The corporate tax rate in the United States is 35%. After deductions and loopholes are used the tax rate that most corporations pay is only 14%. Corporate profits after taxes are taken out are at an all time high. The effective tax rate that these corporations are paying is at 1979 levels. Corporations have deferred much of their profits abroad to the extent that $2.5 “TRILLION” now sit offshore untaxed! Paul Ryan’s “Better Way” tax reform intends to grow the economy by arguing that corporate tax cuts will result in companies expanding resulting in more jobs. This is foolish thinking as these corporations are awash in cash from 20 years of huge profits. They have all of the money on hand that they need to expand their companies. They will simply pocket the tax cuts and increase their wealth as there is no increased demand that would warrant expansion.
Ryan’s tax proposal would have 76% of the benefits go to the top 1% in the first year and by year 10 nearly 100% of the tax cuts end up with the top 1% .Ryan claims that corporate tax cuts will spur economic growth by encouraging investment. Economic theory and data however indicates that the cuts would benefit a small number of high income capital owners while low and middle income workers would continue to see hourly pay lag far behind the rising income inequality.
If Ryan truly wants to spur economic growth a lump sum tax cut shared equally for all income earners would result in benefits for the lower 60 % of American households 10 times larger than Ryan’s plan and would result in tax cuts for the top 1% that were 99 per cent smaller. Currently our economy remains below full employment as aggregate demand [spending by households, businesses and governments] is too low for companies to add employees. Only by getting more money into the hands of consumers will we increase demand as corporate tax rate cuts are passed through to shareholders not the public who does the consumption needed to increase demand.
To reform corporate tax policy to benefit the vast majority of Americans, not just those at the top, we should be closing the loopholes that have eroded the corporate income tax base so that the corporate sector is paying their appropriate share of taxes based on their historically high profits and low taxes over the past 25 years!
All other developed nations realize that healthcare coverage cannot be on a ‘for profit” basis and still restrain the rising costs of medical care and simultaneously increase access to quality care. In other words healthcare coverage cannot be sold on the open market such as cereal and still provide adequate care. We rarely know when a medical emergency is going to arise with costs of treatment beyond our ability to pay. Thus, lifesaving services that are unpredictable and super expensive is not something we shop for such as a television. Rather this is something that must be provided …for everybody through insurance. More than 600,000 American families declare medical bankruptcy each year and there is no market predictor that decides when a person becomes a consumer of healthcare.
Nobody knows their health future, what treatments or specialists they will need. We simply have no way of knowing what insurance to buy to cover our unknown needs Low premiums will come with weak coverage and lots of non covered services and high deductibles. It is simply false to believe as many in Congress allege that anyone will get a great deal from a for profit insurance company. Their business is their company’s profits not your health.
The current Republican ideology of the “survival of the fittest” ; that the free market determines winners and losers doesn’t allow for the belief that all Americans deserve a basic level of healthcare regardless of their financial status. This is where other developed countries have chosen a public health option that doesn’t force its people to chose between help for a sick child or putting food on the table.
When Trump and the Republicans held their Rose Garden celebration of their passage of the American Health Care Act with Trump calling this an unbelievable victory the Republican party assumed ownership of healthcare in America. Trump and Ryan promised this great plan would bring down both premiums and deductibles. This bill was rushed through to passage without the Congressional Budget Office providing analysis. The CBO has now projected that 14 million will lose health insurance coverage next year and 23 million will be without their insurance within a decade. With no mandate in their plan that everybody must have health insurance it is possible that 51 million Americans will be without health insurance by 2026. The CBO also says that 90% of the spending reductions would result in tax cuts mostly for the wealthy.
A 64 year old Obamacare recipient will see premiums rise from $1,700 to about $13,600 for less coverage. Ryan is correct that prices will probably come down for healthy people but that would be because sick people will be driven out of the insurance market. With Trumpcare allowing states to obtain waivers from the Essential Health Benefits included in Obamacare; premiums would be set on the basis of an individual’s health status meaning those with pre-existing conditions could be out of luck or subject to insurance companies imposing annual and lifetime benefit caps that existed prior to Obamacare. This could even be imposed on employer-based insurance plans. Out of pocket payments could explode for those with h serious health conditions or those needing expensive prescription drugs.
A reminder that this is a tax cut bill rather than a healthcare bill is provided by the Joint Tax Commission’s assessment that this bill results in a $663 billion tax cut over the next 10 years.