by Jason Thiel – Staff Writer
On December 22, 2017, President Trump held and emergency bill signing in order to sign the Tax Cuts and Jobs Act into law. This bill cuts the corporate tax rate from 35% to 21%, effective in 2018. The seven income tax brackets stay, but the rates of each bracket are lowered, the individual tax rate drops to 37%, it doubles the standard deduction, eliminates personal exemptions, and repeals the estate tax. These individual tax changes expire in 2025, but the corporate tax cut is permanent. This is an outraging piece of legislature to be passed at a time like this. To be middle class you should be making $200-250k a year, and the majority of America makes around $100k or less. This bill is going to cripple the middle class while handing huge tax cuts to billionaires and corporations, so that they can stack their money higher and watch the rest of America suffer.
Tax reform is incredibly complicated, and the details of this bill are still being analyzed by the media, but the changes listed are the main tenants of the bill, and create the problem we’ve had in this country with trickle-down economics for the better part of 30 years. Corporations, when given tax cuts and subsidies, do not invest in their employees. Some may invest in some new factories or a new department, but the wealthiest corporations in this nation have the finances to do that whenever they want. One part of this legislature about business that sticks out is that it allows companies to repatriate the collective $2.6 trillion they have held in foreign stockpiles, at a one-time tax rate of 15.5% on funds and 8% the value of physical equipment. This type of ‘tax holiday’ was administered in 2004, and was measured to have not done much to boost the economy. Most companies were reported as distributing repatriation checks to their shareholders, rather their employees, in order to boost investment and increase their stock value. This is the same thing they do with the cuts to their actual tax rate. They may invest a little in employees as PR, to keep enough of the public divided on whether or not trickle-down works, and then they send the rest to their shareholders and executives. This goes to show how we’ve seen this same legislature tried multiple times in recent history, seen it not work, and continued to do it.
To focus a little closer on the legislation for individuals, the Tax Policy Center broke down the bill and determined that it helps higher-income families disproportionately more than the rest. Families and individuals in the lowest-earning fifth of the population would see a .4% income increase. Those in the next highest fifth would see a 1.2% boost, then a 1.6% and 1.9% for the next two-fifths. The highest-earning fifth would receive a 2.9% income boost, which is not where the money needs to be going. This isn’t a tax cut for the working class citizen, it’s a boost to the already thriving members of society. Additionally, the budget-conscious party added $1.5 trillion to the national debt, while creating $700 billion in growth due to the repeal of the ACA individual mandate, which will throw 13 million people off of health insurance because they no longer receive the necessary subsidies needed. This will hike health insurance costs because less people will be able to afford care until they need emergency care, which is exponentially more expensive than preventative care. The U.S. Treasury, which is still a partisan bureaucracy, claims that this bill will bring in $1.8 trillion in new revenue, under the assumption that Trump passes his infrastructure spending plans, deregulation, welfare reform, and other of his promises. In reality, this number is pure speculation, given the current turbulent path of our Commander-in-Chief and his agenda. Given that this revenue is over 10 years, and we already have $20 trillion of debt, it isn’t going to fix the immediate problem of hitting the debt ceiling.
The Tax Cuts and Jobs Act is a disgrace to modern democracy and the rights of people to have a fair shot at earning a living and providing for their families. It gives corporations and rich elites more fiscal power that they don’t need, so they can sit on the money that the common man is sacrificing so much to try to attain. Eugene V. Debs once said, “Those who produce should have, but we know that
those who produce the most – that is, those who work hardest, and at the most difficult and most menial tasks, have the least.” These words couldn’t be truer of today’s world. I’m not advocating for communism or total wealth sharing, but oligarchy and social democracy can’t coexist, and for some reason people think they can.