‘A big giveaway to stockholders’: Paul Krugman argues the GOP’s tax scam is making ‘America as a whole poorer’ | Alternet
He also pointed out that even if the theory about the economic benefits were true, it would entail that the United States’ trade deficits would drastically increase. Trump, of course, has consistently bemoaned the existence of trade deficits, viewing them as evidence that the country is getting ripped off. The president has never made clear why he backed a tax cut based on a theory that so directly contradicts his stated view of trade deficits — but the most obvious answer is that he has no idea what he’s talking about.
Without a significant increase in capital inflows, the basic theory of why the tax cuts were a good idea falls apart. The knock-on benefits of a wave of growth-inducing investment is proving elusive — so what we’re left with is a massive payout to the wealthy, corporations, and stockholders, while U.S. government revenues take the hit and the federal deficit rises.
And since 35 percent of stockholders in American businesses are foreigners, Krugman explains, much of the lost revenue is being taken from the U.S. government and put in the pockets of overseas investors. Hardly what anyone would think of when they imagine an “America first” tax policy.