CBC Editorial: Friday, Dec. 1, 2017; Editorial # 8243
The following is the opinion of Capitol Broadcasting Company
Imagine the scene in a Fortune 500 company boardroom next year if Congress does pass the tax changes now being considered:
The CEO announces to the board of directors that the company has more cash in the bank than ever. The board: Heaps praise on the CEO; Okay’s multi-million-dollar bonuses for the top executives; Approves a huge stock buyback, Seeks out mergers and acquisitions. Meanwhile, they lay off workers in companies that are merged or acquired and, maybe, provide laborers and staff workers with a 2-percent raise.
THAT is reality in corporate America — NOT the wishful fantasy that is driving Republicans toward passage of their misbegotten tax package.
It is a fantasy reinforced by myth-makers like North Carolina Sen. Thom Tillis, who recently told a classroom of fourth graders that the state has been “thriving” since state legislators (when he was Speaker of the state House of Representatives) passed a tax overhaul in 2013. “I’m completely convinced when we pass this bill we’re going to completely unleash the power of the American economy and we’re going do for the families across this nation what we started doing for the families in North Carolina five years ago.”
The families he must be talking about are the state’s corporate CEOs and others in the most-upper of income brackets. He doesn’t mention the impact on average North Carolinians who: Haven’t seen a significant increase in their buying power; Are paying higher sales taxes; Have suffered stagnant spending in public schools and universities and; Are getting less in government services.
It is simply NOT TRUE that tax cuts lead to economic growth. Putting more cash in the hands of the general consuming public (through things like increasing the minimum wage and pay increases) stimulates MORE SPENDING. Increasing purchasing power is how the nation climbed out of the Depression in the 1930s. We’d be climbing out of the Great Recession at a far faster pace if there was more consumer spending now.
Another major problem is that the plan in Congress cuts taxes but continues current spending. This contorted congressional thinking is that tax cuts will spur wage increases and greater consumer spending – thus yielding greater tax collections. That flat-earth trickle-down theory is, as former President…