Will Connell: Perspectives
Last December the Institute on Taxation and Economic Policy showed that 400 of the largest corporations in the U.S. paid an effective tax rate of about 11% in 2018. This is the result of the 40% tax cut voted on by the Republican Congress. We also learned that 91 of the Fortune 500 companies, with earnings over $100 billion, paid zero federal income taxes in 2018.
In 2017 corporate tax revenue was $300 billion but conveniently fell to $204 billion the next year. Curiously the federal deficit rose by $205 billion, 26% to a staggering $1 trillion. The bamboozle to the public was that such tax revisions would stimulate economic activity and boost the economy to generate a larger pie of tax revenues. We all now know that this did not happen, and we even knew it before the disruption of the pandemic. Small businesses and middle-income individuals, both critical components for employment creation and consumer spending, suffered. What the tax revisions accomplished, however, was to allow a few large corporations to dominate America’s commerce. This results in shortages in supplies, loss of choice, price fixing, and lower household income.
This past week President Trump is actively working to lower the corporate tax rate from 21% to 20%. This week we learn that more than 10 million workers apply for unemployment benefits. Last week the news indicated that some 40% of children in the U.S. are undergoing food insufficiencies. Mitch McConnell has stated that he will not allow the compromise stimulus bill proposed by the House to be placed in the Senate. No doubt he will endorse the proposal to lower corporate tax rate another one percent. Let’s focus on what is important. The public is learning the perspective of what is most important to Washington maneuvers. Washington’s actions speak louder than its words.
Nobelist Joseph Stiglitz shows in his studies that when economic/political inequalities reach levels we now enjoy, a healthy, normal society is impossible. Make no mistake: There is nothing normal or healthy about political/economic performance that is so blatantly increasing inequality and social disturbance.
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