Six months ago Congress passed a major tax bill that President Trump eagerly signed with a promise that the average American family would get a $4000 raise due to their taxes being cut and raises or bonuses from their employers.
Employers were supposed to pass on much of their tax cuts to workers and thus increase consumer demand for goods and services that would grow the economy.
But that’s not how big businesses and multinational companies have used their 40% corporate tax rate cut. Instead these businesses used their windfall to buy back stocks in their own company to artificially increase the value of those stocks to the benefit of shareholders and company executives.
And for the record, 90% of small businesses are not corporations. We didn’t get these excessive benefits from the GOP tax law and to this day we still don’t know what benefits might trickle down to us. As a result, with only a few exceptions, small businesses cannot give raises or hire more employees due to the tax law.
The bottom line is that the average American family has not seen anything resembling a $4000 raise or even half of that since the law passed six month ago.
But what the average American family is getting is up to a $1.9 trillion increase in the nation debt over the next 10 years, according to the latest projection by the Congressional Budget Office. Most of that is simply to give a giant tax rate cut to corporations that is being used to enrich their shareholders and executives.
Republicans in Congress knew that the tax law they passed would create this increase in the debt but they went forward anyway.
And now at the six-month anniversary of the corporate tax cut law, Congressional Republicans want to do something to bring down the debt, not by reversing the giant corporate tax rate cut but by cutting benefits relied upon by Americans who need and deserve the help.
“The time is now for our Congress to step up and confront the biggest challenge to our society,” said House Budget Chairman Steve Womack (R-Ark.). “There is not a bigger enemy on the domestic side than the debt and deficits.”
So, House Republicans are proposing a budget that cuts Medicare by $537 billion over the next 10 years. That would make up for over a quarter of the national debt increase created by the corporate tax rate cut.
Cuts in other programs, including Social Security, that benefit Americans would reduce the deficit approximately $1.5 trillion over the next decade.
So, let’s review.
Congressional Republicans and President Trump gave big corporations a guaranteed 40% cut in their federal tax rate, which is primarily responsible for increasing the national debt by $1.9 trillion over 10 years.
These corporations and multi-national businesses used most of this new-found profit to benefit their shareholders and executives.
Small businesses have no idea what reduced taxes they will pay.
Only a relatively few workers received bonuses or raises.
Consumer demand that drives the success of small businesses has not increased.
And now to pay for the corporate tax rate cut Republicans in Congress want to cut Medicare, Social Security and other social programs.
Clearly, the biggest enemy for the average American is not the national debt.
It is the policies of this Republican Congress that will explode that debt simply to benefit big business—not the average American.