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Posted by on May 8, 2017 in 2016 Elections, Breaking News, Budget, Economy, Government, Politics | 0 comments

Still The Party Of No (Taxes)

The Republican Party has been steadfast in opposition to taxes for decades, claiming that cutting taxes results in greater economic growth. This is in spite of the fact that economic growth soared after taxes increases by Bill Clinton and Lyndon Johnson, while tax cuts with two wars during George W. Bush’s term was responsible for ballooning of the deficits and partially for the Great Recession. Tax cuts or increases alone during a president’s time in office cannot alone be blamed for economic strength or woes as there are many other confounding elements.

Gasoline taxes which have paid for road repairs and new highways have not been raised for a quarter of a century, even as America’s infrastructure has been in the process of crumbling. Civil engineers rate the infrastructure as a D and note that $4 trillion dollars are needed to bring it up to par. America’s system is worse than many of the poorer nations in Europe, without even considering modernization of mass transit with high speed trains like Europe, Japan, and China. Billions of dollars are wasted every year by commuters stuck in traffic and delays in the transportation of goods. This is in addition to ancient subways, water and sewage systems in dire need of updating. President Trump has promised a trillion dollars for infrastructure work, which is not nearly enough. But where is the revenue going to come from without raising taxes. Is the nation going to just keep piling on more debt?

The recent health care bill passed by the House was really about raising taxes for the rich, even though it would devastate many poor people with increased premiums, especially those who are middle-aged or with pre-existing conditions. The extra revenue saved by eliminating Obamacare could pay for some of the tax cuts that Trump has promised and would make it revenue neutral.

The Republicans would like to eliminate the estate tax, which they call the death tax, and cut income and corporate taxes dramatically. Cutting corporate taxes might be a reasonable idea to make it equitable with other countries, if all the special deductions were disallowed. This could stop inversions and bring money home from abroad. The estate tax, however, should be raised significantly for estates over some number of millions.

There is no reason why children should inherit billions of dollars when they did nothing to help acquire these sums. With more and more discretionary income, the children could keep growing their wealth from generation to generation, increasing societal inequality. In addition, certain of the most affluent individuals and family use their riches to influence political choices at every level of government in America with politicians willing to accede to their wishes. This usually means further lowering of taxes on the wealthy and special considerations for the businesses they own. America is already on its way to becoming a plutocracy and unless the transfer of vast amounts of wealth is reduced, the process will accelerate.

Too much redistribution of wealth is not necessarily a good idea in today’s capitalist societies, as it may have a negative effect on worker’s ethos if they have too much income without having to work. On the other hand, a strong safety net including health care, social security, disability insurance, and workman’s compensation should be available to every citizen in developed nations including America, which necessitates higher taxes. At some point in the future, when automation cuts the number of available jobs and many individuals will be unable to work, a minimum guaranteed income will have to be provided by the government in combination with businesses in order to keep people alive. The only way this can happen will be through increased taxes on the wealthy, on consumption of luxury goods, and growth of corporate taxes in a unified fashion in all advanced nations, so the burden will be shared equally. Getting it done will not be easy. Perhaps even conservative Republicans will realize there is no other way.

Resurrecting Democracy

www.robertlevinebooks.com
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