Friday September 14, 2018
Leadership in Washington focused on helping wealthy.
When Republicans proposed a massive tax cut for corporations and wealthy families, they promised voters many benefits: increased investment, higher wages and a tax cut that pays for itself. Now, eight months after President Donald Trump signed the bill into law, we can evaluate it.
The most notable outcome of the tax law is that companies are buying back their own stock. Stock buybacks are expected to reach a record $1 trillion this year. Since Congress reduced the top federal tax rate from 35 to 21 percent, businesses are flush with cash. Share buybacks have an appeal to executives but do little for workers, most of whom own little or no stock. With so many firms focusing on buying back stock, the prediction that tax cuts would encourage spending on equipment and factories, has not come to pass.
What happened to the promise of big raises for workers? Wages did go up by 2.7 percent, but the cost of living increased by 2.9 percent. Trying to live on stagnant wages while housing costs, gas prices and medical costs continue to rise is no easy task.
Over the coming years the federal debt could triple if the tax cut becomes permanent. With the midterm elections approaching, many Republicans realize that the tax cut has become a political liability.
Richard A. Weiherer
Workers gain little from latest tax cuts