Perspective:
Crumbs for the hungry, windfalls for the rich»
While President Donald Trump and his allies in Congress seek to tighten access to food stamps, they are showing compassion for one group: zillionaires. Their economic rescue package quietly allocated $135 billion for the likes of wealthy real estate developers.
My Times colleague Jesse Drucker notes that Trump himself, along with his son-in-law, Jared Kushner, may benefit financially from this provision. The fine print was mysteriously slipped into the March economic relief package, even though it has nothing to do with the coronavirus and offers retroactive tax breaks for periods long before COVID-19 arrived.
Sen. Sheldon Whitehouse of Rhode Island and Rep. Lloyd Doggett of Texas, both Democrats, have asked the Trump administration for any communications that illuminate how this provision sneaked into the 880-page bill. (Officially, the provision is called “Modification of Limitation on Losses for Taxpayers Other Than Corporations,” but that’s camouflage; I prefer to call it the “Zillionaire Giveaway.”)
About 82% of the giveaway goes to those earning more than $1 million a year, according to Congress’ Joint Committee on Taxation. Of those beneficiaries, the average benefit is $1.6 million.
In other words, a single mom juggling two jobs gets a maximum $1,200 stimulus check — and then pays taxes so that a real estate mogul can receive $1.6 million. This is dog-eat-dog capitalism for struggling workers and socialism for the rich.
The United States simply accepted that the pandemic would cause vast numbers of workers to be laid off — and then it provided unemployment benefits. But Germany, France, Britain, Denmark and other countries took the smarter path of paying companies to keep workers on their payrolls, thus preventing layoffs in the first place. The United States did a little bit of this, but far less than Europe — yet the United States in some cases spent a larger share of gross domestic product on the bailout than Europe did.
So the unemployment rate in Germany and Denmark is forecast to reach about 5%, while in the United States it may already be about 20%, depending on how you count it.
At the same time, it has become increasingly clear that money intended to rescue small businesses has often gone not to those with the greatest need but rather to those with the most shameless lawyers. They are part of our national equation: Power creates money creates more power creates more money.
One provision in the rescue package provides a tax break that benefits only companies with more than $25 million in gross receipts. AutoNation, a Fortune 500 company, received $77 million in small business funds, although it returned the sum after The Washington Post reported its haul. For-profit colleges, which are better known for exploiting students than educating them, have raked in $1.1 billion.
A Brookings Institution study found that young children in 1 in 6 U.S. households are not getting enough to eat because of the worst economic crisis since the Great Depression, and we’re rushing to help … tycoons!
A Kaiser Family Foundation study found that because of layoffs, 27 million Americans as of May 2 were at risk of losing employer-sponsored health insurance. You might think that this would lead to a push for universal health coverage. But, no, the opposite: Trump is continuing to support a lawsuit to overturn the entire Affordable Care Act.
During the Great Depression, President Franklin Roosevelt responded to economic desperation by creating jobs, passing Social Security and starting rural electrification. In this crisis, Trump is trying to restrict food stamps and health insurance while giving free money to real estate tycoons.
The House of Representatives is trying to repeal the Zillionaire Giveaway, but Trump and his congressional allies are resisting.
Trump was elected in part by voters angry at the way the system was rigged. But under Trump, the economy has become rigged ever more decisively, even as children go hungry and ordinary workers lose their jobs and their lives.