Greg Stephen | USA
The GOP’s new tax bill is -quite arguably- a massive success so far, but what exactly IS this attempt at tax reform anyways, what is its end goal, and what is it doing wrong? Is it just one big malicious attempt by corrupt and crony Republicans at allowing the evil capitalist CEO overlords to exploit the masses?
Quickly put, the answer to that last question is one big fat no. The tax bill isn’t meant to just help the rich and wealthy, even though at first glance it may seem like it. The theory is called trickle-down economics, or Reaganomics (after President Ronald Reagan who was president during the first time this theory was implemented in American economics), and you may have been hearing these terms quite frequently over the past few weeks. You also may have been hearing that this theory has never worked for the people before (which history most vehemently disagrees with, see the Reagan era), or simply cannot work in modern times due to a different economic “landscape”, as you could put it. What this theory truly is is that through tax cuts for wealthy CEOs, these heads of corporations would have more money to spend on their businesses, and in turn increase wages and boost the economy.
After this bill passing through the Legislative Branch, Democrats alongside fiscal liberals of all kinds are completely losing it. Fiscal leftists have the idea that these CEOs will use the money, of which they are now not being forced to pay to the government with the threat of being locked in a cell if they don’t comply, to simply buy things for themselves. This, however, would be very counterintuitive considering that they could make even more money if they pooled their newly found savings into growing their business and then making even more money. A few questions for those who believe this: if these CEOs are so greedy and money-hungry, why would they pass up a chance at growing their businesses and making more money? Also, why wouldn’t these CEOs give their workers higher wages and better working conditions if other companies are doing this, which they in fact now are, thus minimizing the risk of losing their workforce to competitors?
So far, just like during the Reagan era, everything is going according to plan. Dozens of large companies, for instance, AT&T and Comcast among many others, have been increasing wages and making working conditions better for their workforce, thus giving these workers more buying power while spending on other businesses themselves and in essence stimulating the economy by, and to say the absolute very least, a lot. However, is this really as far as we can go?
Sure, this is a great leap in the right direction as well as surefire, objective proof that reducing taxes on the wealthy is a good idea in not only theory but in practice, but what else could we do? One looming threat that, even in success, this tax cut poses is that it can and will increase our national debt. What one option that’s most certainly on the table (and mind you, one that can and will increase liberty) is to cut spending. You know, that thing that House and Senate Republicans always say they’re going to do, but never really do it? The survival of the new GOP tax reform bill may be just enough incentive for the Republican Party to truly follow through on all of their economic promises. If the Trump administration, alongside GOP representatives and senators, really do want to secure their seats and positions of power in the coming elections in 2018 and 2020, then they need to truly live up to their titles as fiscal conservatives and cut reckless and needless spending across the board. If they do this, then we could possibly see even more economically beneficial tax cuts down the line during the Trump presidency.
For instance, why just cut taxes on the wealthy? Why not cut income taxes for not only CEOs, but lower and middle-class workers, alongside cutting needless and reckless spending on unnecessary programs? The benefits here would be countless, most importantly increasing average citizen’s buying power, thus stimulating the economy even more so.
So, in conclusion, Trump’s newly passed trickle-down tax reform bill is, again, quite arguably one big success so far, but has two major issues; first of which being that without cutting spending the bill won’t last very long, second of which being that it’s a step in the right direction, but doesn’t maximize the full potential prosperity of a supply-side economic policy. For now, all we can really do is wait and hope that Republican senators and representatives will make the right decisions to maximise the capitalist potential of what this bill could start. Here’s to the GOP not screwing this huge chance at a true capitalist society up, and here’s to capitalism and the prosperity it can, and will, most indefinitely bring.