Letter to the Editor: Trickle down fantasies
To the Editor:
Remember when our federal government’s current majority party promised that its tax cut program would pay for itself and raise all workers’ boats? Guess what? The Treasury Department recently announced that the federal budget deficit for the 2018 fiscal year grew to $779 billion, a 17 percent increase.
Because the tax plan cut the top corporation tax rate from 35 percent to 21 percent, their tax revenues are down by over 30 percent. In the fiscal year 2017, corporate tax revenues were $297 billion, but in 2018, they were down to $205 billion.
Workers were told that the tax cuts would fill their bank accounts, but most of the cuts went to the wealthiest top one percent of families who will receive an average tax cut saving of $51,140. Families earning $25,000 or less will save $60 on their federal taxes, and families earning between $48,600 and $86,100 will save $930.
All the growth in corporate wealth, we were told, would be used to expand the businesses, invest in research, and raise workers’ pay. However, companies spent much of their tax windfall on buying their own stock. Stock buybacks, of course, raise the business’s stock price, which is great for the company shareholders and the executives (many of whom are compensated with stock). Apple, for example, spent $45 billion on buybacks in the first six months of the year. Meanwhile, wages are up by 2.9 percent, but after adjusting for inflation, the increase is only 0.2 percent.
And, of course, now that the federal budget deficit is increasing, that majority party is claiming that we have to cut entitlements (i.e. Social Security and Medicare). Senate Majority Leader Mitch McConnell of Kentucky recently told Bloomberg that entitlements were the cause of the increased deficit. President Trump told his Cabinet this week to come up with proposals to cut their agencies’ spending by five percent.
Hopefully, this old con game of tax cut trickle down will no longer fool the voters, and we will show our displeasure at the ballot box.
Thomas W. Hill
Lansing
