The Tax Cuts Were a Good Thing - We Need to Make Them Permanent
Hey everyone!
We're both gone this week, but I wanted to release the audio version of an article from our website.
Yes, the tax cuts were a good thing. An amendment to make them permanent would be even betterI've read a few articles lately about how the "Tax Cuts and Jobs Act" of 2017 isn't having the desired effect. First, I'd ague that they have had a great effect on the economy, but let's dissect why they aren't looking as good in action as they did on paper.
The Trump tax cuts were a big win for big corporations, as well as a big win for all the small corporations that we seem to ignore. The corporate tax rate was reduced from 35% to 22.5%, equaling a reduction of roughly 33% in the tax rate owed by businesses.
Republicans branded this tax cut as a major win for America. It was going to lead to higher wages, more jobs, and the repatriation of funds and operations back to the good ole U.S. of A. Since the enactment of this law, we've seen reports of 3.9% business investment growth, but as we normally see afterwards, a revised number that sits around 3.1%. In addition to that, wages paid by companies seem to have shown little movement in the process.
To me, this logic is simple. If you want to actually see the effects that were advertised by Republican's in the passage of this law, the tax cuts have to be made permanent.Imagine you are the owner of a business. You run on roughly an 8% net profit margin yearly (the average for a Fortune 500 company), and now you've seen a 33% reduction in your corporate tax rate. You have a few options: Raise your employees wages, Re-invest money in future innovation, or take the profit and run, among other things.
There's an issue with expecting businesses to raise their wages in response to these cuts; they are temporary. How many times have you expected your wage to go down after your company's profit margin decreased? --- Support this podcast: https://anchor.fm/goodmorningliberty/support
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