So the next major legislative “push” by President Trump and the GOP looks likely to be what they are calling “tax reform.” And they will undoubtedly attempt to present and sell it as benefitting most if not all Americans, particularly middle and working-class citizens.
But don’t be fooled. Dig a little deeper into their upcoming proposals, and you will inevitably find that they benefit mainly corporations and the very rich at the expense of everyone else – what has frequently been referred to as the “reverse Robin Hood” effect. Sure, they’ll include some small tax breaks for the not-rich to win them over – but these will be illusions, as the associated reductions in revenue will inevitably necessitate cuts in “safety net” programs (e.g., Social Security, Medicare, Medicaid) and other services which help these same moderate-to-low income citizens, resulting in higher (although cleverly hidden/disguised) costs for these individuals.
And, of course, when called out on this disparity Mr. Trump and the GOP will revert to the long discredited “trickle down” theory which holds that more money going to corporations and the wealthy will ultimately “trickle down” to everyone else, while selectively neglecting to mention that there is a complete lack of evidence to support this claim since it first arose in the 1980s with the birth of “Reaganomics.” And it is worth noting that, soon after that, our national debt tripled and we went from being the world’s biggest creditor nation to its biggest debtor nation.
And you will surely hear complaints about the excruciating “tax burden” falling on the corporations and the rich, pointing to the current statutory (for corporations) and marginal (for wealthy individuals) tax rates. However, what they will certainly not point out is that thanks to available deductions, credits, subsidies (derived from our taxes) and loopholes, their “effective” tax rates (actual taxes paid) are significantly lower. Indeed, based on recent data, the average for the top 1% falls just under 25%, while that for corporations is around 19%. Also, when taxes are viewed in terms of the percentage of GDP, among the 34 developed (per the Organization for Economic Co-operation and Development) countries, 2010 data shows that we were the 3rd least taxed at 24.8% (vs. a 33.4% average for the rest).
So… don’t be fooled. Pay close attention, and do some research on your own. And don’t be at all surprised when you discover that the upcoming “tax reform” proposal will actually funnel significantly more wealth to corporations and the already rich – which of course includes Mr. Trump, his corporate-friendly cabinet, the GOP politicians pushing for such “reform,” and the ultra-wealthy individuals and corporations funding them.
Dale E. Buonocore,