President Trump has been shouting from hilltops about the so-called best economy ever since his sleight-of-hand, signature Tax Cuts and Jobs Act took effect. But the dirty secret of the economy under Trump is that while major corporations have had reasons to celebrate, rural communities in the heartlands have gotten stiffed.
Case in point: Iowa. Research shows that in the state the bulk of the economy’s benefits are being enjoyed by the richest one percent of Iowans, and much less so by the state’s small businesses and farmers who are fighting for scraps.
The glaring inequity of how these cuts are being felt in Iowa expose them for what they are: handouts for the wealthy being spun as gifts to working families. The Democratic candidates who are taking the debate stage in Des Moines this week and who will be squaring off in the state’s primary early next month must seize the opportunity to speak directly to the many Iowans who are only now coming to realize that they’ve been sold a bill of goods.
A recent analysis conducted by the Iowa Policy Project found that the wealthiest Iowans have benefitted most from the Trump administration’s Tax Cuts and Jobs Act. These findings indicate that the richest one percent – those Iowans with an average income of more than $1 million per year – captured 24 percent of all tax cut gains. The poorest 20 percent of Iowans – those making less than $13,700 per year – saw only about one percent of the total.
And it’s not just lower-income individuals and households who’ve been snookered by the administration’s tax cuts ¬– it’s also the smaller farm and small business owners who took the administration’s word that the cuts would bring relief. That turned out to be more hot air: the richest one percent of farms and small businesses in Iowa enjoyed 64 percent of the benefits while the poorest 20 percent got nothing.
Even Trump’s $16 billion emergency aid package for farmers who’ve been hung out to dry by the misguided trade war with China has proven to be just another goody bag for the wealthy. According to analysis by the Environmental Working Group (EWG), most of the $8.4 billion given out as a part of the aid package has gone to wealthy farmers. The top one percent of recipients received on average roughly $183,000 while the bottom 80 percent of farmers received less than $5,000.
This pattern could not be starker: The President and his supporters in Congress continually promise a lifeboat to those struggling to stay afloat but then they barely throw them a line.
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Worse yet, the President has cut critical benefits that lower-income Americans depend on. In October 2019, the Trump Administration announced steep cuts to the critical Supplemental Nutrition Assistance Program (or SNAP), on which more than 153,400 Iowa households and 318,100 individuals rely every day.
Democratic candidates do not have a monopoly on solutions – protecting and preserving the rural economy must be a bipartisan priority – but at least they’ve been willing to honestly diagnose the problems and put bold ideas on the table.
Senator Warren hits the nail on the head when she says that “consolidation in the agriculture sector is leaving America’s family farmers with lower prices and fewer choices.” And Vice President Biden is right to call for an expansion of the microloan program for new farmers looking to get their farms off the ground.
Democratic candidates must be laser-focused on the rural economy as they look to persuade Iowa voters. They must connect with the Iowans who continue to be left behind – not for the sake of scoring political points, but because the state’s local farmers and small businesses deserve so much better.
Leo Hindery Jr. is co-chair of the Task Force on Job Creation and a member of the Council on Foreign Relations. Formerly the CEO of AT&T Broadband and its predecessor, Tele-Communications Inc., he is currently an investor in media properties. The opinions expressed in this commentary are his own.