The actions of people—and especially of government—always have effects that are unanticipated or unintended.

The Law of Unintended Consequences

 

The so-called tax reform and job creation bill working its way through Congress has no chance of producing the type of tax relief or job growth that the President and his Republican minions in Congress are promising the American people!

At the same time, the very wealthy … which appears to include every senior executive in the Administration as well as many members of Congress … will see significant savings as will many of their heirs.

Many members of Congress clearly do not understand economics nor human nature.

Demand for goods and services, not tax breaks, incentivize companies to create jobs!

Moreover, over time, the lion’s share of these tax breaks will accrue to those in the upper income brackets and to large corporations … perhaps, not coincidentally, those with the whose financial resources and political connections have been able to lobby Congress for their ends.

Then we ought to look no further than how the bill’s cheerleader-in-chief might benefit … who has campaigned for this legislation claiming it would be closing “special interest” loopholes, especially those that benefit the affluent.

  • At present, the tax code provides “conservation easements” to owners of land who agree to leave their property undeveloped. The point is to encourage the preservation of forests and farmland, for the public’s benefit.  But, owners of private golf resorts can also access this subsidy, by promising to “conserve” their fairways and putting greens in perpetuity.  Guess who owns many golf courses?
  • Currently, the federal government imposes an excise tax on the use of private planes for every flight an aircraft makes. Under the Republican tax legislation, costs for maintenance and other support activities for the planes would be exempt from the excise tax. Want to guess who owns a giant airplane?

Corporations, many flush with billions in cash, will use tax savings to fund acquisitions, stock buybacks, executive bonuses and increased shareholder dividends … as they have in the past.  It is worthwhile remembering that a company’s fiduciary obligations are to its shareholders … not to its employees or any other interest group.

Further, even under the most optimistic … and unrealistic … Republican projections indicate it will add $1,500,000,000,000 to the national debt!

It is a travesty that the Republican majority in Congress is more intent on passing and sending a bill to the President “before Christmas” … than holding open and objective hearings, being willing to include even a few Democratic recommendations in the crafting process, waiting for and critically weighing independent assessments of the impacts of the legislation on or putting in place any sunset procedures if their overly optimistic assumptions and economic projections fail to be realized.

The implications of this bill, when taken together with the billions the Administration wants to throw at the Defense Department … a sacred cow which if questioned results in accusations of not caring about our military … will require spending cuts in programs which negatively impact the most vulnerable in our society.

If stimulating the economy and jobs are paramount, the overwhelming majority of any tax breaks should go to those at the bottom and middle of the income scale … as they are more likely to spend those additional income dollars which will stimulate new incremental demand for goods and services …  which, in turn, will translate into business having to hire more people at better wages to meet that demand.

It is  no wonder that less than 30% of the American people believe the legislation the GOP is about to vote on will be favorable for middle and lower income earners … and that it is highly slanted to the nation’s wealthiest and major corporations!

Permanently giving billions away to corporate interests blissfully hoping they will respond in unproven ways while tossing temporary monetary crumbs to the “middle class” is not the way to Make America Great Again!