NEW Center for Public Integrity Report: “Republicans Passed Tax Cuts — Then Profited”

Center for Public Integrity: The Republican Tax Law “Is a Case Study of How Lawmakers Can Make Themselves Richer With the Bills They Pass”

A new report from the Center for Public Integrity published today shows that Senate Republicans weren’t just rewarding their wealthy special interest donors when they passed the GOP tax law in 2017 — they were also lining their own pockets.

The scathing analysis lays out how Republicans in Washington crafted a corporate tax giveaway with key provisions that could help them personally profit from the new tax system. It specifically identifies David Perdue as a wealthy member of the Senate who appeared to profit in the aftermath of helping pass a reckless tax law that is exploding the federal deficit, putting Medicare and Social Security at risk, failing to live up to its promises, and remains deeply unpopular with voters.

IN CASE YOU MISSED IT

Vox/Center for Public Integrity: How Republicans made millions on the tax cuts they pushed through Congress

By Peter Cary

January 24, 2020

Key Points:

• When the price of Apple stock hit a then-record high in October 2018, among the shareholders counting their gains were 43 Republicans in Congress, who collectively owned as much as $1.5 million worth of the tech giant’s shares.

• But congressional Republicans themselves had a hand in the spike, stock analysts say. Legislation they championed — the 2017 Tax Cuts and Jobs Act — doled out nearly $150 billion in corporate tax savings last year alone. One effect: a big boost in stock prices.

• Cutting tax rates for companies like Apple and hundreds of other stocks they own was one of many ways Republican lawmakers enriched themselves after they passed the tax law, according to a Center for Public Integrity analysis of the 186-page law and members’ financial disclosure forms.

• As part of the bill, Republicans approved tax breaks in 2017 for seven classes of assets many of the wealthier members of Congress held at the time, including partnerships, small corporations, real estate, and several esoteric investment vehicles.

• While they sold the bill as a package of business and middle-class tax cuts that would not help the wealthy, the cuts likely saved members of Congress hundreds of thousands of dollars in taxes collectively, while the corporate tax cut hiked the value of their holdings.

• “It feels to me like a kleptocracy,” said Jeff Hauser, director of the Revolving Door Project at the Center for Economic and Policy Research…

• Two years after the passage of the Trump tax act, its effects — some obvious, some hidden — are coming into focus. One is its cost: Contrary to Republican claims, the law is not paying for itself and is likely to burden the nation with an additional $1.9 trillion in debt over 11 years beginning in 2018, according to the Congressional Budget Office.

• And… some of its tax benefits overtly favored the wealthy, such as the 2.6 percentage point tax rate cut in the highest bracket and the doubling of the estate tax exemption to $11.2 million. Other provisions were subtler yet favored the wealthy even more: tax breaks for their investments, for instance, or changes that boosted the value of their stocks.

• Perdue is one of the wealthiest senators, with a net worth of $15.8 million, $14 million of which is in stocks, according to Roll Call. In 2018, with his wife, Perdue owned $100,000 to $250,000 in Apple stock, he reported. The couple sold some of it and received annual dividends and capital gains that year between $15,000 and $50,000.

• The optics that the tax cuts would boost the prices of stock he owned apparently didn’t concern Perdue.

• Weeks before Republicans passed the tax bill, Fox News host Maria Bartiromo asked Perdue if he was worried that the corporate cuts would result in buybacks and increased dividends instead of new jobs. “Well, Maria,” he answered, “I come from the school that, you know, all of the above is acceptable. This is capitalism.”

Read the full report here.

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