Be Informed About the Tax Reform

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Tom Toles

Tom Toles Editorial Cartoon

Dana Scharrer, Editorial Board

Are trickle-down economics the answer? Not likely. Republican presidents such as Herbert Hoover, Ronald Reagan and George W. Bush have attempted, and failed, at incorporating the legislation already. It’s believed Hoover’s attempt led to the Great Depression by supporting the wealthy and not the poor. However, Donald Trump’s new tax reform is a trickle down system said to send massive tax cuts to the lower and middle class.

The concept behind trickle-down economics is to send tax cuts to businesses so they can use the money to create new jobs and better business for America. Companies can also give more bonuses, higher wages, and better benefits. Unfortunately, greedy businessmen typically keep majority of the money saved for themselves, which is exactly why President Trump (a business owner) would create a trickle-down system. “So there’s a great spirit for [the tax reform], people want to see it, and I call it tax cuts. It is tax reform also, but I call it tax cuts. It’ll be the biggest cuts ever in the history of this country,” he said. What he should be saying is, it’s a tax cut for the wealthy.

So far, only 15 of the Fortune 500 have raised wages or have given a bonus to workers. The Fortune 500 is the annual list of the most profitable U.S. industrial companies, and they’ve been known to have a lot of power in legislation (even more so during republican presidencies). Companies like Wells Fargo have increased their wage to $15/hour and will give $400 million to community and nonprofit organizations this year. Fortunately, it’s still early and many companies are saying they will do the same. Unfortunately, an estimated 4.6 million middle class Americans will see an increase in taxes by 2025 under Trump’s new tax brackets. Although most Americans take home wages will be higher, they are still bound to lose money by paying more in taxes than before. Companies like Wells Fargo, despite increasing wages and giving bonuses, will still benefit from massive tax cuts.

The scary thing is, companies aren’t giving nearly as much to workers and new jobs as necessary. With $86 billion in stock buybacks, the highest number since August, the rich are estimated to get richer.

Why should high school students care? Well, a majority of blue collar workers are expected to pay more in taxes, which includes many parents of students here. Any low income or middle class families will most likely see a tax increase, which could potentially make financial situations for families here more difficult. Children’s Health Insurance Program (CHIP) was created two decades ago to make sure children whose parents don’t make enough, but make too much to qualify for Medicaid, get health insurance for their children. This costs nothing for the parents. The Senate decided to let this expire on Sept. 30, leaving states flying through their remaining money. Pennsylvania could be one of the first states to lose all funding, potentially affecting students here and in the surrounding areas.

The biggest take back from the new plan is this: the Trump administration has created a plan that will appear to work at first, making it seem like a big accomplishment, before companies start really taking advantage of their new money. The wage gap between the poor and rich will only get bigger, however Trump will continue to show America the big things companies are doing, rather than showing the everyday people suffering.