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How Will the Senate Tax Bill Affect the American People?
by Countable
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  • JTK

    Similar tax cuts were a demonstrated failure in Kansas. The Legislature eventually had to admit that and reverse them to keep adequately funding their schools. The problem was that the corporations and others who received the benefit weren't held accountable for reinvesting the funds in new industry and jobs. Similar to what I see in the Federal plan. That said, we can expect most of the funds from the corporate tax cut and offshore repatriation of profits to go toward stock buy backs, which boost share prices and executive bonuses. Maybe some will go to dividends. But, that hasn't been the corporate trend lately. Although increased share prices and increased dividends will have a positive impact on 401Ks, most of the benefit will go to the mega stock holders, hedge funds and institutional investors. Without a mechanism to tie the reduced tax rate to investment, it is doubtful the US will see much impact on brick and mortar manufacturing or high wage employment. In addition, so far there is no information to suggest that any reinvestment of the windfall would be tied to investment in the US, instead of low wage countries per the status quo. Overall, cutting taxes to stimulate economic growth has merit. But, the proposed plan is just a dressed up windfall to the investor class and corporate donors, with a few temporary scraps passed out to the rest of us.

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