In the 406 days since he took the oath of office, President Trump has made 2,436 false or misleading claims, according to The Fact Checker’s database that analyzes, categorizes and tracks every suspect statement uttered by the president.
Our interactive graphic, created with the help of Leslie Shapiro and Kaeti Hinck of the Post graphics department, displays a running list of every false or misleading statement made by Trump. We also catalogued the president’s many flip-flops, since those earn Upside-Down Pinocchios if a politician shifts position on an issue without acknowledging he or she did so.
As we were updating the database in recent weeks, we’ve found ourselves doing something unusual — double checking that we had not entered the same speech twice. The president’s sales pitch for his tax plan has been so consistent it made us do a double take. But consistency does not equal accuracy.
Before Congress even began debating tax legislation, the administration’s rhetoric was full of Pinocchio-worthy claims. And as much of that spin has reemerged, it is fresh with new or altered exaggerations. We have previously checked many of these claims in a variety of ways.
Regardless, the president’s spin seems to have enlightened new believers. Polling indicates a big swing in favor of the new law, with twice as many Americans approving of the law than at the end of 2017.
So as a reader service (and given the president’s penchant for repetition), here’s a summary of Trump’s most frequent false and misleading claims about the tax bill:
“[Our tax plan] is the biggest tax cut and reform in American history.” (Feb. 2)
The best way to compare tax cuts (or spending plans) over time is to measure them as a percentage of the national economy, as we’ve explained before. The budget blueprint approved by Republicans indicates that the tax cut would reduce revenue by $167 billion in 2018; it also averages out to $167 billion a year in the first four years.
If we use a gross domestic product of $19.5 trillion in 2018, which assumes the kind of growth Trump expects, the tax cut would be nearly 0.9 percent of GDP. And under those circumstances, Trump’s cut falls behind seven previous tax cuts dating back to 1945. That means, Trump’s tax cut is only the eighth largest — certainly not the “biggest.” It’s smaller than two of Obama’s tax cuts.
President Trump has made this claim 14 times since he signed the tax cuts into law.
He has repeated it over 64 times since he took office.
“In addition to the bonuses created by our tax cuts, economists estimate that our business tax cut will raise the income of a typical family by an average of $4,000.” (Feb. 5)
Trump is citing a White House Council of Economic Advisers report that has been widely criticized for the $4,000 estimate. Our friends at FactCheck.org offered a good illustration. Consider this simple arithmetic. There are almost 126 million households in the United States, so an average of $4,000 per household would mean a total income gain of $500 billion. Now that gain, according to the White House, is a direct result of the tax cut. The United States collected just under $300 billion in corporate taxes in fiscal 2017 before the tax bill was passed. If the new corporate tax rate had been in place, the government would have collected $127 billion less. Put another way, companies would have saved $127 billion, but even if they gave every dime back to workers this doesn’t come near the $500 billion required to average $4,000 per household. (The White House says this is not a fair comparison because so many companies avoided the U.S. tax rates that current tax receipts are lower than they would be under the new law.)
That being said, conservative economists generally say they expect wages to rise after the corporate tax cut, but few have embraced the White House estimate. According to the nonpartisan Tax Policy Center, the average household would get a tax cut of $1,610 in 2018.
President Trump has made this claim six times since he signed the tax cut into law.
He has repeated it at least 12 times since taking office.
“So we’ve gone from being one of the highest-taxed countries anywhere in the world to being one of the most competitive.”
(Feb. 5)
As we have previously explained, the United States has never been one of the highest-taxed nations, developed or not — and that was before Trump’s tax cut. The Pew Research Center, using 2014 data, found that the tax bill for Americans, under various scenarios, is below average for developed countries. In 2014, according to comparative tables of the Organization for Economic Cooperation and Development (OECD), revenue as a percentage of the gross domestic product — the broadest measure of the economy — was 26 percent for the United States. Out of 34 countries, that put the United States in the bottom third — and well below the OECD average of 34.4 percent. Given the breadth of the Trump tax cut, it’s reasonable to expect the United States will rank even lower in the OECD rankings.
President Trump has made this claim at least once since he signed the tax cut into law.
He has repeated it at least 33 times since taking office.
“Under this new law, the typical family of four earning $75,000 will see an income tax cut of more than $2,000 each, slashing their tax bill in half each year.” (Jan. 8)
Under the new tax law, the family Trump describes will probably see a tax cut. However, the amount of that cut will vary depending on their individual tax situation. Plus, Trump fails to mention that these tax cuts are scheduled to phase out by the end of 2025 and as a result of inflation, taxpayers who are getting a cut now may well see a hike then. Moreover, for many families, payroll taxes take up the largest chunk of their tax bill. But Trump reductions are in income taxes — not payroll taxes.
President Trump has made this claim four times since he signed the tax cut into law.
He has repeated it seven times since taking office.
“Now, the first $24,000 earned by a married couple is completely tax-free.” (Feb. 1)
The tax plan would nearly double the standard deduction, $12,000 for individuals and $24,000 for married couples, but also eliminate personal and dependent exemptions (currently $4,050 per family member). So a couple with two children already are “completely tax-free” on their first $28,800. That’s because they get $12,600 in a standard deduction and $16,200 in dependent and personal exemptions. It’s possible Trump’s expanded child tax credit might help make up some of the difference, but maybe not — couples with children could quite possibly end up with a larger tax bill.
President Trump has made this claim twice since he signed the tax cut into law.
He has repeated it four times since taking office.
“We didn’t know that hundreds and hundreds of companies, millions and millions of people, were going to be getting large bonuses because of what we did.” (Feb. 26)
Trump is citing a list maintained by Americans for Tax Reform, an anti-tax group, which says 409 companies have offered bonuses, pay increases or increased 401(k) contributions because of the tax plan. The group says over 3 million Americans have received tax bonuses, many about $1,000 or $2,000; the list identifies three companies as offering $3,000 or more. With about 126 million full-time workers in the United States, only about 3 percent have received these one-time bonuses, yet Trump misleadingly promotes them as widespread. More than half of the companies participating are in the financial services industry, while the others range from major multinational corporations to local restaurants and small businesses.
So, what are companies doing with the extra cash? An analysis from the nonprofit research group Just Capital looked at how 90 public corporations planned to spend their tax savings. It found 58 percent of the corporate tax saving would be directed to shareholders in the form of stock buybacks, direct distributions or retained earnings. Moreover, stock buybacks, which benefit shareholders (and executives), have already reached record levels. A Morgan Stanley analysis found that companies are more than three times as probably to allocate the tax savings to buybacks & dividends than labor compensation. For companies in the manufacturing industry, which Trump regularly touts, 47 percent are probably to allocate the tax savings to stock buybacks, just 9 percent are probably to spend the savings on labor compensation.
President Trump has made this claim four times since he signed the tax cut into law.
“Because of our tax cuts, Apple is investing $350 billion in the United States. They’re bringing $240 billion back — $240 billion. They’re going to pay a tax of $38 billion. …But they’re going to invest a total of $350 billion.” (Feb. 1).
As we’ve previously explained, Apple announced a five-year investment plan in January, which includes $30 billion in capital expenditures and roughly $275 billion in domestic spending with U.S. suppliers and manufacturers. The tech giant plans to build a new campus and hire 20,000 employees. How much of this is a direct result of Trump’s tax plan? Apple chief executive Tim Cook told ABC News that “there are large parts of this [plan] that are a result of the tax reform and there’s large parts of this that we would have done in any situation.” So, some but not all.
Apple did not provide The Fact Checker with a breakdown of which components of the plan were in place before the new law and which were added after, so we can’t precisely determine the law’s impact. Apple, however, did say it would be making a $38 billion tax payment to repatriate overseas profit, which is made possible under a provision of Trump’s tax law. And like other big U.S. companies, it gave employee bonuses in response to the legislation.
President Trump has made this claim 13 times since he signed the tax cut into law.
“We’ve gone from one of the highest business tax rates anywhere in the world, to one of the most competitive — one of the lower ones — so that our great workers and companies can compete and win against anyone.” (Feb. 1)
The United States certainly had one of the highest statutory corporate tax rates in the world, having been pegged as high as 39.1 percent when including state taxes. (The federal rate was 35 percent.) But the actual tax a company pays (after deductions and tax benefits) is equally if not more important. This is known as the effective tax rate.
Before the new tax law, the U.S. effective tax rate was 27.1 percent. The new federal corporate tax rate drops to 21 percent, but it also strips many of the deductions and additional tax benefits for companies, which means the effective rate will probably be closer to the set statutory corporate rate. What does all of that mean? The new U.S. corporate tax rate is more in line with the average statutory tax rate, according to tables from the OECD. And so, while the rate was never the highest, it’s also not among the lowest.
President Trump has made this claim twice since he signed the tax cut into law.
He has repeated it 27 times since taking office.
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