Trump will unveil his tax “reform” plan

Trump will unveil his tax “reform” plan Wednesday. Part of it is a huge cut in the corporate tax rate, from 35 percent to 15 percent, in order to “make the United States more competitive.”
This is truly dumb, for 5 reasons:

1. The White House says the United States has one of the highest corporate tax rates in the world. Baloney. After corporate deductions and tax credits, the typical corporation pays an effective tax rate of 27.9 percent, only a tad higher than the average of 27.7 percent among advanced nations.

2. Trump's corporate tax cut will will bust the federal budget. The nonpartisan Tax Policy Center projects that it will reduce federal revenue by $2.4 trillion over 10 years. This will either require huge cuts in programs for the poor, or additional tax revenues from the rest of us.

3. The White House says the tax cuts will create a jump in economic growth that will generate enough new revenue to wipe out any increase in the budget deficit. This is supply-side nonsense. Ronald Reagan and George W. Bush both cut taxes, and both ended their presidencies with huge budget deficits.

4. American corporations don’t need a tax cut. They’re already hugely competitive as measured by their profits – which are at record highs.

5. The White House says corporations will use the extra profits they get from the tax cut to invest in more capacity and jobs. Rubbish. They’re now using a large portion of their profits to buy back their shares of stock and to buy other companies, in order to raise their stock prices. There’s no reason to suppose they’ll do any different with even more profits.

Don't fall for Trump's corporate tax plan. It will be a huge windfall for corporations and a huge burden on ordinary Americans.

What do you think?

Robert Reich

http://footprintsstrategies.com