Welcome to the Disaster After the Tax Bill

By Robbie Hunter
President, State Building and Construction Trades Council


Dec. 19, 2017 -- Welcome to the new Gilded Age, where the inheritors of wealth will inherit more, where the 1 percent will grab a bigger piece of the national economic pie, where companies out to crush unions will thrive and have every law in their favor like never before, and where the earned benefits that have provided working people with a late-in-life cushion against poverty will soon disappear.

Just look around. There are virtually no companies in America where workers not represented by a union get paid a pension. Not satisfied with this decimation of the private pension system, Republicans have now targeted Social Security and Medicare. It’s the only way they know how to pay for the tax cuts they are giving to the 1 percent. Believe me, it is coming.

At the onset of the Gilded Age of the 19th century, robber barons and oligarchs ruled the economy while blue-collar workers suffered and died on the job. Workers’ pay was so low they were forced to rely on the labor of their children to put food on the table. There was no public education, no retirement, no opportunity. When you stopped working, you had to die.

A “free market” economy reigned, and the bosses who made the rules and wrote the laws did everything in their power and the government’s power—which they totally controlled—to destroy workers’ efforts to organize unions.

We’re headed in that direction again under the tax bill favored by a Republican Congress and a Republican President. In time, our public education system will only be a symbol of a false promise. Opportunity will be denied to the 99 percent while the golden 1 percent skims away the riches of the nation.

It’s a tax bill that gives a lie to the idea that this administration ever had working-class America in mind when the Republican standard-bearers spun the fake populist rhetoric that elevated them to power. In recent months, they sold the tax bill as a tax cut for the middle class, but that was another lie: These gilded water carriers knew the minimal benefit the tax bill bestows on the masses will expire in just a few years. Yet they severely limited the ability of working people to write off state and local taxes and mortgage interest on their homes, thereby increasing their taxes.  At the same time, lower corporate tax rates have been written into into perpetuity, while the rich will cash in hugely with changes to the estate tax and on business income that will benefit them exclusively.

U.S. Rep. Chris Collins, a Republican who represents the suburbs of Buffalo, N.Y., told you everything you need to know about this tax legislation. In the run-up to the Congressional vote, a reporter from “The Hill” caught this quote from him: “My donors are basically saying, ‘Get it done or don’t ever call me again.’”

We probably should thank the Congressman for this admission about who pulls his strings. When it came to his vote in favor of the tax legislation, it certainly wasn’t the people who live within his 27th Congressional District. Their median family household income is $62,698, and it doesn’t come close to the retained wealth of the donors to whom Collins answers. They are the true beneficiaries of the most extreme tax bill in the history of this country.

As representatives of 450,000 union construction worker and apprentices, we at the State Building and Construction Trades Council found the 10th-ranked contributor on Collins’s list as compiled by OpenSecrets.org to be very interesting.

Right in there below the credit unions and National Park concessionaires but above the telecommunications giants and beer wholesalers, car dealers and cable television companies is the Associated Builders & Contractors. They are the anti-construction-union, anti-prevailing wage voice in the construction industry. They weighed in with $22,500 in contributions over the past 20 years—more than enough to ask Collins to “get it done” if he wants them to call him back with more loot.

The ABC we know is a collection of building companies whose primary purpose is to keep wages as low as possible in the construction industry. You already know where they stand on the issues that are important to us. They are against Project Labor Agreements. More than anything else, they are anti-union.

Add it all up and what they want is to pay construction workers less so they can pay themselves more.

Collins worked hard to get the tax bill done for the ABC, and now its membership stands to rake in billions of dollars in coming years. They are probably happiest with the bill’s increase on the deduction written into the law for “pass-through” businesses, the kind that are prevalent in the construction industry. Money flows into the company. It is extracted by the individual, but taxed at the lower, corporate rate that the business enjoys.

When it comes to their workers, however, don’t expect to see much of a “pass-through” in this windfall that the ABC and other such companies are about to receive. It’s not what they’re about. Every penny they save on taxes will go into their pockets—not toward job creation, and not towards higher wages.

Make no mistake, congressional Republicans did not write this bill for you.

The Tax Policy Center in Washington, D.C., estimates that some 22 million households ultimately will experience a tax increase, the vast majority of them with incomes below $200,000 a year.

Meanwhile, the wealthy and the super-wealthy will benefit from lower corporate rates, higher “pass-through” deductions and changes to the estate tax that will double the threshold value of their holdings from $5.5 million to $11 million before they have to pay any tax. How many of you expect to have assets in excess of $11 million to leave to your kids?

It sounds to us like class warfare, by representatives of the moneyed donors who give campaign money to Collins and the Republicans, being waged on people like our members who work hard and survive paycheck to paycheck.

For 30 years, we’ve seen “pass-through” business elites take advantage of rules that have allowed them to skirt payroll taxes. As a result, the federal treasury lost $100 billion in 2011 alone, according to a recent study by the Brookings Institution, in revenues that should have been set aside to secure the Social Security and Medicare trust funds.

With the new tax bill, the war on working families will intensify. Pretty much all objective analysts agree that the legislation will cost the federal treasury $1 trillion over the next decade and trillions more in decades to come. This is what conservatives call “starving the beast,” which is what they call the New Deal, the Great Society, Social Security and Medicare.

President Donald J. Trump promised when he ran on a “populist” campaign that he would protect these programs that are absolutely critical to middle-class Americans, if they want to enjoy any sort of quality of life when they get old. Eleven months into his presidency, we are still waiting for him to reaffirm his support for Social Security and Medicare. He will have some explaining to do to the working people of this country if he sells them out in his pursuit of tax relief for people who don’t need it.

It is a tax policy that will add trillions of dollars to the national debt, to be paid for by future generations of working people who will see education, housing, transportation and other programs that benefit them get the axe.

This is the exact opposite of populism, and it is the reason that the labor movement needs to intensify its efforts to fight for working people, to organize, to demonstrate that the best future for this nation and for working people rests with good-paying jobs that can be achieved through the one thing that we know works best for them: unionization.

We’ll have more on that next month.


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