Trump tax cuts ‘swamped’
Individuals left in cold
WELL,
despite the initial positive proposal, the Trump Tax Plan has been hijacked by the House and Senate and is now at risk of becoming ObamaCare 2.0.
I get that members of the House and Senate feel beholden to lobbyists and big donors. But they didn’t exactly suffer the last eight years under Obamanomics, despite its anemic 1.6 percent average gross domestic product growth.
We all remember then- President Obama telling us time and time again that under ObamaCare the average family would save $2,500 a year. And, well — that never happened.
Donald Trump the candidate actively campaigned on tax cuts.
However, he supported tax cuts only if they resulted in more money in the bank for hardworking Americans.
President Trump clearly did not campaign on what I am framing as “deduction reduction” for individuals. And he should not stand idly by while the Senate and House distort his tax-cut plan in the name of “reform.”
In fact, the “reform” plans released by Capitol Hill are starting to look more like a transfer of the benefits of many workers’ deductions to the already bulging balance sheets of big business.
For starters, the corporate tax cut and associated reforms should have been a totally separate bill from the individual-tax one.
Undertaking a complete overhaul of the tax code requires a certain level of economic intellect and experience to comprehend how certain items will actually play out in the real world. There are not nearly enough qualified members of key con- gressional committees with the real-world business expertise to know all the implications.
Team Trump also needs to move off its corporate tax rate “redline” of 20 percent to, say, something more like 21.5 or 22.5 percent. This would free up more available savings for American households and be much better for the entire US economy.
To be sure, corporate America does need a lower tax rate to compete globally.
But it also needs the American consumer to increase purchases and demand for their products, goods and services. The lack of growth under Obama was never about tapped-out companies.
No, it was about tapped-out and squeezed consumers who were not able to buy corporate America’s offerings.
Lower corporate taxes and a smarter lighter regulatory landscape will tilt global investment dollars towards America, but only if it’s met with an upswing in consumer demand.
Under ObamaCare, the largest economic benefits went to the big insurance companies. Just compare their stock performance versus the market as a whole since the so-wrongly named Affordable Care Act was passed.
Trump had better be careful that the creatures of the swamp he so loathed on the campaign trail don’t end up turning his tax plan into something like ObamaCare, in which the individual taxpayer gets taken to the cleaners while big business gets all the perks. Again.
Trump also needs to remember that he has achieved two consecutive quarters of 3 percent growth in the GDP without tax “reform” or “deduction reduction.”
Any deviation from helping middle America with a tax cut could send economic growth back to Obama-era levels.