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A centerpiece of the planned GOP tax overhaul has been to lower the corporate tax rate, which Republicans have argued will push companies to invest more at home.
Right now, the rate stands at 35 percent, with both the House and Senate calling for a reduced rate of 20 percent. The proposed tax plans would also allow companies to repatriate corporate profits at a one-time lower tax rate. Many corporations have used loopholes to avoid paying the 35 percent rate, such as keeping assets in tax havens abroad.
But questions have arisen over whether companies will actually use tax savings and repatriated profits to invest back here. Will that money just go back to shareholders? And how are we going to pay for the services that these taxes have been paying for?
So to get a better sense of the impact of a lower corporate tax rate, we invited two leading economists with opposing views when it comes to the issue.
The American taxpayer will ultimately carry the burden of the Republican tax overhaul, according to Jeffrey Sachs, a professor at Columbia University, senior UN adviser and author.
“What will happen is we will have bulging budget deficits, we will have a fiscal crisis, we will have a downturn in the housing market because they are cutting corporate taxes in part by raising the property taxes,” he pointed out.
Even if tax revenues go down, the government still has bills to pay, and that could mean higher personal taxes or cuts in public services, like infrastructure.
“So the Republicans want us to forget the fact that the starting point of all of this is $1.5 trillion of deficits accumulated over the coming decade,” he said.
Sachs said that we instead need to tax the most profitable companies in the world — think Apple, Amazon, Microsoft and Facebook — and stop their practice of using offshore accounts in tax havens like Ireland, Bermuda or the Cayman Islands.
“But we’re not talking about anything like that,” he noted. “We’re talking about gifts to David and Charles Koch, to Sheldon Adelson, to Robert Mercer. This is not reform. This is a heist.” ..
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(Commoner Call cartoon by Mark L. Taylor, 2017. pen source and free to use with link toe www.thecommonercall.org )
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Bernie: Trump Spewing ‘Total Nonsense’ Over GOP Tax Giveaway for Billionaires
Common Dreams Staff (11/19/17)
Sen. Bernie Sanders (I-Vt.) described President Donald Trump’s claim that Democrats are obstructing progress on tax overhaul efforts in Congress as “total nonsense” on Sunday.
“Democrats,” Sanders told Jake Tapper on CNN’s Face The Nation, “have been shut out of this process just as they were shut out of the healthcare legislation process.”
Going further, Sanders said that Trump “should understand” exactly what’s going on and why Democrats, as well as a large majority of the U.S. public, do not like or trust what the Republicans in Congress are attempting to do with what they call “tax reform” but which progressive critics have identified—and numerousanalyses have shown—as nothing more than a “tax scam” that gives to the rich at the expense of the lower- and middle-classes.
“There is a reason why the billionaire class provides hundreds of millions of dollars in campaign contributions to Republicans. And now is payback time.”
“What this is about,” said Sanders, “is fulfilling Republican promises made to wealthy campaign contributors. There is a reason why the billionaire class provides hundreds of millions of dollars in campaign contributions to Republicans. And now is payback time. What this legislation is about, Jake, is giving 50% of the tax benefits to the top 1% — and at the end of ten years in the House bill, forcing almost 50% of the middle class to actually pay more in taxes.”
“What this tax reform bill is about—absolutely and insanely,” he continued, “is repealing the estate tax; a $265 billion tax break, not for the top 1% but for the top 0.2%—a handful of the wealthiest families in this country, like the Walton family and the Koch brothers.” All of this, Sanders concluded, as the Republicans willingly explode the annual deficit by $1.5 trillion in order to later argue that Social Security, Medicare, and Medicaid must be cut. “This is what [Speaker of the House] Paul Ryan is saying. They’re gonna come back with massive cuts [to those programs], because they say, ‘Oh my goodness, the deficit and the national debt are too high.’ This is a terrible, terrible piece of legislation and it must be defeated.”
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