Here
are the 3 main Republican arguments in favor of the Republican tax plan,
followed by the truth.
1. It
will make American corporations competitive with foreign corporations, which
are taxed at a lower rate.
Rubbish.
(1)
American corporations now pay an effective rate (after taking deductions and
tax credits) that’s just about the same as most foreign based corporations pay.
(2)
Most of these other countries also impose a “Value Added Tax” on top of the
corporate tax.
(3)
When we cut our corporate rate from 35% to 20%, other nations will cut their
corporate rates in order to be competitive with us – so we gain nothing anyway.
(4)
Most big American corporations who benefit most from the Republican tax plan
aren’t even “American.” Over 35 percent of their shareholders are foreign
(which means that by cutting corporate taxes we’re giving a big tax cut to
those foreign shareholders). 20 percent of their employees are foreign, while
many Americans work for foreign-based corporations.
(5)
The “competitiveness” of America depends on American workers, not
on “American” corporations. But this tax plan will make it harder to finance
public investments in education, health, and infrastructure, on which the
future competitiveness of American workers depends.
(6)
American corporations already have more money than they know what to do with.
Their profits are at record levels. They’re using them to buy back their shares
of stock, and raise executive pay. That’s what they’ll do with the additional
$1 trillion they’ll receive in this tax cut.
***
2. With
the tax cut, big corporations and the rich will invest and create more jobs.
Baloney.
They didn’t invest. They just bought up more shares of their own stock, and increased executive pay.
(2)
Companies expand and create jobs when there’s more demand for their goods and
services. That demand comes from customers who have the money to buy what
companies sell.
Those customers are primarily the middle class and poor, who spend far more of their incomes than the rich. But this tax bill mostly benefits the rich.
Those customers are primarily the middle class and poor, who spend far more of their incomes than the rich. But this tax bill mostly benefits the rich.
(3)
At a time when the richest 1 percent already have 40 percent of all the wealth
in the country, it’s immoral to give them even more – especially when financed
partly by 13 million low-income Americans who will lose their health coverage
as a result of this tax plan (according to the Congressional Budget Office),
and by subsequent cuts in safety-net programs necessitated by increasing the
deficit by $1.5 trillion.
***
3. It
will give small businesses an incentive to invest and create more jobs.
Untrue.
(1)
At least 85 percent of small businesses earn so little they already pay the
lowest corporate tax rate, which this plan doesn’t change.
(2)
In fact, because the tax plan bestows much larger rewards on big businesses,
they’ll have more ability to use predatory tactics to squeeze small firms and
force them out of business.
***
Don’t
let your Uncle Bob be fooled: Republicans voted for this because their
wealthy patrons demand it.
Their tax plan will weaken our economy for years – reducing demand, widening inequality, and increasing the national debt by at least $1.5 trillion over the next decade.
Their tax plan will weaken our economy for years – reducing demand, widening inequality, and increasing the national debt by at least $1.5 trillion over the next decade.
Shame
on the greedy Republican backers who have engineered this. Shame on Trump and
the Republicans who have lied to the pubic about its consequences.
ROBERT
B. REICH is Chancellor's Professor of Public Policy at the University of
California at Berkeley and Senior Fellow at the Blum Center for Developing
Economies. He served as Secretary of Labor in the Clinton administration, for
which Time Magazine named him one of the ten most effective cabinet secretaries
of the twentieth century. He has written fourteen books, including the best
sellers "Aftershock", "The Work of Nations," and "Beyond
Outrage," and, his most recent, "Saving Capitalism." He is also
a founding editor of the American Prospect magazine, chairman of Common Cause,
a member of the American Academy of Arts and Sciences, and co-creator of the
award-winning documentary, INEQUALITY FOR ALL.
