President Trump paints himself as the patron saint of farm hands and factory workers. Yet the people faring best under the Trump presidency are those more likely to be his peers and guests at the swanky Mar-a-Lago club than the “forgotten men and women” who helped elect Trump.
The average Wall Street bonus hit an 11-year high of $184,220 last year, according to new data from the New York State comptroller. That’s largely because profits at Wall Street trading firms rose 42% in 2017, to the highest level since 2010.
Public U.S. companies are on track to buy back a record $800 billion worth of their own shares this year, which would be a new record, according to J.P. Morgan Chase. That’s largely because of the new cash freed by the sharp drop in business tax rates Trump signed last December. Share buybacks generally boost the value of stocks—since they reduce the supply of shares—which is a boon for shareholders.
The tax cuts themselves are a windfall for the wealthy. The Trump tax cuts include rate reductions in virtually every tax bracket, but they provide much bigger savings for the wealthy than for anybody else. An average middle-income family will save about $930 per year in lower taxes, according to the nonpartisan Tax Policy Center. Tax savings, meanwhile, will average $13,480 for those in the top 5% of earners, $51,140 for the top 1%, and $193,380 for the top one-tenth of 1%.
To spread the wealth around, nearly 200 companies gave out one-time bonuses earlier this year, most of them around $1,000. Yet most Americans say the tax cuts haven’t produced a meaningful improvement in their finances. In a February Politico poll, only 25% of registered voters said they had noticed an increase in their paychecks from the tax cuts, while 51% said they had noticed no increase. In a March CNBC poll, 32% said their take-home pay had risen on account of the tax cuts, while more than half said they saw no change.
Since the tax cuts do cut tax rates for the vast majority of Americans, the underwhelming reaction among workers suggests the tax savings for many are simply too small to make a difference. For workers earning between $25,000 and $50,000, as an example, the average tax saving is about $380 per year, or $7 per week. Not nothing, but not much, either.
Average wages, meanwhile, are rising a scant 2.6% per year.
Typical workers aren’t necessarily bummed out about a wealth gap that is large and almost certain to grow. Consumer confidence has been improving under Trump and is relatively strong in historical terms. The labor market is also strong, and job security is improving. The “quits rate,” which measures the portion of people willing to leave their jobs, has been rising steadily, a sign that people are confident enough in the economy to leave a known job for one that could be riskier. It’s now comparable to levels just before the last recession began in 2007.
Trump says some of his policies, including the tax cuts and new tariffs he is imposing on imports, will take time to benefit ordinary folks. But he doesn’t have that much time. Voters will render their first judgment on Trump’s policies in this year’s midterm elections, when they’ll decide whether Democrats should displace Trump’s Republicans in control of the House and Senate. Some Trump voters may feel they’re doing okay, and still regard Trump as a refreshing politician doing the best he can. But others seem likely to demand results accompanying Trump’s rhetoric lauding the working class. He’s got eight months to convince them.
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Rick Newman is the author of four books, including Rebounders: How Winners Pivot from Setback to Success. Follow him on Twitter: @rickjnewman