With profits soaring to record levels and net investment near record low, giving corporations more cash makes absolutely no sense because it won’t lead to job creation. But Donald Trump and his Republican allies in Congress think the wealthy don’t have quite enough money yet. So, on Wednesday, they rolled out a plan for another big tax cut for guys like Trump.
But Americans are fully aware that this tax cut is not for the middle class and wonder why they are bothering with tax cuts for corporations when there are so many other more pressing problems.
There may have been a time, a generation ago, when cutting tax rates was the most popular thing a politician could do. But that day is long gone. I guess you might say Americans are tired of tax cuts, there have been so many and it never trickles down to hard-working Americans.
Today, most Americans aren’t clamoring for lower taxes, probably because nearly half of Americans owe no federal income tax at all.
Americans do pay taxes: payroll taxes to fund Social Security and Medicare, tariffs, excise taxes, corporate taxes, property taxes, sales taxes, state and local income taxes, and so on. But if they have a problem with taxes, it’s not with the federal income tax.
So a bill that cuts federal income taxes for middle-class is a sad way of camouflaging the real intent of the bill: Giving millions of dollars to the very wealthy, who happen to be the only people who are really benefiting from our uneven economic growth.
House Speaker Paul Ryan calls tax cuts the “secret sauce” for a better economy. But that the secret sauce is just the same old ketchup and mayo.
But the gimmick could backfire on Republicans and Trump knows it. So he has built an escape hatch from his own tax plan, resisting the framework that had been cooked up by congressional leaders, plus economic adviser Gary Cohn and Steve Mnuchin, Axios reported.
On Monday, there were some tense moments for Republicans at both ends of Pennsylvania Avenue, as word got out Trump wasn’t thrilled with the framework, according to Axios. The situation left Republicans on the Hill genuinely uneasy and thought there was a chance Trump wouldn’t sign off.
If Trump shows the fickleness he showed on repeal-and-replace (championing the House plan, then later calling it “mean”), that could increase the chances the plan sinks, with him blaming Congress.
Some conservative Republicans worry about a “nightmare scenario” for the party: no health care repeal and no tax reform.
Tax reform is now an existential issue for House Speaker Ryan and Senate Leader McConnell. If they botch this, as they did health care, both chambers could lose their Republican majorities.