Corporate tax cuts won’t help workers

The news media have been daily dissecting the Republican House and Senate versions of their tax cut bills to illustrate how they disproportionately favor corporations and their wealthy owners. However, rarely do the media question the need for this legislation that would add $1.5 trillion to the national debt.

Currently, U.S. companies hold $1.94 trillion domestically and $2.5 trillion overseas that is available for investment. To the extent that a U.S. company does not have cash reserves for investment, borrowing costs are low, as is inflation.

Despite Republican claims that U.S. taxes are the world’s highest, studies indicate that the effective tax rates for American companies is not 35 percent, but more in the average range of competing economies at 24 percent.

In January, 156,000 new jobs were created, the 75th consecutive month of job growth. Since 2010, 15.5 million jobs have been created. Unemployment in the prior month was at 4.7 percent, viewed by economists as essentially constituting full employment. Worker pay has been rising, if not as much as many would like.

The Republicans argue that their intention is really to increase middle-class income through corporate investment in new ventures. Some have claimed that annual wages would increase for median workers by as much as $4,000 annually.

If one accepts that highly unlikely scenario, then that goal can be achieved directly without a need for a corporate tax cut. It can be achieved by enacting a $4,000 refundable tax credit to all citizens and their dependents every year and be done more cheaply than the budget-breaking tax bills. MOSHE SCHULDINGER, BOCA RATON