The United States Congress just passed a massive tax bill that will affect every American and reshape the economy for years to come.
This bill is a disaster. It does exactly the opposite of what Americans need.
The benefit of this bill is based on the premise that lowering taxes on corporations will prompt them to hire more workers and raise wages. But, according to a Center of Budget and Policy Priorities report, “the bulk of corporate rate cuts goes to the owners of corporate and other types of capital — not workers.” They’re more likely to pay out stocks and give bonuses to executives than give raises to the average worker.
According to the Institute on Taxation and Economic Policy, “258 corporations paid an effective federal income tax rate of 21.2 percent over an eight-year period, slightly over half the statutory 35 percent tax rate.” Large, hugely-profitable companies keep their profits overseas to avoid paying their share in taxes.
The rate these corporations are expected to pay will drop from 35 percent to 20 percent with the new bill. What they actually pay is sure to drop too.
Republicans are rewarding the last group that needs a tax break. Faceless corporations known to avoid taxes however possible will reap the most benefits while hard-working Americans making five-figure salaries get a much lower tax break.
There’s no reason the corporate tax rate should be lower than the majority of personal tax rates.
Prioritizing companies over people, CEOs over workers, and rich over poor is not just bad policy; it’s inhumane.
Common sense is ignored in this bill though. The goal of creating jobs sounds noble but is misguided. Tax breaks aren’t what the American economy needs right now. The United States current unemployment rate is 4.1 percent, a 17-year low.
This tax bill will only increase income inequality. After all, according to The New York Times, the richest one percent in the United States own more wealth than the bottom 90 percent. Yet, with the Republicans’ tax bill, people earning over $500,000 will receive the largest tax cut of roughly 2.5 percent.
Wealthy people will benefit the most from the tax breaks in the bill. So, instead of fighting income inequality, this tax bill will only increase the disparity between the super-rich and the middle-class. The rich will get richer.
This bill will especially hurt young people. Most young people are students or just beginning their careers, so they won’t benefit much from the tax savings. The tax cuts are scheduled to end in 2025. Down the road, young Americans will feel the negative effects of this bill. A larger national debt and fewer domestic social programs will hold the younger generation back economically for decades to come.
The people who stand to gain from this bill are the ones who need it least. This bill would be a disaster for millions of middle-class Americans, at the mercy of lawmakers ignoring the needs of many, for the benefit of a few.