Surprise, surprise, the Republican Party’s latest proposed framework for tax cuts will overwhelmingly benefit the uber-wealthy at the expense of the rest of us. It’s estimated that over half of the benefits will go to the richest 1 percent of taxpayers initially, increasing to about 80 percent after 10 years.
Some major areas of concern in the current proposal are: the lowering of the top marginal tax rate from 39.6 percent to 35 percent while increasing the minimum tax rate from 10 percent to 12 percent; the slashing of the corporate tax rate from 35 percent to 20 percent — note the current effective corporate rate is around 15 percent; eliminating the estate tax, a tax that only affects individuals with wealth of $5.5 million or families with wealth of $11 million; and allowing corporate profits sitting outside the U.S. to be repatriated at a much lower tax rate. In brief, the proposed tax cuts are based on the failed idea of trickle-down economics that has repeatedly been shown to harm the public interest.
For example, in the 1980s, President Ronald Reagan slashed the top marginal individual tax rates from 70.1 percent to 28.4 percent. His policies almost tripled the national debt and transformed the U.S. from the largest creditor nation to the world’s largest debtor. President George W. Bush’s tax cuts and other policies again transferred money from the rest of us to those at the top of the wealth ladder while doubling the national debt. Kansas provides a more recent and similar experience with tax cuts in 2012. Imagine these previous tax cut programs on steroids and you have the current Republican proposal.
During both the Reagan and Bush administrations, Congress also passed bills increasing the military budget. The combination of cutting tax revenue while increasing the military budget led to a huge shortfall in funds for other programs.
Once the wealthy and the military had received much more money, Congress then began to express concern about budget deficits and the size of the national debt. Programs designed to benefit the common good such as Social Security, Medicare and Medicaid were targets for cuts. The rationale was that we cannot afford these programs at their current funding levels given the budget deficit and the national debt. If the current horrific proposal gets through, we can expect more of the same.
It is crucial that we get involved and let our members of Congress know that we oppose this tax cut proposal. You can reach Sen. Cory Gardner at 202-224-5941, Sen. Michael Bennet at 202-224-5852 and Rep. Jared Polis at 202-225-2161.
The Rocky Mountain Peace and Justice Center’s “Peace Train” runs every Friday in the Colorado Daily.