By Shahar Ziv
The U.S. could afford to give every working adult $1,875 stimulus checks for eight months for the same cost as the tax cuts that Trump passed in 2017, argued Robert Reich. Reich, the Secretary of Labor under Bill Clinton and author of the forthcoming book, “The System: Who Rigged It, How We Fix It”, tweeted the comparison saying “it’s a question of priorities” for the country. His comments come after Senate Republicans blocked at least four votes that would have increased the size of stimulus check payments from $600 to $2,000.
McConnell Blocked $2,000 Stimulus Check Votes
Reich’s comments were an implicit rebuke to remarks made by Senate Majority Leader Mitch McConnell (R-Kentucky) who blocked attempt after attempt to unanimously approve a House-passed bill that would have increased stimulus payments to $2,000. McConnell had called the effort to augment stimulus checks “socialism for rich people.”
“Borrowing from our grandkids to do socialism for rich people is a terrible way to get help to families who actually need it,” McConnell speciously argued.
Reich essentially subtweeted McConnell, saying that “Trump’s tax cuts for the wealthy and corporations will cost $2.3 trillion over ten years. For the same cost, we could afford to give every American $1875 checks for the next 8 months.” His criticism of McConnell’s dubious claims reinforced the argument that Senator Bernie Sanders (I-Vermont) had assiduously made on the Senate floor last week.
In response to McConnell’s “socialism for the rich” claim, which he repeated four times during one Senate floor speech, Sanders replied, “the majority leader helped lead this body to pass Trump’s tax bill. You want to talk about socialism for the rich Mr. Majority Leader?!”
Trump Tax Cuts Will Cost Americans $2.3 Trillion Over 10 Years
Reich and Sanders are not wrong. The tax cuts passed by President Trump and a Republican Congress in 2017 have added trillions to the deficit; there was no concern voiced about grandkids and their future when the bill was being debated.
Despite Treasury Secretary Steve Mnuchin’s famous claim that “not only will this tax plan pay for itself but it will pay down debt,” his own department’s analysts recently pegged “the 10-year cost at $2.3 trillion given the administration’s assumption that tax breaks for individuals and large estates will be extended past 2025.”
Moreover, the tax cuts were and continue to be heavily skewed towards the rich. In 2018, households earning $1 million or more received roughly 16.5 percent of the total tax cut benefit, despite only being 0.4 percent of all tax filers, according to the Congressional Budget Office (CBO). By 2027, those million dollar or more households are projected to be 0.6 percent of all tax filers, but would get a staggering 81.8 percent of the total benefit from the tax cut bill.
“Meanwhile, the top 1 percent will get a gigantic tax cut. The Tax Policy Center estimates that the current plan will save the bottom 80 percent between $50 and $450 in taxes per year, but that it saves each person in the top 1 percent an average of $129,000 a year,” he added.
In other words, socialism for the rich.
Had we not thrown over $2 trillion out of the national piggy bank and into corporate coffers, the country would be in a stronger position to support hard-working Americans who are still struggling to make ends meet months into the coronavirus pandemic.
To complain about “borrowing from our grandkids” in the context of stimulus checks, but not in the context of a $2 trillion-plus tax cut is pure hypocrisy. Let’s also not forget about the tax cuts that Republicans sneaked into the Cares Act that provided 43,000 millionaires with a $1.7 million windfall each.
Reich’s Stimulus Check Calculation
Reich suggests that instead of the tax cuts that cost taxpayers trillions, the government could give a $1,875 stimulus check for eight months, which is the equivalent of a $15,000 aggregate payment per person.
Given the $2.3 trillion cost he is using as a comparison, this would equate to giving stimulus checks to roughly 153 million people.
Reich clarified via e-mail that he was using “working adults” in his calculation. While 153 million people may not directly equate to “every American” – the U.S. population was roughly 331 million people in 2020 – it does roughly square with 160 million economic impact payments that were sent following passage of the Cares Act. If we were to use a higher figure, like 331 million people, the stimulus check amount would slightly decrease, but the underlying argument would still hold.
Reich’s rebuttal of McConnell’s ridiculous claim that $2,000 stimulus checks are “socialism for the rich,” is spot on. While the majority leader succeeded in blocking the vote on stimulus checks at the end of the 116th Congress, the question for the 117th Congress along with President Biden will be simple: what are your priorities?
Published originally on January 4, 2021 by Forbes.
To see original article please visit: https://www.forbes.com/sites/shaharziv/2021/01/04/giving-1875-stimulus-checks-for-8-months-would-cost-same-as-2017-trump-tax-cuts-says-robert-reich/