Letters To The Editor 12/20/2017
Editor: I have encouraged Sen. Pat Toomey and U.S. Rep Tom Marino to be patriots and not vote for the GOP tax bill.
The majority of the country is against this tax bill because it is a giveaway to the rich and hurts lower-and middle-income families. This will hurt the GOP come 2018 election time. The GOP will then make the excuse that the tax bill is not paying for itself and will start cutting Medicare, Social Security, Medicaid and other important social programs. That’s what Bernie Sanders said and it is true because news reports indicate the GOP plans to cut entitlements in 2018 even before seeing how their tax plan will work.
If anything should be cut, it is defense. We spend as much on defense as the next eight countries combined. It should make sense to a reasonable person that defense should be cut gradually over time, not entitlements.
Cutting entitlements means that many people will not be able to afford health care and will lose their resources. It will cause a great social upheaval. There is a huge income disparity now between the rich and poor and this will make it even greater.
What is the hurry with the bill? This change should be thoroughly studied to understand all the aspects of it and not just ram through to make it look like something has been accomplished.
JOHN P. WALSH II
Tax bill perspective
Editor: Here are some points to consider when evaluating the recent federal tax changes:
¦ Corporate tax on earnings is double taxation on the same people, the shareholders, who then pay taxes again on the same money, dividends and capital gains. The effective tax rate is the sum of those two rates. Under the new law, this “effective rate” will be between or slightly above the highest brackets for individuals, 35 percent and 37 percent.
¦ Corporate taxes are paid indirectly by customers through higher prices. A reduction in the effective corporate tax will lower prices in the following way: Earnings will increase initially. That will attract competitors, which will undercut prices. Economists describe this, as a downward shift in the supply curve.
¦ The “tax” that we pay is not just in the tax code passed by Congress. The real tax arises when the government spends. If it spends more than it collects, we pay in two other ways, inflation or debt.
¦ If the U.S. Treasury prints more bills or if the Federal Reserve allows the money supply to grow faster than the amount of goods and services, the resulting inflation will dilute the currency and erode the value of assets.
¦ If the government borrows to fund the deficit, the value of our interest-bearing assets will decrease because future earnings will be jeopardized by the inevitable taxes needed to pay for the debt’s interest.
Editor: The late Sen. Ted Kennedy would have fun at the Republicans’ expense assessing President Donald Trump’s “really great” income tax reform.
I can hear Kennedy’s stentorian voice thundering in the Senate. He might call it “a marvelously Republican idea to enrich corporations and wealthy people now and when big federal deficits loom later, cut Social Security, Medicare and all the rest that help those less-fortunate.”
Voters should be wary about the last-minute gift to gild the president’s first hectic year in office. I’m reminded of the saying, “Be careful what you wish for, you may get it.”
Editor: Republican members of Congress are set to pass a new tax cut bill.
There is nothing new about this bill. It is simply the third incarnation of the failed supply-side economic theory sometimes referred to as the trickle-down theory. During the administrations of President Reagan and George W. Bush, similar tax plans were enacted. In both instances huge deficits were the result.
David Stockman,the architect of the tax bill in the Reagan administration, knew the bill would balloon the deficit. The idea was to create such a large deficit that members of Congress would be forced to look at cutting entitlement programs as a way to reduce the debt. It’s a kind of reverse Robin Hood by taking from the poor to give to the rich.
The theory behind supply-side is if you cut the tax rate of corporations and the wealthy they will reinvest back into their businesses and create more jobs. The idea sounds plausible. However, the bill has no requirement for corporations to actually use the money in that manner. Congress should mandate that corporations account for the number of new plants and jobs in the United States on a yearly basis in order to qualify for their tax cuts.
If the past is a predictor of what will happen most of the tax cut money will simply be pocketed. Job growth will be minimal. Corporate bottom lines will swell. CEO and upper-management ranks will receive huge bonuses and salary increases. Shareholders will be happy as stock prices will rise and dividends will increase.
The federal deficit will once again explode and the GOP will argue that programs such as Social Security and Medicare are not sustainable and must be radically altered. As far as the middle class is concerned, don’t worry about that moisture you feel on your head. It’s not raining you’re just feeling the “trickle.”
Tax cut damage
Editor: If the tax bill passes, we could become a third-world country. The rich will rule and there will be no middle class.
Children now have no insurance because Republicans won’t continue to fund the Children’s Health Insurance Program. More American’s won’t have health care because Republicans want to do away with the Affordable Care Act.
Republicans were always concerned about the rising deficit under Democratic presidents but now don’t even mention it because it is going to increase by $1 trillion after all the tax cuts for the rich and corporations.
President Trump will be among the big winners but the middle class will be among the biggest losers. How will they bring down the deficit? Social Security, Medicare, Medicaid will be cut, social services, Meals on Wheels and programs that senior citizens and the poor rely on will be in the crosshairs.
Corporations will not hire more people or increase wages. It didn’t happen under Presidents Reagan and George W. Bush. Stockholders and CEOs will pocket the tax cut.
Maybe the people who voted for Trump now will wake up because they will be hurt, too.