Trump’s signature legislation: A transfer of wealth to the richest Americans

By ALLAN HOLMES/Editor, Center for Public Integrity/USA// Voters will head to the polls in just 46 days, delivering a referendum on President Donald Trump.

The signature legislative achievement of Trump’s first term was the Tax Cuts and Jobs Act of 2017, which, he has claimed, boosted workers’ wages and created jobs. Critics say it was mostly a huge transfer of wealth to the richest Americans.

In The Heist, a five-episode podcast that launched this week, the Center for Public Integrity digs deep into the tax-cuts law to show who benefited. The podcast is based on a two-year Public Integrity investigation; an episode will be posted every Thursday through Oct. 15.

This week, we introduced podcast subscribers to an influential Republican donor who explains how he withheld campaign donations to goad the Republican-controlled Congress to pass the law, which slashed tax rates for corporations and the wealthy.

“I said ‘Hey, I don’t see any movement on … tax reform,’” said Doug Deason, whose father, Darwin, made a fortune by selling a computer-services company he later sold to Xerox Corp.. “We’re gonna hold back money. We’re canceling fundraisers that we’re doing for some of these politicians.”

“My donors are basically saying: ‘Get it done or don’t ever call me again,’” Rep. Chris Collins, R-New York, said as Congress was debating the tax-cuts bill. (Collins was convicted this year of insider trading and sentenced to more than two years in prison.)

Deason revealed, in unusually candid fashion, how Washington really works.

Donor Doug Deason withheld giving to Republican candidates and political committees until the GOP-controlled Congress was close to passing a tax-cuts bill. (Brandon Wade/AP Images for T.D. Jakes Ministries)

“The most surprising aspect of it is that essentially the quiet part got said out loud,” said Eric Shickler, a professor who teaches American politics at the University of California at Berkeley. “That’s just not something that’s usually done. And here it is, at least to some extent, being done right in front of us.”

The point man on Trump’s tax bill was his secretary of the treasury, Steve Mnuchin, who is profiled in the second episode of The Heist.

He followed his father, Robert, to the investment firm Goldman Sachs and later started a hedge fund. With other investors, Mnuchin bought a bank that failed during the 2008 financial crisis and then foreclosed on thousands of mortgages.

Mnuchin became Trump’s campaign finance manager when it was clear Trump would get the Republican nomination for president in 2016. Asked by friends why he signed up with Trump, Mnuchin “said something like, ‘Well, this is a bet, and if I win, I’m going to get a really big prize,” said David Dayen, executive editor of the left-leaning American Prospect and author of a biography on Mnuchin.

In Episode 3, Public Integrity investigates the tax bill’s quick trip through Congress and how the Trump administration claimed the tax cuts would pay for themselves. They didn’t.

Adding $1.5 trillion to the nation’s deficit initially was a sore point for Sen. Bob Corker, a Republican from Tennessee who retired in 2018. Public Integrity examines how Corker, a fiscal conservative, switched positions and chose not to derail the tax bill.

In Episode 4, Public Integrity exposes the fallacy of Republicans’ promises that the law would raise wages and create jobs. We look at American Airlines, which received massive tax breaks but used most of the savings to buy back shares and raise its stock price.

The podcast concludes with an episode showing that loans made through the Paycheck Protection Program, passed by Congress to blunt the effects of the COVID-19 pandemic, went first to the politically well-connected and the wealthy.

“It’s pretty clear that the [loan] process was run in a way that pushed needy small businesses to the back of the line while prioritizing the influential,” said Matthew Gardner, a senior fellow at the nonprofit, non-partisan Institute on Taxation and Economic Policy.

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