You can tell by the amount of spin that the Trump tax cut will not work out well for the remaining middle class Americans.
As the President marched out families who would benefit with lower tax bills if the bill is passed, I said to a colleague that we are screwed big time by this based on the dog and pony show we were watching.
A 21 percent corporate tax rate is beyond ridiculous, when you think about how well their balance sheets are positioned after 10 years of very low-interest rates. The cheap money allowed these firms to borrow billions in stock buybacks.
If you live in a blue state — despite who you voted for — then the loss of deductions with the small top-end tax rate cut will result in a higher bill for upper middle class families.
You can’t say a family of four in New York making $150,000 a year is rich. But in this tax bill these are the people who will fund some of the corporate welfare under the present bill.
The one huge result of this bill will be the Dow Jones index soaring as corporate buybacks will soar with the lower corporate tax rate.
Since these consumer-directed companies will not be able to grow revenue because middle class families will have less discretionary income to purchase products, the only way these companies can push their stock price up is through buybacks.
The thought of increasing hiring with the new-found corporate welfare is a farce and part of the spin. Will Jamie Dimon hire more bank tellers for JPMorgan under this bill?
Absolutely not. There is no economic reason for Dimon to do that.
Let’s see what happens in the next week or so, but this tax cut bill is anything but for America’s struggling and shrinking middle class America. Just look at the spin.