On Nov. 28, 2017, I published a column describing Wisconsin Sen. Ron Johnson’s public threat to vote against President Trump’s enormous Republican tax cut for the wealthy unless it included more tax relief for small businesses as a fraudulent sham.
Rather than standing up for mom-and-pop small businesses like dry cleaners, repair shops and corner grocery stores, millionaire Johnson was simply grabbing a bigger tax cut for four not-very-small businesses he and his wife owned in Oshkosh. Shepherd Express was one of the few media in the state to report Johnson’s corrupt financial motive.
Thanks to ProPublica, a nonprofit, independent, investigative reporting organization, we now know it was far worse than simply self-serving personal corruption by one unethical politician. It turned out to be the biggest raid on the U.S. treasury in the nation’s history enabling the wealthiest people in America to reduce their taxes by billions of dollars every year leaving the rest of us to make up the difference. It’s no exaggeration to call it the financial crime of the century.
For Millionaires Only
Johnson succeeded in adding fatter tax cuts for “pass-through businesses” where profits are passed through for owners to pay as personal income instead of corporate taxes. Johnson claimed those were small businesses that were “engines of innovation and job creation.” Actually, it was the way the nation’s richest billionaires and millionaires from Michael Bloomberg to Donald Trump organized hundreds of their businesses.
That’s why Johnson’s actions not only benefitted himself and his wife Jane, but also well-known Wisconsin billionaires, Dick and Liz Uihlein who ran a giant packaging company and Diane Hendricks, owner of a roofing company, who have funded the political careers of both Johnson and former Republican Gov. Scott Walker ever since 2010.
The Uihleins and Hendricks contributed $20 million to dark money groups financing Johnson’s re-election in 2016. It paid off handsomely for them. Together both businesses netted $215 million in tax deductions in 2018 alone. Since the full ramifications of his political manipulations became public, Johnson has denied ever discussing those enormous tax cuts with his major donors. So what? Johnson clearly knew how overwhelmingly it would benefit them.
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Like every other tax cut ever passed by Republicans, Johnson’s increased “pass-through” tax reductions tossed a few crumbs to truly small businesses. Nevertheless, nearly 60% of the billions every year went to the top 1% of wealthy Americans and most of it to the top 0.1%.
Widely Unpopular
Those massive Trump tax cuts for the wealthy in 2017 didn’t fool anyone. In fact, their widespread unpopularity was a major reason Democrats regained control of the House of Representatives in 2018. They’re still among the most unpopular tax cuts ever passed by Congress among voters in both political parties as well as independents. Despite that, Republicans are determined never to reduce the enormous windfall for their wealthiest donors. That was a non-negotiable demand by Republicans voting to pass President Biden’s bipartisan infrastructure bill in the Senate.
Corrupt tax benefits for the wealthy have been going on behind the scenes politically for decades. They’ve created a radically unfair U.S. tax system rewarding wealthy individuals and corporations by shielding most of their income from taxation while forcing working class Americans to pay more. It’s all finally becoming public because ProPublica gained access to thousands of IRS tax records of the wealthiest people in America.
The public outrage is adding momentum for passing the rest of Biden’s agenda for a robust national economic recovery. Biden always planned a larger package of economic benefits in addition to the bipartisan infrastructure bill to be passed through a special Senate budget reconciliation process requiring only 51 Democratic votes with Vice President Harris casting the tiebreaker with Republicans.
Popular programs include continuing child tax credits, providing affordable childcare so single mothers and families can take home more pay, improving Medicare benefits and health care subsidies, free community college and converting to clean energy to fight the deadly consequences of climate change. Most popular now that Americans know how shockingly little the wealthy pay in taxes is financing the entire package simply by requiring those at the top to start paying more of their share.
Republicans still believe they will have the political advantage the opposition party has had historically in the first midterm election after a new president is elected. But Republicans may be cancelling that out by continuing their support for the unpopular, divisive policies of Trump’s failed presidency.
In the latest Marquette University Law School poll, Johnson’s popularity had declined with only 35% of registered voters statewide viewing him favorably, not very promising for his re-election prospects in the midterms. That was even before taxpayers found out Johnson pulled the Great Treasury Robbery for the billionaire gang.
