Capitalizing on a good economy

Congress needs to act, to improve things for both business and labor

We sometimes carry on as if labor and management have completely divergent interests.

 

But as the economy improves, both labor and business will do better. Together.

The Gross Domestic Product grew at a more lively 3 percent in the second quarter of the year, the government said last week, revising its earlier estimate of 2.6 percent.

The news indicates an economic expansion that is picking up steam heading into the second half of the year.

And that’s good for both businesses and workers.

“The economy really is getting better,” trumpeted a Washington Post headline, citing two more signs besides the soaring stock market.

“Food stamp usage is down, and spending on entertainment – everything from Netflix to Disney World trips – is up,” the Post reported.

This, despite the fact that Congress has yet to pass either health care or tax reform. How much more robust might the economy be if government took less of a chunk out of it?

Well, consider: The Bureau of Labor Statistics said last week that Americans spend more on taxes than they do on food and clothing combined.

Mindful that Congress returns to work on Tuesday, President Trump last week touted tax reform in a speech in Springfield, Mo. His broad-brush goals:

Simplification: “Trump said the average taxpayer shouldn’t need professional help to file a tax return and should be able to file their taxes on a single page,” USA Today reported.

Reducing the top corporate tax rate to 15 percent from the current 35 percent – the highest in the developed world.

Cutting tax rates for middle-income Americans. “Trump was actually less specific on this provision than he was in April, when he proposed cutting the top tax rate from 39.6 percent to 35 percent and reducing the number of brackets from seven to three,” USA Today wrote.

Tax repatriation – reducing the taxes on overseas corporate profits, should companies “repatriate” those funds and bring them home. There is said to be $3 trillion in offshore profits sitting there.

Whatever Washington ends up doing, it needs to act – in order to capitalize on an economy that is good, but with a little looser rein could be great.

It has the potential to be better for everyone, labor and management alike.

Fact is, it’s arguably American labor that put Donald Trump in the White House. Normally a reliably Democrat voting bloc, labor swung toward Trump last November.

“The 2016 exit polls show that 43 percent of those in union households voted for Mr. Trump,” notes public affairs expert Richard Berman in The Washington Times. “In Ohio, he won the union vote by 9 percentage points after President Obama carried the state’s union households by 23 percent in 2012.

“For Big Labor, it was a harsh reminder that union membership’s political preferences are far less monolithic than union leadership’s. Employees rejected their union representatives’ staunch support for Hillary Clinton, demonstrating that they can act in their own self-interest – even when it diverges from the union elite’s.”

The economy, indeed, is where all our interests converge.

 

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