For the first two weeks of April, taxpayers in Henry County were busy doing their taxes. Many are angry that the promised cornucopia of tax benefits has not positively affected them. And, they should be – given what was promised by Congressman Ferguson and his ilk.
Rep. Ferguson indicated (4-14-19) that the GOP “Tax Cut for the Wealthy Act” (officially mistitled the Tax Cuts and Jobs Act, TCJA) passed in Dec. 2017, was a blessing for: “Americans across the economic spectrum.” He was right about it being transformative, but wrong about beneficiaries, who are primarily the wealthy and big corporations.
Rep. Ferguson also writes about: “pro-growth policies are making it possible for Americans to succeed.” Sir, you are no conservative; stop pretending. You and your GOP colleagues controlling Congress managed to cut taxes while significantly increasing spending (especially military).
As any Accounting 101 student can tell you, if you cut revenue and increase expenses, you create debt. That’s not conservative, that’s irresponsible! Americans are only “succeeding” in passing debt along to their children.
And, that is exactly what you have done. Our annual deficit has gone up significantly in recent years under a supposedly conservative Republican Congress and is projected to reach $984 billion by the end of this year, over double the $438 billion figure in 2015 under Obama. Since the TCJA will directly increase our national deficit by nearly $2 trillion over the next ten years (Tax Policy Center, 12-18), more than one such law would bankrupt the nation.
You and your GOP colleagues stated that the TCJA would create higher wages, empowering the middle class. Again, unless you live in a neighborhood of millionaires, that is not accurate. Wealthy taxpayers with incomes in the top 1% got an average annual tax cut of 3.4%, $51,000. Those with incomes of less than $25,000 only got $60, less than one half of 1%. Middle income families only received a tax cut of $900, 1.6%.
Rep. Ferguson believes small business would be helped by the TCJA with businesses: “passing their tax reform savings along to workers.” That just didn’t happen, and Ferguson provides no facts to back up his assertion.
I suppose he was pleased because the original Act as approved by the GOP House would eliminate the death tax on small business owners. However, prior to the TCJA, the estate tax only affected very wealthy business owners who left estates of more than $5,490,000 … and double that for a couple. The final TCJA as signed by Trump gives a full exemption of $22,360,000 for a couple … not exactly the small businessman you were led to believe would benefit. The TCJA is set up to help doctors, lawyers and business chiefs … not the little guy with a landscaping business.
As for corporations, the TCJA reduced the corporate rate from 35% to 21%, the lowest since 1939. Supposedly, a large proportion of the additional profits were going to rank and file employees, but in most cases that did not happen. Since the passage of TCJA, there have been a record number of mergers. Corporations are increasing dividends to shareholders (wealthier Americans) and doing stock buy backs, none of which help the hourly worker.
The TCJA was just a continuation of “voo doo economics” to use Bush 41’s term. Supply side economics (Reaganomics) has been thoroughly discredited. Tax cuts in the long run don’t pay for themselves, as any decent economist will tell you.
When Reagan tried it, he ended up raising taxes multiple times to offset his earlier cuts. Bush 41 raised taxes further to attempt to balance an out of whack budget deficit caused by the Reagan tax cuts.
As Ha-Joon Chang, economist and author, stated “Once you realize that trickle-down economics does not work, you will see the excessive tax cuts for the rich as what they are – a simple upward redistribution of income, rather than a way to make all of us richer.” You would have thought that Ferguson and the GOP would have learned, but obviously they did not. What ever happened to the fiscal conservatives in the Republican Party?
