The positives in the new GOP tax plan
As the nation gets its first glances at President Donald Trump’s proposed plan to overhaul the U.S. tax system, there are a couple of things to consider positives.
First, critics have cited the negatives. This plan seems unbalanced and the lion’s share of the breaks go to the top earners. That can bring the comments of “Well, that’s who pays the lion’s share of the taxes.” But we hope Congress in its approval process will be careful not to worsen the widening inequality gap in our country. For decades, the wealthy have done extremely well, while the middle class has struggled to keep up with rising healthcare, insurance and other costs. This is the legacy of “trickle down” economics, a Reagan-era strategy that, in some ways, did boost the economy.
But instead of trickling down, gains are made acquiring other companies and going to the top company officials. That’s why we have a gilded situation at some large companies where the top officials made hundreds or thousands of times what ordinary workers do. That’s “tinkle on,” not trickle down.
The positives in this plan deal with simplification and lowering the corporate tax rate to bring back overseas dollars.
Simplification of the tax code seems to be a priority with this plan. Of course, lobbyists for every tax break will be out in force, but simplifying the rate to three tiers and getting rid of (some) deductions would help. As it stands now, the complicated code means few people even try to do their own taxes anymore. There has been a cry for simpler tax codes for decades, but the devil will be in the details.
Another positive is the provision to give a break and let corporations repatriate their profits that are stored overseas. The estimated $2 trillion parked in foreign banks could be used to lend to other businesses, make investments and, maybe even trickle down some through rising wages.
Insisting that we see a big tax on those returning funds means we may never see them again. But returning these dollars will be good for the overall economy.
This plan is a good starting point. Hopefully, a bipartisan effort can be made to improve it and get companies to invest in the U.S. instead of moving production overseas.
Lastly, while tax simplification and repatriation should be a goal, we hope any reductions are not done on the backs of the poor and working class, which seems to be where our legislators in Texas and D.C. first begin to look. – K.E.C.