The GOP’s tax “reform” favors “pass-through” businesses like sole proprietorships, partnerships, limited liability companies and S corporations over individuals. Their new lower rate allows them to escape the higher individual rates most pay. Like what happened in Kansas, wealthy individuals will restructure to skip their fair share of taxes.
Corporate taxes get slashed from 35 percent to 21 percent, well below most new individual rates. And it gets worse: The corporate tax break is permanent, but tax breaks for individuals automatically expire in a few years, making the middle class pay for tax cuts for corporations and “pass-through” businesses.
Martin Feldstein (President Reagan’s chief economist) says economic growth following the 1981 Reagan cut was mainly from slashing interest rates, with no evidence of job creation. Reagan raised taxes 11 times to fight resulting deficits. Bruce Bartlett, who helped develop trickle-down economics in the Reagan era, found that “tax rate reductions do not pay for themselves … they are just excuses to slash spending for the poor when revenues collapse and deficits rise.”
Because these tax cuts will likely increase the national debt by more than $1 trillion, the 2010 “PAYGO” law kicks in, requiring automatic across-the-board cuts to federal programs. These include infrastructure (roads, bridges, water treatment, etc.), crop insurance, rural economic development, Medicare, Medicaid, Social Security, nutrition programs, children’s health insurance, conservation and much more. Kansas’ rural communities are most at risk from resulting budget cuts because we have a disproportionately high older population depending on Medicare and a weak agricultural economy that needs all the federal support it can get.
Tax fairness and programs for infrastructure, science, agriculture, health, environment and education aren’t luxuries to be traded to cut taxes for corporations and wealthy elites, but are investments in keeping America great.
FELIX REVELLO, Larned