Robert Reich continues his crusade against the destructive policies Donald Trump is trying to effect on Americans. He provides five specific reasons why his corporate tax cut is dumb.
The five reasons Robert Reich pointed out are specific and easy to understand by all.
- The White House says the United States has one of the highest corporate tax rates in the world. Baloney. After corporate deductions and tax credits, the typical corporation pays an effective tax rate of 27.9 percent, only a tad higher than the average of 27.7 percent among advanced nations.
- Trump’s corporate tax cut will bust the federal budget. According to the Congress’s own Joint Committee on Taxation, it will reduce federal revenue by $2 trillion over 10 years. This will either require huge cuts in programs for the poor, or additional tax revenues from the rest of us.
- The White House says the tax cuts will create a jump in economic growth that will generate enough new revenue to wipe out any increase in the budget deficit. This is supply-side nonsense. The Congressional Research Service reviewed tax cuts since 1945 and found no evidence they generate economic growth. Ronald Reagan and George W. Bush both cut taxes, and both ended their presidencies with huge budget deficits. Bill Clinton raised taxes, and the economy created more jobs than it did under Bush or Reagan.
- American corporations don’t need a tax cut. They’re already hugely competitive as measured by their profits — which are at near record highs.
- The White House says corporations will use the extra profits they get from the tax cut to invest in more capacity and jobs. Rubbish. They’re now using a large portion of their profits to buy back their shares of stock and to buy other companies, in order to raise their stock prices. There’s no reason to suppose they’ll do any different with even more profits.
Do not be fooled by the Trump and Republican bluster claiming that tax cuts revive economies.. They do not. Every time Republicans have instituted those policies they have tanked our economy. It is likely for that reason that our economy ALWAYS does better under Democratic presidents.
Also published on Medium.