Editorial: Tax overhaul must work for all, not just rig it for rich and big business
Posted November 10, 2017 5:00 a.m. EST
CBC Editorial: Friday, Nov. 10, 2017; Editorial # 8235
The following is the opinion of Capitol Broadcasting Company
What is the goal of the current panic in Congress to overhaul the tax code?
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- Grow the economy?
- Cut the federal debt?
- Provide more disposable income for working, middle class American families?
- Lavish breaks for corporations and the wealthy because they’re already suffering the “highest corporate tax rate in the world?”
From all that’s coming out of Washington in the last couple of weeks, answering that essential big-picture question seems to be of little concern.
Passing just about any tax-cut bill to slash corporate, estate and top income-bracket taxes is really what this is all about. President Donald Trump and the Republicans in Congress are desperate to pass a bill, ANY bill that they can claim as a legislative victory.
Who benefits from legislation that by 2026 will RAISE taxes on more than half of the country’s middle class families? Why is it GOOD policy to take money out of the pockets of the folks whose spending – on everything from groceries, appliances, vehicles, and homes – is really what drives our economy?
Do we grow the economy by giving more breaks to huge corporations that already have more cash on hand then ever in our nation’s history? Corporations are so flush with cash they have to ship it to offshore tax havens, like the tiny island of Jersey in the English Channel, where Apple has stashed about $128 billion.
Do we cut the corporate tax rate based on a myth that it is the highest in the world? The reality is few, if any corporations, pay the nominal 35 percent rate. An examination of 258 Fortune 500 companies by the Institute on Taxation and Economic Policy found that from 2008 to 2015, 100 of those profitable companies paid zero — or less — in federal income taxes for at least one year – including Duke Energy. Some of those corporations received tax rebates from the U.S. Treasury amounting to hundreds of millions of dollars.
Do we cut taxes because, as economist Arthur Laffer says: “If you cut that (corporate) tax rate to 15 percent, it will pay for itself many times over. … This will bring in probably $1.5 trillion net by itself”?
Nope. That’s the kind of wishful thinking congressional Republicans embrace more than Santa Claus. Unfortunately, April 15 isn’t December 25. Reality’s tough. But don’t take our word for it.
Here’s what Bruce Bartlett, a former economic adviser to President Ronald Reagan and one of the biggest champions of that “trickle-down” scheme during the early 1980s, says today.
“This is just complete nonsense,” Bartlett said during a recent interview on the “Marketplace” radio broadcast.
“I think in their heart of hearts they believe that only the wealthy really help the economy, and they believe that the wealthy just carry the rest of us on their backs, that we're all worthless, and only the Charles Kochs and Robert Mercers of the world really add economic value to the economy, and, of course, this is just utterly ridiculous.”
You don’t grow the economy by cutting taxes. The economy expands when consumers – mostly those at the middle income levels – have more disposable cash to go out and buy things.
Look no further than our own state to see the proof. Over the last five years, the General Assembly has lavished tax cut upon tax cut to corporations and the wealthy while, in many ways, increasing tax burdens on those in the middle. What is there to show for it? A stagnant economy, underfunded critical state needs, declining tax revenues and the distinct possibility of a half-billion hole in the next state budget.
And most recently, the nonpartisan Congressional Budget Office reported that the House Republican tax plan will increase budget deficits by $1.7 trillion over 10 years – and will also force an increase in the federal debt more than current projections.
The congressional tax plans have largely been concocted in secret and are being rushed through the House and Senate (President Donald Trump’s demanded the bill be on his desk before Christmas).
Any effort to overhaul our tax system can’t simply rig things in favor of big corporations or the wealthy.
The first priority of ANY tax reform must be to make sure the economy works for EVERYONE. That’s far from what is happening in Washington now.
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