American workers are now paying more taxes to the federal government than all of America's corporations taken together because of the Republican Party's anti-worker Tax Cut and Jobs Act of 2017.
The U.S. Department of the Treasury reveals individual income tax receipts from tax-paying Americans for the first half of 2018 rose 8.1 percent to $915 billion. On the other hand, corporate income tax receipts fell 32.4 percent to $100 billion.
Corporate tax receipts have kept falling as a portion of all federal revenue, from 17 percent in 1970 to nine percent in 2017. This year, corporate tax receipts account for only 5.6 percent of federal revenue, which is the smallest portion in history on an annualized basis.
The sharp plunge in corporate tax revenue and the obscene tax burden borne by ordinary American workers is largely a result of Tax Cut and Jobs Act Trump signed into law by Donald Trump in December 2017. The law slashed the top corporate rate from 35 percent to 21 percent, among other gifts to the business community.
Workers did receive tax cuts, but these were a pittance compared to the massive windfall that went to business firms. More than two-thirds of households got a tax cut averaging only $2,200, according to the Tax Policy Center.
In the summer of 2017, the Congressional Budget Office (CBO) expected corporate tax revenues to rise 4.5 percent in 2018 without any tax cuts. The huge drop in corporate tax revenue following the tax cuts highlights why the tax law has become a political problem for Trump and his fellow Republicans.
The tax law is hugely unpopular. Americans, in general, feel the tax cuts too heavily favor businesses and the wealthy.
The new federal revenue numbers confirm their worst fears. The unpopularity of the tax cuts could lead voters away from Republicans in the upcoming midterm elections, and perhaps transform one or both houses of Congress to Democrats.
Trump's tax cuts are also boosting Washington's annual deficits big time, along with the national debt. CBO expects the gap between revenue and spending to soar by 21 percent this year to $804 billion. The deficit will exceed $1 trillion by 2020 and keep on growing until the decade of the 2020s.
"The federal government will certainly collect less revenue than it would have without the tax cut," said economist Kyle Pomerlau of the nonprofit Tax Foundation. "Eventually, the government does need to pay its bills. We're not on a sustainable path."
