By Melanie Foley on Public Citizen’s Global Trade Watch
As many Americans are scrambling to finish their taxes, we decided the Obama administration’s suspicious “tax cut” claims needed an audit.
(Speaking of taxes, you have until Monday to file this year.)
Specifically, we’re looking into the oft-repeated claim that the Trans-Pacific Partnership (TPP) would deliver 18,000 tax cuts for “Made in America” products.
The main takeaway from our audit is: No, the TPP would not generate 18,000 tax cuts.
Rather, what the TPP would cut is more American jobs, wages, and food safety and environmental protections.
The TPP’s Environment Chapter would supposedly protect at-risk animals like sharks, whales and elephants. But the TPP would simultaneously cut taxes on trade in shark fins, whale meat and ivory.
In other words, the TPP can’t decide if it’s protecting these endangered creatures or facilitating greater trade in them in the name of “tax cuts”!
That 18,000 figure (which double, triple and quadruple counts some cuts) also includes goods that the other TPP countries barely buy, like ski boots for the tropical country, Brunei.
The administration has tried to shift attention to a false “tax cut” narrative because its claims about the TPP creating American jobs and economic growth have fallen flat.
The number of cuts says nothing about a pact’s likely effect.
The U.S.-Korea pact included almost 10,000 of these kind of cuts. But in its first three years, the U.S. deficit with Korea nearly doubled.
What’s more, any legitimate cuts would not necessarily translate into cheaper prices for consumers.
For example, the TPP also includes cuts for Nike’s made-in-Vietnam shoes, which can already sell for over $100 though they cost around $10 to make. And Nike could simply choose to add the gains from cuts to its substantial profit margin rather than pass savings on to consumers.
That also means Nike’s taxes —which would have gone to the U.S. government and covered things like veterans’ benefits and children’s health insurance — could go to CEO bonuses instead.
The bottom line: This tax cut charade is a desperate misdirect to try to get our minds off the fact that the TPP would offshore U.S. jobs, allow in unsafe food, threaten the environment and jack up medicine prices.