Valley Views for Oct. 13, 2021
‘Trickle down economics’ simply do not work
It’s time to help working Montanans
In a recent guest column, State Senator Greg Hertz (Republican, Polson) decried the Biden administration’s call to restore the federal corporate tax rate to a reasonable level, still lower than it was prior to 2017. Hertz reiterates the same tired arguments his Republican colleagues have recited for years – that tax breaks for big, out-of-state corporations will stimulate the economy and that increases in their tax rate will simply be passed on to workers and their families. History, however, clearly shows that “trickle down economics” simply do not work.
Republicans in Washington DC pushed through the GOP tax breaks in 2017. The corporate tax rate was made permanent, while the modest individual income tax cuts for working Americans will expire in 2025. Additionally, the GOP plan immediately adjusted income tax withholding to give workers the appearance of a larger paycheck, resulting in many taxpayers finding they owed taxes the following April. While Hertz implies that big, multinational corporations are paying too much in federal taxes, dozens of the country’s wealthiest corporations paid no federal tax last year by exploiting every available loophole.
Republicans would ask you to believe that corporate tax breaks will lead to higher wages for workers and an increased corporate investment in jobs and manufacturing. Neither have been proven to be true. In fact, independent analysis of the GOP tax breaks indicate that they are expanding the federal deficit by $2 trillion this decade. Ironically, Republicans in Congress are currently shirking their responsibility to raise the debt ceiling, a necessary move to prevent the country from defaulting on the very debt we have accrued as a result of the GOP tax breaks.
According to an independent report, “An analysis of Fortune 500 companies found that just 20 percent of increased cashflow (the corporate tax cut windfall) in 2018 was spent on increasing capital expenditures or research and development. The remaining 80 percent of cashflow went to investors through buybacks, dividends, and other planning adjustments.” The 2017 GOP tax breaks simply consolidated more wealth in the hands of a few, lining the pockets of shareholders at everyone else’s expense.
The Biden administration’s Build Back Better initiative, coupled with the infrastructure bill, will stimulate the American economy. Thousands of workers will be employed to rebuild our crumbling infrastructure and expand broadband access to underserved rural communities. These dollars will roll over through our economy multiple times. Medicare will be enhanced, expanding to include dental and vision care as well as sustaining our rural hospitals. Expanded childcare credits will afford parents, primarily mothers, the opportunity to return to the workforce. Expanded educational opportunities will raise the prospects for all Americans.
Hertz and his Republican colleagues show us their priority is to cling to the failed policies of the past where a nurse pays more in taxes than a big corporation or its executives. Now, however, is the time to invest in America’s future.