They were also the work of congressional Republicans, not least the recently departed House speaker and indefatigable champion of trickle-down economics, Paul Ryan. “Most people, half the people in this country, live paycheck to paycheck, so there’s a lot of economic anxiety,” Ryan told the New York Times in November 2017. His prescription for such anxiety was, as always, “tax reform,” with the promise that the resulting economic growth and a few extra dollars in every paycheck would take care of everything.
Of course, it hasn’t. The “Tax Cuts and Jobs” bill has proved to be mostly a gift to corporations and the wealthiest Americans. The slashing of the corporate rate from 35 percent to 21 percent has provided major windfalls for large companies, including Walmart, which saved $1.6 billion over the first three quarters of 2018, and Bank of America, which saved $2.4 billion. Meanwhile, Paul Ryan had the gall to brag about the public-school secretary who was “pleasantly surprised” by the extra $1.50 per week she received in her paycheck. The legislation also specifically created a new deduction for so-called “pass-through” entities—companies organized as LLCs, sole proprietorships, partnerships, or S corporations. The result is an estimated $17 billion in tax savings for millionaires. (As it happens, most of Donald Trump’s businesses are pass-through companies.) All told, according to one estimate, 83 percent of the benefits from the tax cuts would be going to the wealthiest 1 percent of Americans.