Central to the ability of the Republican Congress to pass their tax “reform” plan is the need to limit the increase in the nation’s budget deficit from tax cuts to $1.5 trillion.
That’s right, if the deficit grows by only $1.5 trillion, the plan could pass without a single Democratic vote.
Imagine the Republican reaction to any Democratic proposal that would increase the deficit by $1.5 trillion. But, that’s another story.
A large part of the Republican rhetoric to sell their plan is the claim that the proposed corporate tax cut would enable companies to invest, create jobs, and raise the wages of their employees.
Never mind that those corporations are already raking in record profits which they readily share with already well-paid executives and shareholders, but which they have shown an unwillingness to share with their workers.
Most independent economists have dismissed as unrealistic a report from Donald Trump’s Council of Economic Advisers that the corporate tax cut would increase typical household income between $3,000 to $7,000 a year.
And those independent economists aren’t the only ones who are skeptical about the trickle-down effect of the proposed tax cut.
The general public, including many Republicans, has similar doubts.
As reported in The New York Times, a national survey shows that about 70 percent of self-identified Republicans (and about 68 percent of people who approve of Mr. Trump’s performance) say they don’t think they would get a pay increase.
As most people know: trickle-down economics has never worked and never will.
Nevertheless, most Republicans support the plan. Go figure.
Or consider these facts:
Despite exaggerated claims by Republicans about our current tax rates, in 1969 our federal, state and local governments took in about 26.6 percent of gross domestic product, roughly the same as in 2015 and about the same as the other countries in the Organization for Economic Cooperation and Development in 1969.
But, while our taxation remained about the same, the government’s share of G.D.P. in the other O.E.C.D. countries rose by an average of more than seven percentage points.
In some rich countries, taxpayers now contribute almost 20 percentage points of G.D.P. more to the public coffers than Americans do.
And with those higher taxes, the other O.E.C.D. countries have been able to provide an economic and social safety net for their citizens.
Before you object that the economies of those other countries have suffered from higher taxes, economists say there is no credible evidence that countries with higher tax rates necessarily grow less.
In fact, Lawrence Summers, a former presidential economic adviser, has asserted that the Republican tax plan may actually “retard growth.”
Bottom line: Republican tax “reform” means that taxes will rise for most individuals, especially those in the middle income and lower income brackets (and add about 13 million Americans to the uninsured), in order to pay for the big cuts in taxes on corporations and the superrich.
Moreover, a wide range of experts agree that these tax cuts will probably increase our trade deficit, something that the Trump administration wants to reverse.
And what is the result of this aversion to having corporations and the wealthy pay their fair share?
Without those taxes, our government has proven unable to provide an adequate safety net to protect those members of the working class whom Mr. Trump claims he wants to help.
Without those taxes, we can’t launch that trillion dollar infrastructure program.
Without those taxes, we can’t fund the job retraining programs for people affected by globalization and technological change.
Without those taxes, we have seen a growing gap between the superrich and the rest of us, as the middle class erodes while the rich get richer.
So think about this when you can’t find the line on which to enter your deductions for New York State income taxes and Nassau County property taxes: the higher taxes that you pay will help cover the revenue losses which enable the drastic cuts in taxes paid by corporations and the wealthy.
When you can’t deduct the interest on the student loans that help middle class and lower income families pay for college, remember that the wealthy don’t need those student loans. They just write a check.
When the nation’s budget deficit continues to grow because those rosy Republican economic growth projections don’t materialize, Republicans are sure to regain their fiscal rectitude.
And when they do and they start hacking away at Medicare and other safety net protections, remember that Republicans think corporations and the wealthy need their tax breaks more than you need the government safety net.
And even if you are one of the lucky few who see your taxes cut, remember that your tax cuts will expire in a few years while the corporate tax cuts are permanent.
Instead of blaming immigrants and racial, ethnic and religious minorities for the loss of those formerly well-paying manufacturing and mining jobs, it would be better if populist working class anger were directed at the Republican politicians who continue to serve the interests of wealthy individuals and corporations.
If our government were to invest in a trillion dollar infrastructure program, fund job retraining programs and confront the workplace changes brought on by technological innovations, our country would be in a far better position to meet the challenges of the 21st century global marketplace and address the widening gap between the superrich and the rest of its citizens.
After all, it’s not immigrants and racial, religious and ethnic minorities that are standing in the way. It’s the Republicans.
Perhaps a less stratified society, one in which every citizen has a chance to contribute his or her full potential to the national economy and to be paid a living wage, would give rise to a reduction in the bigotry we are currently experiencing.
And, that would truly make America great again.
Jay Feldman
Port Washington
