Ron Wackowski: The big lie is a demagogue’s best friend
December 11, 2017
Thanks to Steven Hofman for his referral to/summary of the letter "How tax reform will lift the economy." The letter is quite wonky, as Mr. Hofman promised. However, I have some issues to bring up.
First, one letter doesn't form a consensus. Just as the administration points to "climate experts" who don't accept human activity speeding climate change, there are economic experts who believe tax cuts will jump-start the economy. However, seven of the letter's nine authors held positions in former Republican administrations. Is it surprising that they subscribe to the "trickle-down" theory; tax breaks at the top help those at the bottom?
Also, at least two of the letter's authors were or are still on corporate boards of directors. Experience and knowledge should be a prerequisite to sit on boards, so they add value to this conversation. However, they have compensatory interest in the outcome.
Second, I like measures to encourage businesses to invest in the U.S. Most citizens would. I also like efforts to simplify taxes and make them fairer. However, the tax bills are very complicated and were rushed through providing no time for debate or input.
Here are specific issues:
- NPR reports (source: Joint Committee on Taxation, Senate Budget Committee) 21.6 percent of proposed tax benefits go to those making over $1 million (0.3 percent of tax filers). Is this a middle-class tax cut?
- Why eliminate or scale back the estate tax while taxing graduate students on the value of scholarships? Estate taxes impact couples with an estate of over $11 million. Only 0.2 percent of citizens are subject to estate taxes (according to the Tax Foundation). To help farm/ranch/small business owners impacted by this tax, exempt them through legislation.
- Why reduce the top tax bracket and then eliminate the deduction for supplies bought by teachers for their students?
- Why do President Trump and others insist the corporate tax cuts will result in increased wages? Corporate profits have gone from $1 trillion in 2008 to $1.6 trillion in 2016 (according to Tradingeconomics.com and the U.S. Bureau of Economic Analysis) but workers have seen "sub-3 percent wage growth" (according to Mr. Hofman)? Why haven't corporate CEOs raised wages? Many companies prefer to "grow the dividend."
- Why repeal the individual mandate for health insurance? This will likely result in increased premiums for those who buy insurance.
- Is it fair for real estate developers (like our President) to use "pass-through entities" to reduce their tax rate to a maximum 29.6 percent (currently 39.6 percent), while employees receiving a gift card from their company have to claim it as income? The non-partisan Tax Policy Center calls this "a Donald Trump loophole."
- Why accelerate tax cuts and not re-authorize the Child Health Insurance Program? Senator Hatch said "But the reason CHIP's having trouble is because we don't have money anymore…"
- Why do middle-class tax cuts expire but corporate tax cuts do not? Is there concern that the deficit will balloon?
- Hofman suggests that Ms. Bush used many "Democratic National Committee talking points." Let's be honest … lower taxes (especially for the wealthy), less government and more business-tilted policies could all easily be called "Republican National Committee talking points."
I have lost confidence in the Republican leaders of the House and Senate, and yes, the President and his cabinet. They have sold this as a "really great" benefit for the middle class. Based on the process followed and what we now see as tax reform, would you blame me if I didn't believe a word they said? I quote Mr. Hofman from an April 2016 Today opinion piece: "The big lie is a demagogue's best friend."
Recommended Stories For You