The GOP tax “reforms” have gotten so ridiculous that most Americans are catching on to the game that they’re playing. The Republican “trickle down” theory of economics that’s been in use since at least Reagan is not fooling as many people now because history has shown that giving tax cuts to businesses in the belief that they will create more jobs has never panned out. They just make more money for themselves. Big businesses don’t need tax cuts – they’re already making record profits. The current tax rate for corporations is 35%, but many corporations don’t really pay that much. Looking at the Fortune 500 companies for the 8 years from 2008 to 2015, 258 of the corporations paid an effective rate of 21.2%. Eighteen of those companies paid no federal income tax in those years, while 48 had a tax rate of 10%. Three-fourths of small businesses are not corporations, so they pay tax at the personal rate of the owner, somewhere between 13.3% to 26.9 %. If the GOP is so concerned about the little guys being successful, why have they set the corporate tax rate at 20% for big businesses and 25% for small businesses? Also, cutting the corporate tax rate would actually provide a windfall to the foreign owners of 35% of U.S. equities amounting to $700 billion in the next ten years.
What’s really behind this push for tax reform? The push for tax reform is simply to feed the greed of the 1%, to make the rich richer and the poor poorer. In doing so, the Republicans hope to fulfill a longtime goal of getting rid of social safety nets such as Social Security, Medicare, and Medicaid, as well as agencies that protect us (such as the Environmental Protection Agency and the Department of Education) or look out for our publicly owned lands (such as the National Park Service). The strategy they’ve been using for a long time is called starving the beast which in reality we should call starving the people. It works like this – they cut the funds to a program, say the EPA, using the excuse that the deficit is too big. (Never mind that the budget for an agency like the EPA is a drop in the bucket compared to defense spending. That’s not what they’re really worried about.) The fund-starved EPA can then no longer provide the level of protection it needs to and citizens suffer from polluted air or water fouled by toxic spills. The EPA looks like it’s being ineffective, when in reality it’s doing the best it can with less funds. People get mad and say it’s not doing it’s job. Rather than correcting the situation by increasing funding, the Republicans turn this into “it’s not working, so let’s get rid of it altogether”, which makes their polluting corporate donors happy. They can make more money at our expense. It’s feeding the greedy with no concern for ordinary people.
The GOP plan doesn’t even make much of a pretense of wanting to help out the 99%. It eliminates student loan tax breaks, deductions for teachers who spend their own money on classroom supplies, and medical deductions which hits those with major medical expenses the most. (Of course we could do away with this deduction if we had national healthcare, but the GOP doesn’t want to consider that.) Several tax breaks that help with the expense of adopting children have also been eliminated by the Republicans, the party that fights family planning by defunding Planned Parenthood and fighting against insurance for birth control. Who is going to adopt all those unplanned children? Reducing credits for renewable energy projects makes no sense in a world fighting to reduce fossil fuel use in the combat against the climate crisis. The average American will lose a lot under the so-called reforms while the rich gain even more with repeal of the estate tax. Americans are seeing this GOP plan for what it is – a grab for more money by the greedy 1%. Carl Spoerer will work for real tax reform for the people, reforms that truly help the working people of this country.