Taxpayers, You’ve Been Scammed
- 6 years ago
Taxpayers, You’ve Been Scammed
In fact, the usual suspects like Paul Ryan were talking about the need for “entitlement reform” — meaning cuts in Medicare
and Medicaid — to reduce deficits even as they were passing a huge tax cut that will make those deficits much worse.
Yet even before the tax cut, federal tax receipts were looking weak for an economy with low unemployment
and a rising stock market — for example, far lower as a percentage of G. D.P.
Meanwhile, about your companion’s steak dinner: Most of the tax cut actually consisted of
huge tax breaks for corporations, which is in effect a big tax cut for stockholders.
Even the most optimistic analyses suggest that there would be little effect on wages for the first few years, which means
that for now what looks like a tax break for the wealthy is, in fact, a tax break for the wealthy.
Ryan celebrated the tax cut with a tweet about a teacher saving $1.50 a week on her taxes; that’s like
saying you should feel grateful for a “gift” that’s actually being charged to your own credit card.
But wait — weren’t there a lot of stories about companies using the tax cut to give their workers bonuses?
Well, the theory is that lower corporate taxes will draw in lots of money from overseas, which corporations will invest in new plants
and equipment, which will drive up the demand for labor, which will raise wages.
For example, corporations with monopoly power won’t see lower taxes as a reason to invest more; they’ll just take the money.
In fact, the usual suspects like Paul Ryan were talking about the need for “entitlement reform” — meaning cuts in Medicare
and Medicaid — to reduce deficits even as they were passing a huge tax cut that will make those deficits much worse.
Yet even before the tax cut, federal tax receipts were looking weak for an economy with low unemployment
and a rising stock market — for example, far lower as a percentage of G. D.P.
Meanwhile, about your companion’s steak dinner: Most of the tax cut actually consisted of
huge tax breaks for corporations, which is in effect a big tax cut for stockholders.
Even the most optimistic analyses suggest that there would be little effect on wages for the first few years, which means
that for now what looks like a tax break for the wealthy is, in fact, a tax break for the wealthy.
Ryan celebrated the tax cut with a tweet about a teacher saving $1.50 a week on her taxes; that’s like
saying you should feel grateful for a “gift” that’s actually being charged to your own credit card.
But wait — weren’t there a lot of stories about companies using the tax cut to give their workers bonuses?
Well, the theory is that lower corporate taxes will draw in lots of money from overseas, which corporations will invest in new plants
and equipment, which will drive up the demand for labor, which will raise wages.
For example, corporations with monopoly power won’t see lower taxes as a reason to invest more; they’ll just take the money.