Trump’s tax cuts for Betsy DeVos and the very rich are being paid for by education cuts

Josh Israel

Josh Israel Senior Investigative Reporter, Think Progress

Education Secretary Betsy DeVos will testify before Congress on Wednesday about her priorities for the department just weeks after she proposed billions of dollars in cuts for education spending in fiscal year 2020.

DeVos has labeled the cuts “tough choices,” but new analysis from the Center for American Progress Action Fund (CAPAF) shows DeVos’ personal savings from the 2017 GOP tax bill alone could have covered a significant chunk of them.

(ThinkProgress is an editorially independent news site housed within CAPAF.)

According to her 2018 personal financial disclosures, DeVos’ income was somewhere between $46.8 million and $109 million, mostly stemming from LLCs, limited partnerships, and distributive shares. CAPAF’s analysis estimates the Trump tax cuts likely saved her $10 million or more in the last year alone.

Seth Hanlon, a senior fellow at the Center for American Progress who focuses on federal tax and budget policy, said DeVos was “illustrative of the windfall that extremely wealthy business owners were handed in 2017.”

“Because her family’s company, Amway, is — as we found out from a letter they sent to Congress — structured as an S-corporation,” he explained, DeVos’ holdings were eligible for a special new deduction created in the tax bill. The tax changes Trump and Republicans implemented in 2017 actually reduced the top rate for these types of holdings from 39.6% to 29.6% taxation.

“They sold this new deduction as a small business tax cut, but the kinds of businesses that really benefit are Amway, the Trump Organization, and their owners,” Hanlon said.

Though Trump’s Treasury Department initially claimed the tax cuts would pay for themselves through growth, they have not. Corporate tax revenue has plummeted since the bill’s enactment, fueling the largest budget deficits in American history.

With this predictable result, the Trump administration — which also once promised to eliminate the budget deficit entirely — is now proposing spending cuts to education. DeVos made a budget request last month that included $6.7 billion in cuts, claiming they were eliminating “programs that do not address national needs, duplicate other programs, are ineffective, or are more appropriately supported with state, local, or private funds.”

The proposed cuts would decimate programs like the federal work-study program, the 21st Century Community Learning Center after school program, the American History and Civics Education program, and the Full Service Community Schools academic and social services program. An initial draft also included cuts to the Special Olympics, but Trump countermanded those cuts personally after public outrage.

Ironically, as the CAPAF analysis noted, the $10 million DeVos may have received in cuts from the tax bill could have provided work-study funding for 5,600 students, Nevada’s entire share of the 21st Century Community Learning Center after school program, or funding for Full Service Community Schools academic and social services at schools in 20 communities.

“We knew what was gonna happen,” Hanlon said. “As soon as the ink was dry, they would turn around and say ‘We can’t afford investment in children, investment in schools, and many other areas because of mounting budget deficits.’ And the biggest reason the budget deficit has increased in the past two years is the revenue loss in the tax bill.”

To make matters worse, the Trump administration is quietly pushing to make the tax cuts permanent at a cost of another trillion dollars over a decade, again benefiting the very wealthy. “Clearly, that trillion is way more than the cuts to education programs,” Hanlon observed, and even more than the discretionary budget for the entire Education Department.

Michael Linden, a fellow at the Roosevelt Institute and a Tax March board member, said the Trump tax break for “so-called ‘qualified business income’ is one of the worst provisions in a GOP tax law packed to brim with bad ideas.”

“It was sold as a boon to small business,” he said, “but Betsy DeVos’s $10 million tax break shows that’s not the case at all. It is appalling, if not surprising, that after pocketing a tax break that was supposed to be for small businesses, she is turning around proposing massive cuts to education programs that benefit everyday Americans.”

DeVos did not respond to a request for comment about her tax benefits and the proposed education cuts.


Reposted from ThinkProgress

Josh Israel is a senior investigative reporter for at the Center for American Progress Action Fund. Previously, he was a reporter and oversaw money-in-politics reporting at the Center for Public Integrity, was chief researcher for Nick Kotz’s acclaimed 2005 book Judgment Days: Lyndon Baines Johnson, Martin Luther King Jr., and the Laws that Changed America, and was president of the Virginia Partisans Gay & Lesbian Democratic Club. A New England-native, Josh received a B.A. in politics from Brandeis University and graduated from the Sorensen Institute for Political Leadership at the University of Virginia, in 2004. He has appeared on CNBC, Bloomberg, Fox News, Current TV, and many radio shows across the country.

Posted In: Allied Approaches

Union Matters

Get to Know AFL-CIO's Affiliates: National Association of Letter Carriers

From the AFL-CIO

Next up in our series that takes a deeper look at each of our affiliates is the National Association of Letter Carriers.

Name of Union: National Association of Letter Carriers (NALC)

Mission: To unite fraternally all city letter carriers employed by the U.S. Postal Service for their mutual benefit; to obtain and secure rights as employees of the USPS and to strive at all times to promote the safety and the welfare of every member; to strive for the constant improvement of the Postal Service; and for other purposes. NALC is a single-craft union and is the sole collective-bargaining agent for city letter carriers.

Current Leadership of Union: Fredric V. Rolando serves as president of NALC, after being sworn in as the union's 18th president in 2009. Rolando began his career as a letter carrier in 1978 in South Miami before moving to Sarasota in 1984. He was elected president of Branch 2148 in 1988 and served in that role until 1999. In the ensuing years, he worked in various roles for NALC before winning his election as a national officer in 2002, when he was elected director of city delivery. In 2006, he won election as executive vice president. Rolando was re-elected as NALC president in 2010, 2014 and 2018.

Brian Renfroe serves as executive vice president, Lew Drass as vice president, Nicole Rhine as secretary-treasurer, Paul Barner as assistant secretary-treasurer, Christopher Jackson as director of city delivery, Manuel L. Peralta Jr. as director of safety and health, Dan Toth as director of retired members, Stephanie Stewart as director of the Health Benefit Plan and James W. “Jim” Yates as director of life insurance.

Number of Members: 291,000 active and retired letter carriers.

Members Work As: City letter carriers.

Industries Represented: The United States Postal Service.

History: In 1794, the first letter carriers were appointed by Congress as the implementation of the new U.S. Constitution was being put into effect. By the time of the Civil War, free delivery of city mail was established and letter carriers successfully concluded a campaign for the eight-hour workday in 1888. The next year, letter carriers came together in Milwaukee and the National Association of Letter Carriers was formed.

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There is Dignity in All Work

There is Dignity in All Work