By TOM HARALDSEN
By time you read this, the dust will have started to settle on the passage of the Tax Cuts and Jobs Act of 2017 on December 20. It may have already been signed into law by the president. Some of the details of this tax reform program have slowly been unveiled in the weeks leading up to its passage—and many more are yet to come.
Proponents say it will be a huge benefit to American families. Opponents say it will balloon our national deficit, take monies from social programs, and continue the nation’s downward financial spiral.
Who knows? Certainly not me–or the president.
While I am not a fan of almost any part of President Trump’s agenda (or his insistent, misguided and self-serving war with the news media), I do believe that the concept behind tax reform is one that could work in improving the economy and thus the lives of our nation’s citizens. But it’s a huge gamble for Trump—nothing the owner of casinos would be opposed to of course— and it’s one he can’t control. The potential success of this program will by and large depend on what the nation’s corporate leaders, Wall Street Fat Cats and business owners decide to do. Unless they truly reinvest the money they’re going to save on corporate taxes back into the economy, instead of just banking it themselves, we’re toast.
Utah’s Congressional delegation was predictably all smiles and positive posturing as the bill passed. Sen. Mike Lee said “American working families deserve a tax cut and this bill delivers it to them. According to The Washington Post, a Utah family with two kids making the median $62,000 a year would see a $1,675 tax cut. Delivering more take home pay for these working Utahn families is why I voted for this bill.”
Congressman Chris Stewart added that “Today, we made history by passing the largest overhaul of tax reform since 1986. The new tax code is simple, fair, and focused on helping the American people by creating more jobs and bigger paychecks. It will change lives, energize our country, and get our economy thriving again.”
I don’t know if I believe all of that, but I do believe that THEY believe it.
And of course shortly after the final vote, the Doomsdayers were having their say as well. An organization called the FACT Coalition (the acronym meaning Financial Accountability and Corporate Transparency) said the bill will actually encourage U.S. manufacturers to outsource more work abroad, saying companies in the nation “will pay roughly twice as much in taxes as if they move their profits offshore. If they move actual jobs and factories overseas, they could get their taxes down to zero.”
Again, not sure I believe that either, since Trump has touted bringing work back into the country, and a tax plan that doesn’t encourage that makes no sense. But the FACT Coalition believes it.
The problem is that no one—not even President Tweet—really knows if this will make a difference in the long run. Our paychecks may be a bit bigger starting next year. Those who don’t itemize their taxes will certainly find the system easier and their standard deductions higher when they file for 2018. But those are short-term results, or consequences, depending on your political slant. What this all means over time, like 7-10 years down the road when some of these “changes” expire unless they get renewed, is yet to be seen.
Donald Trump was elected on a platform of “change,” of doing things differently than we’ve been doing them in this country for decades—or centuries. He’s certainly conducted his administration that way. But this new program—orchestrated by the president, authored by the partisan members of his party, and passed without fully being vetted, or even read, by many of its supporters–is a huge gamble. Will American businesses do the “right” thing and use their tax savings to hire more employees, pay them better wages and increase their domestic production? Will the average taxpayer spend their increased wages on American goods, products and services? And will the nation’s economy enjoy sustained growth that may lead to permanent tax cuts?
Time will tell if this wager will work. Let’s hope so. After all, it’s our money that’s on the table.