Tag: corporate tax rates

Taxing distortions

In a Twitter post, North Carolina Sen. Thom Tillis this week called out a Washington Post reporter’s visit to Burlington, NC, where he sought to demonstrate that pending Republican legislation to cut taxes and liberate businesses offers little relief to the little guy. The premise of the Post report is that the state’s tax cutting endeavors have done next to nothing to help small business so, by extension, federal tax relief is likely to have minimal impact going forward.

The Post obviously assigned the reporter to find a rural business owner who is, for whatever reason, an unhappy camper in a state where many businesses are thriving, and into which new businesses are relocating.

The extremes to which the Left is going to stop the unleashing of the full potential of the American economy is not limited to the corrupt mainstream media. It is seeping into our own community.

Apparently, it is the policy of our local liberal house organ, The Pilot newspaper, to allow a reader to submit a letter-to-the-editor that does little more than regurgitate extreme Left Wing talking points. There is scarcely a thread of truth in this missive by the misinformed Ms. MeNeish. She laments over “a few years of tiny (tax) cuts”. About half the U.S. population pays no federal or state taxes, thus can not be granted a “cut”. The highest producers (in the 39.6% bracket) are not likely to see a federal tax cut, even a tiny one, and some very high earners might find themselves in a new 45% bracket, pending the final terms of the bill. The author also claims tax reform will “make it harder for young people to go to college”. This obviously is drawn from warnings by people such as University of North Carolina President Maragaret Spellings who oppose the removal of tax deductions for private giving (to schools such as UNC). But why does she assume that, for example, a UNC alum who owns a successful business, would not give more to the school as his tax burden declines, even absent a deduction for his charitable activity? This seems to suggest that her alums care little about the institution but give only to add a deduction to their filings. Quite an insult. How, you ask, does the elimination of private giving deductions “make it harder for young people to go to college”? Because the Left accepts that tuitions must continue to skyrocket and, thus, youngsters will need academic scholarships more than ever. Left unsaid is that many of these scholarships go to students who are not U.S. citizens.

Ms. MeNeish also wrings her wrists about tax reform burdening “our children and grandchildren with more than $1 trillion in addtional federal debt.” This is based on models that are typically inaccurate and on the smear campaign now being waged by billionaire investor Tom Steyer, who writes this week in the Wall Street Journal that tax cuts for “the wealthy” will be “paid for with money taken out of the pockets of working Americans and their children.” This outlook defies the outcomes of the economic impact of the last sweeping reform, under President Reagan in 1986, which handed President Clinton a booming economy throughout the 1990s. Projected debt increases under the current government spending trajectory — apart from tax reform becoming reality — far exceed $1 trillion over the next decade (the Congressional Budget Office estimates $10 million). Easy to dismiss, apparently. But, worse, her misgivings also conveniently ignore the $9 trillion in federal debt added during the eight unchecked years of spending under President Obama. Are her children and grandchildren somehow unscathed by Obama’s reckless legacy?

Reform terrifies tax addicts

High profile individuals in American society when caught engaging in criminal, deviant or unethical activity disappear into rehab programs, hoping to recast themselves as victims. Addicts are sympathetic figures, the thinking goes.

But how are we to feel about addicts who won’t/can’t seek treatment? In the case of tax addicted Washington politicians on the left, they should be judged as scoundrels, at the very least. How else to characterize tax-and-spend zealots such as Sen. Elizabeth Warren (D-MA), who says the Trump administration’s proposed tax cuts are “just plain immoral.”

Warren and her fellow tax revenue addicts break into sweats at the mention of tax cuts like alcoholics hearing suggestions of a return to Prohibition. They always fall back on the same tired rant. Tax cuts benefit only the richest Americans and give little relief to working class citizens (as if Warren, Senate Minority Leader Chuck Schumer, et al, actually know any such people). Corporate tax cuts only enrich the titans, not the factory workers. On and on they drone.

That’s why Republicans need to do a better job when it comes to promoting the actual effects of the tax cuts they propose under President Trump. They need to be very specific about the objectives of cutting taxes by drawing on jaw dropping data neatly summarized by columnist Walter E. Williams writing for DailySignal.com, “The Facts About Who Pays the Most in Taxes in America”.

Thirty-seven million tax filers have no tax obligation at all. (That’s 45.5% of American households). … These Americans become natural constituencies for big-spending (Democrat) politicians. After all, if you don’t pay federal taxes, what do you care about big spending?

But the average hard working American typically does not fixate on federal spending and national debt. That’s Washington insider stuff. Working class Americans want a path to higher wages and upward mobility within their chosen industry. The surest way to make that a realistic goal is to ease the tax burden on American corporations.

Williams deftly points out that the current 38.91% tax on U.S. corporate earnings, the fourth-highest in the world, is a tax on living, breathing people. A corporate tax cut potentially has more impact on a middle-class family than a tax cut on its take-home pay. Democrats refuse to acknowledge this because, of course, the narrative must always be that corporations are evil.

If a tax is levied on a corporation, it will have one of four responses or some combination thereof. It will raise the price of its product, lower dividends, cut salaries, or lay off workers. In each case, a flesh-and-blood person bears the tax burden.

The messaging is really simple. President Trump and fellow Republicans must not be trapped into using empty jargon when talking about tax reform.

More than 45% of American households pay zero federal income tax. Just say it. Less than 1% of the population, according to data Williams cites, pays 70.6% of federal income taxes. Just say it, while advocating for some relief for these folks, too. But most importantly, just say that a significant corporate tax rate cut from about 39% to 20% will open floodgates of higher wages and greater upward mobility for working class Americans.

If passing real tax cuts means that scores of Congressional Democrats disappear to enter fiscal rehab, just think of what that would do to ease gridlock in Washington.