In Sunday’s Augusta Chronicle, an op-ed piece by Ed Conant (“Growing debt, rewarding the wealthy, overstimulating the economy a disaster”) sharply criticized a proposed Republican tax bill that reduces corporate tax rates, changes individual tax brackets, and phases out some current deductions.
Mr. Conant bashes this bill for the following reasons: unpopularity in the polls; congressional Joint Committee on Taxation projections unfavorable to the middle class while favoring the wealthy; increasing the national debt; overheating the economy by putting too much money in circulation; large corporations’ hoarding increasing amounts of money; and no Democratic party support.
The first concern crumbles on the shaky evidence that most contemporary political opinion polls (remember those of the 2016 presidential campaign) can still provide meaningful data.
Secondly, the tax revenue projections of the Congressional Joint Committee on Taxation have been wrong considerably more often than they have been right.
The third point assumes the government would do nothing to control federal spending, as was the case during the Obama administration, when there is plenty of opportunity to reexamine programs and departments that cost a lot of money and produce very little. For some sectors and groups, tax revenues may actually increase.
Reduced tax rates during the Reagan administration discouraged tax avoidance and actually exposed more of the income of the highest-tier earners. Lower taxes would also stimulate more businesses, create more jobs and, de facto, produce more tax revenue.
The nightmare of overheating the economy assumes that more money for taxpayers would automatically trigger an increased demand for goods and services that outstrips their supply and result in higher rates of inflation. While this could happen, many wishing to retire in fiscally sound condition would place as much of their “found” money as possible into retirement funds (not affected by this bill) and/or pay down current debts.
It is also antithetical to believe that large corporations would simply “sit on” increased profits without reinvesting in their businesses as would be expected by their boards and shareholders.
If Mr. Conant is troubled by the lack of Democratic support of the bill, so be it, as it remains unlikely that any Republican-proposed legislation about any major issue will receive support from this lemmings-to-the-sea opposition party.
Mr. Conant’s assessment of the new tax bill also omits some inconvenient facts. While the top 10 percent of income earners take home 45 percent of the country’s income, they also pay 70 percent of federal taxes. While most of this group would receive the greatest absolute benefits from the new tax bill, after tabulating the tax credits that are enhanced and the others that remain undisturbed, the future does not look so bad for middle-income taxpayers either.
Those interested in seeing how this newly passed bill might affect their own federal taxes in the coming year can find a simple tax calculator at www. MarketWatch.com. They might be pleasantly surprised.
Unlike the Affordable Care Act, which was foisted on our country four years ago and is truly unaffordable, putting more money in the pockets of the vast majority of Americans seems like a long-overdue legislative action.
Oh, and lest I forget, Mr. Conant did not mention that this recently passed tax bill repeals the ACA’s individual mandate that many Americans have long considered to be an unconstitutional abrogation of individual rights.