A majority of Americans believe the Republican tax bill disproportionately benefits corporations and the wealthy — and expert analyses back up this perception — but despite President Donald Trump’s “America First” policies, foreign investors are getting one of the largest tax breaks.
According to an analysis by the Institute on Taxation and Economic Policy, investors from other countries will see $48 billion in tax cuts in 2019. Compare that to only $25 billion in tax cuts for the middle 20 percent of earners and just $16 billion across the poorest 40 percent of Americans. Meanwhile, the richest 1 percent are looking at a $85 billion tax cut in 2019.
In total, only the richest fifth of Americans will see more benefits from the tax bill than foreign investors, the Institute found. These investors — as well as the richest Americans — will also benefit from the 14 percentage-point corporate income tax reduction. This is because, according to the Institute, while many middle-class earners own some corporate shares, a majority are owned by higher-income Americans and foreign investors.
Research from the Tax Policy Center found that 35 percent of stocks in American corporations are owned by foreign investors.
“U.S. tax reform may inevitably allow incidental benefits to foreigners,” the Tax Policy Center noted. “But the windfall to foreigners from lowering U.S. corporate income tax rates from 35 percent to 20 percent is exceptionally large. As estimated here, a lower corporate income tax rate would benefit foreign investors by $70 billion in the first year alone.”
The White House and GOP lawmakers celebrated the passing of the controversial tax bill in both houses of the legislature this week.
“It’s always a lot of fun when you win,” Trump said Wednesday.