The Ultra-Rich Who Cashed in on GOP Tax Cuts Are Paying Republicans Back
Trickle-down economics works: Money trickles down from wealthy donors to right-wing PACs.
Congressional Republicans in 2016. Photo by Chip Somodevilla/Getty
When Donald Trump signed the GOP's tax cut bill into law eight months ago, it was derided by critics as a giveaway to the rich and to corporations, while Republicans claimed that lower corporate rates would mean higher pay for workers and a boost to the overall economy. The GOP view of trickle-down economics isn't looking too good: Companies have largely used their tax savings to buy back their own stock, and some beneficiaries of the bill have even laid workers off. Those stock buybacks—which have totaled more than $400 billion in the second quarter of 2018—mean more money for shareholders, who are disproportionately wealthy, but likely don't help the broader economy. The middle class will save money too, but it gets only 23 percent of the benefits, according to a December analysis.
But even if the tax breaks aren't enriching Americans broadly, one group is decidedly benefiting: Republican politicians. Trickle-down economics is alive and well when it comes to money flowing from the ultra-rich to right-wing campaign operations. The New York Times reported over the weekend that the Congressional Leadership Fund, a super PAC, was raking in the dough from conservatives who made a killing thanks to the tax bill:
The fund’s donors include the casino magnate Sheldon Adelson, who has given $30 million, and whose company, Las Vegas Sands, reported a nearly $700 million windfall from the tax law earlier this year; Timothy Mellon, chairman and majority owner of Pan Am Systems, a privately held collection of companies that includes rail, aviation and marketing services, who has contributed $24 million; Valero Services, a Texas oil refining company that reported a $1.9 billion benefit from tax cuts in the first quarter, and which has given $1.5 million; and a collection of other corporations, executives and financial fund managers.
This isn't surprising: Before the bill passed, some Republican politicians openly admitted that they needed to pass the bill to assuage their donors, and tax lobbyists gave much more to Republicans than Democrats in the lead-up to the bill. So of course donors are rewarding Republicans by backing them in what's sure to be a contentious midterm season.
But the nakedly transactional nature of what's going on here is shocking, even by Trump-era standards. Legislators promised wealthy donors they would get a tax cut, they worked as hard as they could to give them one, and now they're being rewarded for a job well done. It's not corruption, since it's all perfectly legal, but it's difficult to defend a political system so clearly dominated by the 1 percent of the 1 percent.
Corry Bliss, the executive director of the Congressional Leadership Fund, told the Times that the group was working to persuade voters through door-knocking, "using a positive message in contrast to what voters see on television," as the Times put it. But the CLF has also unloaded a wave of negative ads targeting Democratic candidates in an attempt to start the mud-slinging phase of the campaign early. (The CLF is the top spender on political ads this cycle, with $57.7 million—in second place is the National Republican Congressional Committee, at a comparatively light $38 million.)
Right-wing donors may also be spending big right now because it's becoming increasingly clear that Republicans are at a disadvantage this year. Democratic candidates have a major edge in donations over their Republican rivals. (Those figures don't include PAC money.) Even in GOP-held districts, Democrats are raising more cash.
The midterm elections will be about a lot of issues—immigration, Trump's fitness for office, and the the corruption endemic to his administration, among others—but many big donors likely are mainly looking at the bottom line, and what Republicans in Congress can deliver for them. It's no wonder that Trump was reportedly looking at another tax cut for the rich last month—even the president has to cater to the wishes of the guys who pay the bills.
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