It’s taxes again

Walker County Messenger - - Front Page - Ge­orge Reed Jr. An his­tor­i­cal per­spec­tive

tax dur­ing the Civil War, it al­most caused a sec­ond tax re­volt. It was re­pealed at the war’s end. And to­day, com­pared to other de­vel­oped coun­tries, are we re­ally over­taxed as Trump claimed dur­ing the cam­paign?

Among in­dus­tri­al­ly­de­vel­oped na­tions only Chile and Mex­ico pay less taxes as a per­cent­age of na­tional in­come (GDP). How does Trump get by with such out­ra­geous claims? Ei­ther be­cause peo­ple are too lazy to check the facts or don’t re­ally want to know. On a world com­par­i­son scale the Scan­di­na­vian coun­tries pay the high­est taxes, al­most 50 per­cent of GDP. The north­ern Euro­peans are next with levies in the low for­ties and high thir­ties. We pay 26 per­cent. Only the U.S. cor­po­rate rate is com­par­a­tively high at 35 per­cent. But no­body, and I re­peat, no­body ac­tu­ally pays the max­i­mum rate. Through gen­er­ous de­duc­tions, write-offs and other cre­ative loop­holes, many ma­jor Amer­i­can cor­po­ra­tions paid no taxes at all last year, none. Real­is­ti­cally we should bring our cor­po­rate tax struc­ture more in line with the rest of the in­dus­tri­al­ized world and, at the same time, min­i­mize loop­holes. Pfizer Cor­po­ra­tion is ru­mored to be look­ing to a merger with an Ir­ish phar­ma­ceu­ti­cal firm in or­der to move its head­quar­ters there and take ad­van­tage of the lower Ir­ish cor­po­rate tax rate. But the cor­po­rate rate is not Trump’s first or­der of busi­ness.

Talk is be­ing re­vived of a “tax ad­just­ment” which is a code word for an­other healthy tax cut for the wealth­i­est less-than one per­cent and a to­ken re­duc­tion for the rest of us. This is sup­posed to “get the econ­omy mov­ing again.” But I’ll say again, spend­ing and in­vest­ment by the wealthy elite is never in­hib­ited by a short­age of money. But they will in­vest only when they see op­por­tu­ni­ties for in­creased div­i­dends and cap­i­tal growth, not when they sim­ply have more money in their pock­ets. To truly stim­u­late eco­nomic growth tax cuts should be given to the mid­dle-in­come and bluecol­lar folks who will spend it on real es­tate, cars, ap­pli­ances and other con­sumer goods. This spend­ing, not tax cuts for the rich, makes the econ­omy grow. Ge­orge W.’s 2002 and ‘04 “tax ad­just­ments” were fol­lowed by some of the slow­est eco­nomic growth in decades.

Get out your pen or crank up your email and tell your con­gress­men that you want a fair tax cut that truly stim­u­lates the econ­omy, not one pro­posed for the rich­est dudes. Ac­tu­ally, I don’t see how any Amer­i­can can real­is­ti­cally ask for a tax cut any­way con­sid­er­ing the hu­mon­gous re­pair bill for our fast­fail­ing in­fra­struc­ture that is fac­ing us, our failed pub­lic ed­u­ca­tion sys­tem and a Mid­dle East­ern war we can seem to nei­ther win nor end. But that’s an­other sub­ject.

Ge­orge B. Reed Jr., who lives in Rossville, can be reached by email at reed1600@bell­south.net.

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