The goal of the Tax Cuts and Jobs Act is to stimulate the economy and create more and better jobs. The ideal result would be a stronger American economy, based on increased manufacturing, providing good jobs that pay well without requiring higher education. Just like it used to be. It the core of Trump’s promise to Make America Great Again.
But its not what we got. What we have is a bill that rewards industries who invest in automation, but does nothing to encourage employment of more workers. And, by all analyses, it will transfer wealth from the middle class to the richest of Americans. The Republicans say that this is because the wealthy pay the most taxes, so if there is a tax cut, they will reap the largest benefits – there’s no other way to do it. That is nonsense.
Its easy to create a tax system that doesn’t reward the ultra rich. Just go back to the way it used to be when America was great. In 1965, top federal tax rate on regular income (on income over $200,000) was 70%!! And the top Corporate tax rate was 48%!! And in 1965, America WAS GREAT. At the time, our percentage of the world’s GDP was 38%, compared to 25% now. And these rates held until the early 1980s, as did America’s manufacturing preeminence in the world. In fact, the gradual lowering of the top rate to 50% in the early 1980s to 38.5% in 1987 coincided with the beginning of the decline of American manufacturing and the hollowing out of the middle class.
And what did the US do with the income it received from these taxes? It INVESTED in itself – in infrastructure, in education, in scientific research, and of course in the military. Today, we only invest in one of these – the military – because, as John Boehner used to say, “we’re broke”. But we’re only broke because we choose to be. If we return to the tax rates of when America was at its strongest, we could balance the Federal budget and have enough leftover to invest in ourselves – and Make America Great Again.
So why don’t the Republicans and Trump support such an idea? Because they are completely subservient to their wealthy donors – and those donors expect a return on their large investment. The Republicans don’t have any intention of fulfilling their promises to the middle class. The only question is – will their supporters realize the truth?