Editorial: Of tax cuts and reality
As the year came to an end, Addison County taxpayers did what they rarely ever do: Rush into their town clerk’s office to pay their property taxes ahead of time — and with a sense of eagerness!
Why? To cash in on a tax deduction that will no longer be allowed in 2018 courtesy of the GOP’s tax bill.
What’s interesting is that the response by taxpayers is a likely harbinger of things to come; that is, nearly everyone — regardless of party — will grab as much of a tax advantage as he or she can when it’s offered or before it expires. What’s also a safe bet is that most people taking advantage of this deduction before it expires in 2018 will put any gain into savings — not rushing out to buy American-made products to boost local jobs.
The wealthiest Americans will likely react much the same for similar reasons. They are more likely to save or reinvest their tax windfalls in the market, than spend it on a whim.
The vast majority of economists have said as much and dismissed the potential economic benefits of the Republican tax cuts. Most have said time and time again that it is exactly the opposite of what the economy needs. To maintain what is already a revved-up economy, any stimulus for individuals should go to the bottom 90 percent, not to the top 10 percent.
Almost every American who understands a lick about the economy knows this. Most Americans also know that the $1.5 trillion in individual tax cuts are not sustainable. The deficit will rage so fiercely in short order that the only sensible move will be to roll back the tax cuts for those who reaped the most benefit (which would also help correct the unseemly income gap that will only worsen under this bill) as soon as possible. That will likely be when Trump is either defeated at the polls or forced to resign from what will surely be impeachment proceedings if the Democrats win control of Congress in 2018. Whichever comes first, four years of these tax cuts (at the most, let’s hope) will be enough to prove their damage.
Trump’s legion of average-income supporters who think the economy will boom because the wealthiest Americans will spend gobs of their newfound money on goods are delusional. The trickle down theory of economic growth has always been a Republican-promoted sham, spread by the very wealthy to create even more wealth for themselves and by Republican ideologues who believe in a smaller government (starve the beast) that would cut funding to Medicare, Medicaid, Social Security and many other programs that help keep American families from being destitute.
A quick review of the growing wage gap in this country between the rich and poor over the past few decades (when the tax rates have been reduced from 70-plus percent on the wealthiest Americans to today’s 39 percent) should make that point obvious. Equally obvious is that the wealthy will use any tax windfall to advance their own riches, not spend it in ways that benefit the poor or middle-class. That’s not a criticism, just reality.
The paradox is that blue-collar workers within the Republican Party fail to grasp what is so obvious and continue to vote against their own economic interest — much to the delight of those wealthy donors who buy elections to support a lifestyle worthy of the rich and famous.
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