Social Security in trouble
The coronavirus has exposed an economy that is deeply flawed, structurally unsound, and in need of serious reform.
The majority of the wealth created in the last decade has been seized by the affluent who have used this power to make sure this system works for them.
When the pandemic revealed that 43 to 45% of American families did not have a $400 cash reserve and another 30% of American families could not miss two paychecks without causing financial stress, it’s obvious something is seriously wrong and income inequality is indeed, a reality.
The Trump administration’s one major piece of legislation, “The 2017 Tax and Job Act,” delivered the biggest corporate tax cut in U.S. history, but there was almost no benefit — 6% — to American workers.
The bulk of the $150 billion tax cuts given to corporations, in 2018, went into stock buy backs and shareholder dividends, primarily for the 10% of Americans who owned nearly 90% of the total U.S. stock market.
This bill was drafted in secret and not a single member of Congress saw an honest assessment of this bill before voting. It was found to contain massive new tax loopholes and opened the door to new forms of tax avoidance, primarily for the richest Americans.
For the first time in American history, in 2018 the 400 wealthiest Americans paid a lower tax rate than any other group.
Florida Congressman Vern Buchanan, a member of the House Ways and Means Committee and leader of the Tax Policy sub-committee, on the very day the bill was signed into law, bought a yacht with an estimated cost of $5 million with a loan from a foreign owned bank that had lobbied Congress for tax reform and had spent $340,000 lobbying politicians for this reform.
Buchanan is one of the richest men in Congress, with a 2018 estimated wealth of $74 million. The Center for American Progress estimated that because of Trump’s tax bill, in 2018 Buchanan saved $2.1 million on his tax bill.
Trump has made a pledge that if elected, on Nov. 3 he will permanently eliminate payroll taxes. Payroll taxes generate $90 billion a month, roughly $1 trillion a year, to fund the two Social Security trust funds — one for disability social security and one for old age and survivors benefits. Social Security actuary Stephen Goss estimates that if the legislation which Trump promises is enacted, with no alternative source of revenue, the disability trust fund would be depleted and no benefits payable after mid year 2021 and the Social Security trust fund would be depleted mid calendar year 2023.
So now, three years after the passage of this tax bill, we are facing an uncontrolled pandemic, in part because of Trump, tens of thousands dead, and an economy that is in freefall. His solution to this upcoming financial crisis is not to close the loopholes and the tax avoidance schemes that his tax law opened up to the rich, but rather take social security benefits from those who can least afford to lose them.
Since 1935, 13 former presidents have managed to provide the security of disability, old age and survivor benefits to American families. For Trump to jeopardize this valuable protection would be criminal.