When
the Republican tax plan was signed into law near the end of 2017 we were told
that the lower tax rates on business would allow them to keep more of their
profits and pour money back into jobs in the United States and employee pay.
Six months in the year of 2018 and it seems that the tax plan was not working
as sold. The Bureau of Labor Statistics stated the following:
Real
average hourly earnings were unchanged, seasonally adjusted, from May 2017 to
May 2018. Combined with a 0.3- percent increase in the average workweek, real average
weekly earnings increased by 0.3 percent over this period.
So
if increased profits from companies paying lower taxes didn’t go to workers in
the form of higher wages, where did that extra money go. Large public companies
use their additional profits to buy their own stock back and pay dividends to
their shareholders. As warned by many, the trickle down of trickle-down
economics never happened, but according to the Congressional Budget Office the
tax plan is pushing the United States towards a debt disaster:
At
78 percent of gross domestic product (GDP), federal debt held by the public is
now at its highest level since shortly after World War II. If current laws
generally remained unchanged, CBO projects, growing budget deficits would boost
that debt sharply over the next 30 years; it would approach 100 percent of GDP
by the end of the next decade and 152 percent by 2048. That amount would be the
highest in the nation’s history by far. Moreover, if lawmakers changed current
law to maintain certain policies now in place—preventing a significant increase
in individual income taxes in 2026, for example—the result would be even larger
increases in debt. The prospect of large and growing debt poses substantial
risks for the nation and presents policymakers with significant challenges.
Many
Americans are cheering the politicians enacting these budget busting and
economic crisis inducing policies, so where is the pushback from those of means
with platforms? The current tax plan is structured to pump a lot of money into
the bank accounts of those at the top of the economic ladder and has bought
their silence. As for the rest who will shoulder the debt, get no pay raises
and possibly have their Medicare and Social Security cut to lower the
self-inflicted deficit, the message is like Trump said about his meal with
China’s President Xi,”It was the most beautiful piece of chocolate cake.”
It
seems, like Marie-Antoinette, Trump is saying let them eat the most beautiful
piece of chocolate cake.
Photo
of cake authored by Carl Black from Decatur, GA, US - Creative Commons
Attribution-Share Alike 2.0 Generic license
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