COMMENTARY: Tax reform jeers may turn to cheers

Pundits have been blasting the GOP tax reform bill, but something tells me that public jeers will turn to cheers as time goes on.

Yes, it’s unfortunate that the legislation passed on strict party lines, but in the polarized political world around us, that seems to be par for the course on “big ideas” these days.

Reasonable tax policy has long been a mainstay of the Republican Party playbook, and this is their latest version of that vision.

Certainly cutting the punitive corporate tax from 35 percent to 21 percent will be good for business in a capitalist country. Freedom and opportunity is the mantra of the United States, and capitalism is a mainstay of that opportunity.

Yes, capitalism causes dislocation, and for nearly a century the federal government has worked hard to create effective programs to offset that dislocation.

But corporate success leads to the so-called rising tide that lifts all boats, and there’s no reason to think the tide won’t rise through additional corporate investment and dollars being brought back into the system from overseas. The fact that the American economy is in such good shape right now is a testament to how global the economy truly is.

Pundits have warned that corporations may not put their newfound tax break into investment, more workers and better wages – but a number of companies have already put a lie to that concern just in the first week. And as one observer put it, even if those moves are just good corporate public relations, they’re still good for the individual worker.

In addition, more than half of America is invested in corporate success through individual accounts, pensions and 401(k) programs, yet another way for individual citizens to reap the rewards.

The vast majority of the country will also benefit from the individual tax cut, although the “war on the wealthy” from the Left continues. Since we live in a Horatio Alger culture of “work hard, get ahead,” that criticism from the Left is always puzzling.

According to the Tax Foundation, using 2014 data, the top 1 percent of individual American wealth pays some 40 percent of total income taxes; while the bottom 50 percent pays not quite 3 percent of all income taxes.

While the GOP “trickle-down” philosophy has been shown to be overblown, there are plenty of economists who consider the whole concern over the national deficit to be a red herring. The current tax cut is expected to add a bit more than 5 percent to that deficit over the next decade.

By that time, politicos may have an electoral incentive not to meddle too much with these new individual tax breaks. Different realities may very well be driving the economy then, too, and perhaps that will call for revised tax adjustments.

Is it politics or economics that is driving the criticism of the GOP tax reform bill? As time goes on, the public may decide that this bill had a significant positive impact on their own economic success.

Dirk Q. Allen is a former opinion page editor of the Hamilton JournalNews. He is a regular contributor.

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