president trump dlefrs delivers on the promise of big tax cuts by christmas but the holiday cheer that he's promising the middle class, it's not going to last. >> one thing it isn't is to narrow america's extreme income inequality and that's a problem. i'm ali velshi. >> and i'm stephanie ruhle. hope you're having a great christmas weekend. we're going to talk about promises. promises and even more promises. some of them really good ones. the president and the gop said

the tax bill would do, but a lot of promises are broken. >> some bigwigs are publicly high fiving the tax cuts but they may have some ulterior motives. there's so much to unpack about this tax package. after a months-long public campaign to get tax cuts through congress, president trump signed the new tax law with very little fanfare on friday. this law slashes corporate taxes way down from a statutory or official rate of 35% to 20% now, and it makes those tax cuts permanent. 21%, i'm sorry. it was 20 for a long time and settled up at 21. to pay for the trillion dollar or more hole that that's going to blow into the u.s. budget, the middle class tax relief that president trump promised is going to be smaller and temporary. so we end up with a big deficit financed tax cut that benefits businesses and the wealthy at the expense of the middle class. now, there's a whole lot of analysis on this.

independent analysis for instance from the tax policy center estimates that the top 1%, the wealthiest americans, will ultimately get 83% of the benefits of this tax bill. >> one thing that stood out to me, we have been focused on the composition of these bills. the house side, the senate side. what's interesting is the bill actually got better for the rich once it was in committee. so once this thing got into law, it wasn't either side debating anymore. sometimes when the right and left hand got together, it became even nicer for rich people. >> which is kind of interesting. one of the estimates is that by 2027 when the individual tax cuts expire, now, there's some talk that they could be extended by another congress, but assuming they expire as they do, all people earning less than $75,000 will be worse off. so this is the percentage change in after-tax income, the lowest income earners are on the left, the highest on the right. you can see that if you were on

the lower income side of things, by 2027 you're going to be worse off. >> by 2019, the average income bo boost for millionaires is three times that for a family earning $40,000 to $50,000. whether you're a family at the low end, middle end or high end, one thing president trump has done an excellent job at is selling this. people are feeling very good about the economy and that's a positive. >> so we're going to keep on tracking all of the different things that happen with this tax bill, but it wasn't what was initially promised. >> well, the new tax law came with a host of promises that they made in the run-up to get passed. a lot of them flew directly in the face of analysis from economists and tax experts. while most of the promises from the president and the gop were easy to debunk, they kept repeating and they still continue to repeat their claims. that's what is so unfair to do to the american people. here is an example from the president just yesterday while signing the legislation at the

white house. >> as you know, we had the largest tax cuts in our history just approved. the bottom line is this is the biggest tax cuts and reform in the history of our country. this is bigger than actually president reagan's many years ago. again, the biggest tax cut, biggest reform of all time. >> and while the president is selling wins and people repeat that, it is not true. so for facts sake, what else did they pledge to get this tax law through? president trump and the gop made a lot of promises about their tax bill. the problem is, almost none of them made it into final law. here are five examples. promise number one -- >> the greatest benefit is going to be for jobs and for the middle class, middle income. >> as we've said early and often, most, but not all middle class americans will see a tax cut, at least initially.

whatever gains they do see expires by 2026, while corporations receive a larger, permanent tax cut. problem number two -- >> the rich will not be gaining at all with this. >> it's not good for me. believe me. >> no, it will be great for him. the top rate drops to 37%, rewarding top earners with an average one-year break of $287,000. plus doubling the limit on estate tax exclusions only benefits the very rich. add that to the new tax cuts for pass-through businesses with large real estate holdings. sound familiar? the rich and trump make out like bandits. promise number three -- >> not only will this tax plan pay for itself but it will pay down debt. >> hold on there. the joint committee on taxation, the congressional score keeper, said this law will add a trillion dollars to budget deficits even when you factor in more economic growth, not quite paying down the debt. promise number four -- >> it will be the biggest tax

decrease or tax cut in the history of our country. >> nope. this does not hold a candle to the 1981 reagan tax cut. the largest tax bill in the last 100 years. in fact this is not even the largest tax cut in the last five years. that honor goes to president obama who made the bush era tax cuts permanent in 2013. promise number five -- >> we are making things so simple, we are making things so simple that you can do your taxes on a form the size of a postcard. >> sure. more households will take the standard deduction now that it's been doubled. that may simplify things for some, but the tax code is actually much more complex thanks to new loopholes and glitches that expensive accounts ants and tax lawyers will be gaining for years to come. they continue to be disingenuous about what they are giving to the american people of the and we cannot forget carried

interest. it benefits private equity guys, investors and hedge fund managers. gary cohn told axios this week that the white house tried to get this thing out 25 times but the hill -- the hill kept it in. you and i have asked over and over again. >> come and tell us why. >> please let us know why should carried interest, this age-old loophole, stay in the system. no one will answer. you know what that proves? it proves that the swamp is alive, well and kicking. special interests had a lot of influence. >> so i read a great piece the other day by a penn professor. he has argued that the entire law, the entire way this was built goes against the values of healthy democracy and he made three arguments. he wasn't talking about the tax bill. his points were, number one, it wasn't deliberative. there was no debate. in the dead of night they came up by a bill just seen by republicans. there was no hearings and debate. there was one bipartisan hearing but it wasn't even when the bill

was fully baked. so people voted on a bill they didn't have a score on, they didn't know what it was. number two, it wasn't representative. we saw polling all the way through that showed that americans didn't want this. to make a tax bill unpopular is kind of -- a tax cut unpopular is remarkable. and number three is it wasn't virtuous. meaning it was not for the general good. they numerically applied the tax cut to a lot of people, but from a percentage basis it really does reward a very small slice, the corporate slice and the wealthy slice, so it doesn't meet the test of good legislation. >> i'll give you a number four. even the things that are in there that might be good, those arguments get thrown out the window because the president selling this has told lies -- >> right. >> -- all the way through. so the self dealing and the disingenuousness, whether the estate tax, the pass-through, it's stunning.

even sarah huckabee sanders said, listen, everyone is going to win. if the president is going to win, just say it. if you're honest about it, if you want to make the argument a rising tide lifts all boats or as you like to say in this case, all yachts, simply say it. when you're dishonest about what the bill does, why should anyone believe you. >> within minutes of this bill moving from capitol hill to the white house for signing, some of the giants went out of their way to issue public statements praising the legislation and more. they said they intend to boost pay or issue bonuses because of the projected savings to their bottom line this new law will afford them. they include companies like comcast, at&t, boeing, sinclair broadcast group and wells fargo. i mean it was minutes before the stuff came out. >> and shall we tick through why they may have done this? >> actually, yeah, let's put that back up. let's take a look. comcast, parent company of this

netwo network. the chairman of the company did point out they really did enjoy the removal of the net neutrality restrictions. >> and when we covered net neutrality and said over and over, who's going to benefit? it's big media companies. you know at&t would like to buy time warner and there's issues around that. the white house, the department of justice doesn't like it. if you're talking about wells fargo or fifth third bank, wells fargo is sitting on huge fines that they have to pay and mick mulvaney said we're going to visit them. now, this may be a coordinated pr effort, but we do have to point out, people who are getting these bonuses, if i was a teller in youngstown, ohio, getting $10 last week and now i'm going to be getting $15 an hour, i'm thrilled. it's a real positive. come january or february, we may see a lot more companies do this. >> fair enough. it's just worth knowing. sinclair broadcasting, by the way, is also looking for

approval n ion its merger. i'm not saying it's causal, it's remarkably coincident. >> you are also seeing record numbers of share buy-backs. that's a huge benefit to shareholders. the question is does the man or woman on the street who's getting a $1,000 bonus, do they mind if the big bosses get a $1 million bonus. hardly a day goes by that the president doesn't brag about the stock market. but it's worth rye minding him how his stack up against the competition. >> the market benefits the highest earners. the income gap in this country is a huge problem. i accept i don't conquer

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ordinary americans is nothing compared to what the wealthy will see. >> all of this while income inequality in the united states continues to grow, to get worse. this new tax law that many people believe will help the rich to get richer as the poor get poorer will only make it worse. that's the problem. >> the motion is adopted. without objection the motion to reconsider is laid upon the table. >> republicans have just enacted a tax law that critics say will widen america's already massive income inequality gap. >> i think of two big sets of causes of income inequality. the first is the pretax stuff. how much you make before taxes come out. that's globalization, deregulation, it's technology. those forces have caused pretax inequality to go way up. unfortunately, the tax code has kp exacerbated that. >> david is an opinion writer that covers economic policy. he said the gap between the haves and the have nots has been widening to extreme proportions.

>> in the 1950s and 1960s, income inequality was falling. the poor and the middle class were getting larger pay increases by the rich. >> by the 1980s, the bottom 90% of earners owned 35% of the country's wealth, while the top 1% controlled only 24%. today that's reversed. the top 1% only nearly 40% of the country's wealth while the bottom 90% control just 27%. >> income inequality is the gap between what the rich are earning and what everyone else is earning. and one of the dominant features of the u.s. economy over the last 40 or 50 years is that it has been growing a lot. >> while other countries also struggle with income inequality, they soften the blow by offering things like universal health care, job retraining programs, child care benefits, and free educati education. meanwhile, the u.s. isn't as generous. the new tax law will likely widen the income inequality gap.

>> their tax cuts are small, their tax cuts are temporary and the bill will increase the deficit, which means long term the government will have to find spending cuts to make up the deficits. those cuts to schools, medicare, social security are likely to hurt the middle class. >> when you're looking at inequality, trends prove that the arguments for trickle-down are wrong. since 1980 we've seen taxes go down, down, down and income at the top has gone up but inequality has grown. that's not just a financial issue, it's added to the social unrest. >> that's completely right. i have thought of this about the issue of our time. i used to think it was unemployment. but we're below the level that economists used to say is full employment. we're below 5% and yet people in the middle are not seeing their incomes go up. there are all sorts of different statistics on this that you can pull up but one of them is that the global top 1% controls the

same amount of wealth as the 99% below it. there's a number that says the eight richest people in the world control as much wealth as the bottom half of the entire world's population. now, you can parse these numbers different ways, but there's something about that. i think people don't mind that there are billionaires and really rich people and people who have great success. but we can't seem to keep everybody moving in the same direction at the same rate. >> and this tax policy doesn't only not address income inequality, the impact could be a reverse robin hood. we know that it's undercutting health care. as far as what it does in child care, in student debt, it just doesn't do enough. you can look at this tax plan and it worsens one of the biggest problems plaguing this nation. >> and i thought david's point was one that you make a lot, and that is that it's not just the tax plan, it's the fact that as the deficit widens, and we've got to cut the deficits, it

becomes the programs that the least among us depend upon that end up getting cut. this is why this is philosophically important. all right, on the other hand, let's talk about some good news. the stock market has soared to new heights in 2017. president trump will not let you forget it. but is his market the best ever? and congress again avoided a shutdown for now. but so much for good tidings in the new year because it's going to get ugly when lawmakers kick off 2018. but while some push hh commission investment products, fisher investments avoids them. some advisers have hidden and layered fees. fisher investments never does. and while some advisers are happy to earn commissions from you whether you do well or not, fisher investments fees are structured so we do better when you do better. maybe that's why most of our clients come from other money managers. fisher investments. clearly better money management.

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welcome back to "velshi & ruhle." before heading for their extended winter break, congress managed to agree luckily on a short-term fix to prevent a government shutdown. funding federal spending through january 19th, they also, i'm thrilled to announce, extended chip, the children's health insurance program, through march which gives lawmakers a little more time to figure out a longer term solution. now, there's still divisions

between democrats and republicans over daca waivers for undocumented immigrants who came to the united states as children. it increases nonmilitary spending, but you better get ready because it is going to get ugly on capitol hill. the threat of a shutdown in the new year is probably bigger than lawmakers are letting on right now. >> because they wanted to go home. we talk a lot about this. president trump loves to take credit for this year's stock market rally. and he uses it as a measure of his success in office. >> but, ali, it's been an extraordinary rally. it has been a supercharged year. >> the s&p 500 has gained 18% in trump's first 11 months in office. that's a big deal. in a good year you might get 6% or 7%. but some global markets are doing just as well and they don't have a president trump leading their countries. japan, their nikkei index is up 20%. the hang seng is up even more, 28%. not sure donald trump can take credit for either of those.

even though germany's dax is up by 12%, that's still double the amounti amount a normal market would have. >> he also says no other market has seen as big an upswing but that is also not true. in president obama's first 11 months, the s&p grew by 38% -- well, the u.s. was coming out of a very bad recession then. even so, under george h.w. bush the market grew by 20% in his first 11 months, so that clearly puts donald trump in third. >> right. so donald trump is banking on the fact that a whole lot of people don't get the relationship between a president, the economy, gdp growth and a stock market. sometimes there isn't one. so the danger of this is that markets go up and sometimes they go down and if you live boy the sword, you die by the sword. it is a good market. the point that you like to make

is it probably does benefit from the president talking it up a good amount. >> he talks it up a lot and you see people very excited about it. one of the risks looking at the stock market, stock performance is not based solely on profitability, it is projections. so infrastructure spending and deregulation has people very excited. but the dow, the dow's superperformance it's only five stocks driving it forward. there are other stocks that haven't had such a great year. >> if your 401(k) or investments are in index funds or exchange-traded funds, then you will benefit from the fact it might be five stocks but if you're invested in the dow or s&p 500 or the nasdaq, you have been getting those gains. >> pensions, 401(k)s, when we say it only benefits the rich, think about who has pensions out

there. when the market does well, it is an overall positive. >> it's not as broad as the president would like to pretend it is, but absolutely. if you work for a company that has a pension or does well, you might get a benefit from that. >> and when a company says i'm going to build a factory and hire people, that's a big move. do you know what the stock market goes up, do you know what it could do tomorrow? go down. some good news for obamacare. nearly nine million people signed up for coverage, just sort of last year's figure of 9.2 million. president trump continues to say that the tax bill has been a death nell for obamacare. it's still limping along. >> so there's a rlot of people that will have health care coverage. i did happy to say children will be covered under chip. we want americans to be healthy and happy. that does it for us on this holiday edition of "velshi & ruhle." >> you can catch us both together every weekday at 11:00

but we'll be back next saturday together. you'll catch us both on tv. you can find me monday to friday on msnbc live at 3:00 p.m. >> normally me at 9:00, for now i'll just say merry christmas. see you soon. a problem for me. i just drank tons of water all the time, it was never enough. my dentist suggested biotene. my mouth felt more lubricated. i use the biotene rinse and then i use the spray. biotene did make a difference. [heartbeat]

hey, good saturday to you. i'm richard lui in new york city at msnbc world headquarters. thanks for spending time with us. it's 1:00 in the east, 10:00 in the west and here is what we are watching. the russia probe, new revelations. a house intel member telling msnbc there is no doubt investigators are on to something. >> i feel on a continuing basis that there is increased evidence of obstruction taking place. as the investigation is getting too hot for them, it's entered the oval office. >> one of the questions, who is orchestrating alleged obstruction and why are some intel members unable to question

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