FACT CHECK: President Trump’s Tax Speech In Missouri
Wednesday, November 29, 2017
President Trump traveled to St. Charles, Mo., on Wednesday to promote the GOP tax plan now facing a possible vote in the Senate by the end of the week. He also spoke more generally about his record during his first year in office. "I will tell you this in a non-braggadocious way," Trump said. "There has never been a 10-month president that has accomplished what we have accomplished."
Here's a closer look at some of the president's claims.
CLAIM: The GOP tax plan is primarily aimed at workers on the lower rungs of the income ladder.
"Our focus is on helping the folks who work in the mailrooms and the machine shops of America," Trump said. "The plumbers, the carpenters, the cops, the teachers, the truck drivers, the pipe fitters. The people that like me best."
Some elements of the GOP plan would benefit such workers, including a larger standard deduction and an expanded child tax credit. But blue-collar workers are hardly the bill's main focus. According to the nonpartisan Tax Policy Center, less than 20 percent of the total tax savings in 2019 would go to workers making $87,400 or less (the bottom 60 percent of the income distribution). These workers fare even worse after 2025, when the individual tax cuts in the Senate bill are set to expire. By 2027, people making less than $54,700 would see a tax increase under the Senate bill, while those making between $54,700 and $93,200 would see a modest cut, accounting for less than 3 percent of the bill's total tax savings.
CLAIM: The GOP tax plan is hard on rich people, like President Trump.
"This is going to cost me a fortune, this thing, believe me. This is not good for me," Trump said. "I have some very wealthy friends, not so happy with me. But that's OK."
Upper-income taxpayers would be the biggest beneficiaries of the GOP plans to reduce the corporate tax rate to 20 percent from 35 percent and to lower taxes on so-called pass-through companies, which are taxed at the individual rate. They would also benefit from elimination of the alternative minimum tax and their heirs would benefit from a higher threshold on the inheritance tax. According to the Tax Policy Center, 63 percent of the total savings from the Senate bill in 2019 would go to taxpayers earning more than $150,100 (the top 20 percent of earners), while nearly a quarter would go to the top 5 percent — people making upwards of $303,200.
Top earners do even better after 2025, when the individual tax cuts expire but other provisions continue. By 2027, 90 percent of the total tax savings go to people making more than $154,900 (the top 20 percent of earners) and nearly 62 percent go to the top 1 percent — people making more than $912,100.
CLAIM: Job growth has surged under President Trump.
"We've created nearly 2 million jobs," Trump said. "Think of it. We used to lose millions. Now we've created 2 million jobs since I won the election."
The U.S. job market continues to improve, with unemployment in October falling to its lowest level in 17 years. (November job numbers will be out next week.) Since February — Trump's first full month in office — U.S. employers have added an average of 169,000 jobs each month. This is slightly below the pace of 199,000 jobs per month during the comparable period in 2016.
CLAIM: Economic growth has surged under President Trump.
"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," Trump said. "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."
Gross domestic product, or GDP, is the broadest estimate of the U.S. economy, and the Commerce Department did say Wednesday that GDP grew at 3.3 percent between July and September — an upward revision from the department's earlier estimate. The last time GDP grew that rapidly was in 2014. Forecasters anticipate somewhat slower growth in the last three months of the year. Macroeconomic Advisers, for example, is predicting fourth-quarter growth of 2.5 percent.
Analysts originally expected that a spate of hurricanes would temporarily depress growth in the third quarter, but that didn't happen. In fact, by closing ports, the storms may have slowed imports and temporarily boosted GDP.
CLAIM: Speaking of hurricanes ...
President Trump acknowledged that Puerto Rico has not bounced back as quickly from storm damage as Texas and Florida.
"Puerto Rico has been a very tough situation because of the fact that it was in very, very bad shape before the storms ever hit," the president said. "But they're doing well there and it's healing and it's getting better. And we're getting them power and all of the things they have to have."
Conditions in Puerto Rico have slowly improved since Hurricane Maria struck more than two months ago. But 38 percent of the island still lacks electricity and nearly 8 percent is without reliable drinking water.
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