Donald Trump’s State of the Union speech continued Trump’s tradtion of telling tall tales. Let’s separate Trump’s fake news from the facts.
We enacted the biggest tax cuts and reforms in American history. Our massive tax cuts provide tremendous relief for the middle class and small businesses.
A typical family of four making $75,000 will see their tax bill reduced by $2,000 – slashing their tax bill in half.
This April will be the last time you ever file under the old broken system – and millions of Americans will have more take-home pay starting next month.
The tax cut signed into law last month is not the largest in American history, but the eighth largest, at about 0.9% of the gross domestic product. In 1981, Ronald Reagan signed the largest cut, at 2.89% of GDP.
The $1.1tn tax cut will mean lower taxes for every income bracket in 2019, but it is misleading to suggest that those cuts will last for everyone.
Over time the cuts disproportionately save money for the wealthiest. Some of the tax cuts phase out in 2025, meaning that by 2027 Americans earning less than $75,000 will see tax increases. More than 75% of the savings will go to people who earn more than $200,000, according to Moody’s, or about 5% of taxpayers.
The top 1% of earners will save hundreds of thousands of dollars, if not millions, through the cuts, according to the Tax Policy Center. The president’s family could save as much as $11m, according to an analysis by the New York Times. The tax plan also eliminated the estate tax, which only affected a few thousand families with extraordinary wealth.
The stock market
Small business confidence is at an all-time high. The stock market has smashed one record after another, gaining $8tn in value. That is great news for Americans’ 401k, retirement, pension, and college savings accounts.
It’s true that the stock market is booming: the Dow Jones surpassed a record 26,000 points and saw its fastest-ever 1,000-point gain during the last year.
The stock market is not the economy, however, and does not reflect marginal wage gains and growing inequality. A Federal Reserve report published last year, for instance, found that the wealthiest 1% of American families controlled 38.6% of the country’s wealth in 2016.
Coal, energy and cars
We have ended the war on American energy – and we have ended the war on clean coal. We are now an exporter of energy to the world.
Thanks to a natural gas boom over the last 15 years, the US has become a global energy power. This success of natural gas – cheaper, more accessible and cleaner than coal – has marginalized the coal industry, limiting Trump’s efforts to save the industry.
Coal jobs and production declined for decades, collapsing 33% from 2011 to 2016, according to studies by Columbia University and the Department of Energy, due to competition from natural gas, automation and a shift away from coal in Asia.
Trump has tried to resurrect coal’s fading fortunes. He rescinded a rule that tried to keep coal mining waste out of waterways; ordered a revocation of Obama’s Clean Power Plan; and lifted a ban on mining leases on federal land. In 2017, coal exports increased compared to 2016, according to the Energy Information Association. Still, there has only been about 1% growth in coal jobs over the last year, according to the Bureau of Labor Statistics.
The phrase “clean coal,” coined by the coal industry, is itself controversial. The term applies not to any coal itself but power plants that remove heavy metal pollutants in the burning process and bury carbon emissions in the earth. Even such “clean” coal-fired plants still emit large levels of pollutants.
Many car companies are now building and expanding plants in the United States – something we have not seen for decades. Chrysler is moving a major plant from Mexico to Michigan; Toyota and Mazda are opening up a plant in Alabama. Soon, plants will be opening up all over the country. This is all news Americans are unaccustomed to hearing – for many years, companies and jobs were only leaving us.
Chrysler is not moving any plant from Mexico; it is keeping the Mexican factory and investing in a Michigan one. Toyota-Mazda have planned for a $1.6bn factory in Alabama, to open in several years. Several of the plans Trump is touting have been in development for several years and the US has steadily increased jobs since 2010, according to the same Bureau of Labor Statistics figures the president earlier cited.
Read the complete article on The Guardian newspaper web site.