We all know that as a matter of dogma, nothing is more important to Republicans than tax cuts for corporations (which leads to more money for rich people), you know: Trickle Down or VooDoo Economics 101. Saint Ronnie convinced them that the cocktail napkin Laffer Curve was real, and it’s been tits-to-the-wind ever since, no matter how often it is proved that it doesn’t work. See Brownback, Sam and the cratered economy of What’s the Matter With Kansas.
During the 2016 Goat Rodeo, the Russian Usurper campaigned on lowering the corporate tax rate to 15%, and it looks like Randian fanboi and noted Zombie-eyed Granny-Starver are still trying to get there.
So I’m sure that this report is not going to be well received: Trump’s corporate tax plan will add trillions to US debt, report finds:
Donald Trump’s plans to reduce the corporate tax rate from 35% to 20% will result in a revenue loss of $3tn to $7tn for the federal government over a decade and are unlikely to create the promised boom in jobs, according to a new report from the non-partisan Committee for a Responsible Federal Budget.
…But the Washington thinktank found that the cuts were unnecessary as well as exorbitantly costly. The study looked at 92 publicly-traded corporations that reported consistent profitability between 2008 and 2015, and found that they already benefitted from low effective tax rates, paying less than 20% of that net income to the federal government in tax.
Ryan and Trump have argued that a lower tax burden will help create more jobs, but the study argues that these companies are already paying the lower level of taxes and have not created more jobs. In fact, while the total rate of job creation among the US private sector as a whole was 6%, these 92 companies saw a 1% decline in employment. They are creating jobs at a slower rate than the economy, in spite of having precisely this “Goldilocks” tax rate.
I’m not an economist, but even I know that supply and demand usually are involved in making hiring decisions. If consumers want more of something, then the company ramps up making more of the thing.
If you give Corporate America a big pile of money, they don’t go on hiring sprees, they buy back their stocks and compensate the boardroom for their good luck; or maybe they buy up smaller companies and fire people for synergy.
The same thing happens each time there is a repatriation scheme to bring overseas profits home.