Inside The Tax-Cut = Job Growth Myth

Jay OwenGreen Prosperity

By Hedrick Smith

Washington – Riding a tide of tax cuts and rising profits over four decades, the captains of Corporate America have shifted $1 trillion each year from the paychecks of middle class Americans into massive payoffs to Wall Street investors and CEO pay packages. And now they want you to believe, once again, that cutting corporate taxes will benefit average workers.

Measured against the historical record, that’s a hollow claim that borders on economic fake news. Factually, it flies in the face of the actual performance of American business, which over the past 40 years has generated what Citibank once called the greatest inequality of income in any major nation since 16th century Spain.

In 2012, the Congressional Research Service published a report that bluntly debunked the pet conservative notion that lowering tax rates boosts economic growth. “The reduction in the top tax rates appears to be uncorrelated with saving, investment and productivity growth,” the congressional tax report concluded. Instead, it said, lower tax rates fuel economic inequality.

Channeling Tax Cuts to Wall Street

More recently, the rationale for President Trump’s tax-cut plan was shot down by a survey of business leaders who were asked by an international accounting firm how they would use tax savings. Most U.S. multinationals told the survey that they had no intention of investing windfall gains from tax cuts on growth, more jobs or higher wages. Only 23% said they would do that. The large majority said they would pass on their tax savings to investors through higher dividends and stock buybacks.

But none of that evidence has deterred President Trump, the pro-business Republican…[Read More]