Pretending To Help The Poor Through Tax Reform

TAX REFORM is difficult, because it involves the most sacred of human assets, money, and who has it, who renders it unto government, and what the government does with it in terms of allocating it. When people are dealing with money, especially their own, they become deeply emotionally involved, protective, and often angry. Thus major federal tax reform happens only infrequently, and although it is supposedly on the verge of happening now, we shall see. The plan before congress is pure republican, and few if any democrats are likely to cooperate. Plus, there is a growing number of reasonable republicans who are increasingly inclined to oppose whatever Trump proposes, merely because he is Trump, and by definition unreasonable. The republican tax plan is a fraud. Their intent to lower corporate tax rates is a not so well disguised scheme to lower taxes on the wealthy, a standard conservative agenda item. Changing the corporate rate from thirty five percent to twenty percent seems a bit extreme; it would probably require only a much less decrease to keep companies in the United States, and to lure back those that have left. After all, doing business headquartered in America is a singular and wonderful privilege, and does not require carrots and sticks. In countries where the corporate rate is lower than in the U.S., the individual rate on the wealthy, and everyone else, is considerably higher than in America. As a concession to progressives, the income tax rate on the extremely wealthy will apparently remain at around thirty five percent, much lower than in Europe, whereas it had been scheduled to be lowered. The money saved by large corporations and all businesses through lower business taxes, say the conservatives, will be reinvested in the economy, with higher levels of production, more jobs, and higher salaries, and more money for the poor working class. This is the same tired argument used by Ronald Reagan in the most recent tax reform thirty years ago, and it is a lie. Enhanced corporate wealth will in fact be channeled into the bank accounts of shareholders and executives, and since eighty percent of corporate stock shares are in the hands of the top few percent of the population, corporate tax breaks are nothing other than a gift to the already very wealthy. Middle class tax cuts under the current plan will be offset, slyly, by a reduction in standard deductions; the middle class will end up paying more in taxes, the very wealthy, who tend to fund republican politicians, will be made even richer. The gap between the rich and the rest of us, as always in supply side economics, will only increase, since the wealth never seems to trickle down, but remains bottlenecked at the very top. Our only recourse is to remove supply side conservatives from office, and to replace them with leaders who genuinely want to help the middle and poor class, rather than pretend to do so.