Feb 22, 2018

MEMO | Ongoing Efforts to Obscure Benefits of Tax Reform Distort the Facts

Post by Freedom Partners

In the wake of Congress passing sweeping tax reform legislation that increases the competitiveness of American companies, leading to more jobs and better wages for American workers, Democrats like Missouri Senator Claire McCaskill have adopted an almost perverse strategy of highlighting real stories of economic hardship and dubiously linking them to tax reform. “Working people in Missouri deserve better than to get scraps,” claimed McCaskill in trying to justify her opposition.

As the rush of good news about higher paychecks, unexpected bonuses, and more jobs keeps breaking, though, Democrats are getting more and more desperate to convince Americans that despite all the positive news they’re seeing, the middle class is being ravaged by tax reform. “[T]he tax bill … [is] making it worse for Wisconsinites,” claims Wisconsin Senator Tammy Baldwin. North Dakota Senator Heidi Heitkamp argues that the law raises taxes on the middle class. And Ohio Senator Sherrod Brown drolly recasts the legislation as the “Cut Jobs Act.”

They couldn’t be more wrong. But having staked their reputations on the failure of a law that’s producing real results, Democrats are now resorting to misleading the public about the true impact of tax reform.


Following in the footsteps of Senate Minority Leader Chuck Schumer and House Minority Leader Nancy Pelosi, Democrats are waging a no-holds-barred campaign to downplay the obvious benefits of tax reform for working Americans and to convince them that the legislation is the root of all (economic) evil.

As The Hill writes, “Democrats worried the GOP tax-cut law is getting good press are working hard to undermine any positive feelings about the overhaul and prevent them becoming engrained with the public.” And an essential part of that playbook is to drum up outrage that a month-old law hasn’t yet done enough to reverse the fortunes of employers who have been struggling against economic and business headwinds for years.

True to form, in late January – just one month after the tax reform bill was signed into law – Senate Minority Leader Chuck Schumer tweeted that “big corporations are NOT turning their new tax cut into jobs for the middle class.” “Let’s pay attention to the whole picture,” echoed Senator McCaskill while touting an article proclaiming that “[a]s retailers herald tax savings, they’re still closing stores and laying off workers”. Toys R Us, Sears, and Macy’s all made the list.

What McCaskill and Democrats conveniently leave out, though, is the context around these closures. Toys R Us, for example, filed for bankruptcy in September and hasn’t reported an annual profit in five years. Sales at Sears have declined for six straight years. And profits at Macy’s have dropped by nearly half in the past three years. Even Sam’s Club, whose owner Walmart has long been a prop for liberal grandstanding, has struggled to keep pace with rival Costco.

The fact is, Democrats like McCaskill don’t want Americans to “pay attention to the whole picture” so they can pretend that these layoffs that have been years in the making are evidence that tax reform is failing. Democrats are now blustering over the loss of jobs and desperately trying to place the blame on tax reform, a stark contrast to their silence when hundreds of thousands of the country’s most vulnerable workers saw their work hours cut or capped due to Obamacare.

In reality, because of tax reform, businesses are now more optimistic than ever and are beginning to invest in new plants, equipment, and factory upgrades that will mean more jobs and higher wages for American workers well into the future – an outcome that would not have been possible if Democrats had succeeded in keeping the American tax rate on businesses the highest in the developed world.


The ultimate thrust of the Schumer-led offensive is to convince the American public that “it’s not the middle class” that benefits from tax reform, a message that Democrats have been all too eager to parrot. Senator McCaskill followed up by ominously sharing an article positing that “[f]ew U.S. adults report bonuses, raises from Republican tax law.” Never mind that the law took effect on January 1st and the poll on which the article is based began a scant 11 days later.

Despite the short time since tax reform was signed into law, businesses of all sizes have already announced very real, impactful benefits for American workers. Starbucks has announced pay raises and increased benefits for 150,000 employees. JPMorgan Chase is increasing wages for 22,000 workers. Lowe’s is awarding bonuses of up to $1,000 to more than 260,000 employees and expanding benefits for full-time workers. And in McCaskill’s own state of Missouri, Kansas City-based Hostess is providing its employees payments of $1,250 in addition to a year’s worth of free snacks.

Democrats like Schumer, Donnelly, McCaskill and others are minimizing – or willfully ignoring – these bonuses, wage hikes, and investments because they know if they had their way, these benefits would have never existed. Since that poll, more than 130 companies have announced more bonuses, wage hikes, and new investments. Apple alone said it would be paying out $2,500 stock bonuses, is planning $30 billion in capital expenditures over five years, adding 20,000 employees, and estimates a $350 billion contribution to the U.S. economy.

And, we haven’t even scratched the surface of the individual and family tax cuts, which includes significant reductions in every bracket, which according to an estimate from the liberal Tax Policy Center will mean 80 percent of all Americans will keep more of their hard earned money.


There’s no denying the clear benefits of tax reform and the ripple effect it’s having on the entire U.S. economy. There’s also no defending standing in its way. As Americans start to look at the whole picture, they are going to find that the fearmongering from Chuck Schumer and Nancy Pelosi – who likened tax reform to the end of the world – will become increasingly disconnected from reality. And the excuses from the Democrats who followed them in opposition will be even more desperate and disingenuous.

Alan Nguyen
Senior Policy Adviser
Freedom Partners Chamber of Commerce