The tax reform bill is facing a possible Senate vote this week, and President Trump recently finished pitching for the reform in Missouri, talking about a “merry Christmas” for taxpayers this year.
The President is known for making reportedly baseless accusations against the media, specific media personalities and top government officials. He’s also known for stretching the truth and distorting it beyond recognition at times.
So, how much of what he said during the speech in Missouri are actually true?
What he said about creating jobs:
“We’ve created nearly 2 million jobs. Think of it. We used to lose millions. Now we’ve created 2 million jobs since I won the election.”
We didn’t “used to lose millions,” as claimed by Trump. The most recent data, from 2016, shows that the February to October average job additions was 199,000 per month. During the same period this year – Trump’s term so far, basically – job additions only averaged 169,000 per month. For the nine-month period in question, that’s 1,521,000 (1.5 million) in 2017 vs. 1,791,000 (1.8 million) when Obama was serving his final year as President.
What he said about the GDP:
“The Commerce Department announced this morning that our GDP, that’s the big one, in the third quarter, grew even faster than they reported previously. Now it comes in at 3.3 percent, which is the largest increase in many years. And if we didn’t have the hurricanes, we would have been at 4 percent.”
The part about the third quarter GDP growing faster than the same period a year ago is true. However, the hurricanes are more likely to have improved GDP because the ports were closed, likely slowing down imports during the affected months. In fact, GDP for the fourth quarter could come in much lower, at 2.5%, according to Macroeconomic Advisers. What will Trump say about that if it happens?
What he said about the proposed tax reform:
“Our focus is on helping the folks who work in the mailrooms and the machine shops of America. The plumbers, the carpenters, the cops, the teachers, the truck drivers, the pipe fitters. The people that like me best.”
Pulls at your heartstrings, doesn’t it? Well, the truth is, there are some up-front benefits for the lower income groups that will effectively “expire” during the 10-year period following the tax reform, if it passes into law. As early as in 2019, only 20% of the benefits actually go to taxpayers making less than $87,400 a year. In 2025, these same folks are going to be hit by tax cuts expiring. What’s worse, by 2027, people making below $54,700 will be paying more taxes. This analysis was done by a nonpartisan group called the Tax Policy Center.
What he said about rich people:
“This is going to cost me a fortune, this thing, believe me. This is not good for me. I have some very wealthy friends, not so happy with me. But that’s OK.”
Aside from the fact that flaunting his wealth in front of the public is in poor taste, what he said is nowhere near the truth. High income earners like wealthy businessmen stand to gain the most from the GOP bill. Lowering taxes on pass-through companies and cutting the corporate tax rate from the current 35% down to 20% would benefit employers rather than the people that work for them. The Tax Policy Center shows clearly that up to 88% of the tax savings in 2019 will go to people making more than $150,100 a year, which are the top 20% earners in the country. The old 80-20 rule rearing its head?
Trump’s claims on the job market, GDP growth and the proposed tax reform during his speech in Missouri are clearly not borne out by facts. But then, not many of his other claims in the past were, either.
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