In response to Congressman Jim Jordan’s comments in the Urbana Daily Citizen;
“Regarding the legislation’s plan to reduce the federal corporate tax rate from 35 to 21 percent, he said, employers will ‘plow that extra 14 percent back into their businesses … That is a good thing for all of us and a good thing for our country.’
What proof does Jordan have that corporations with billions in the bank, pre-tax cut, will put the tax savings in new plants and equipment? Experience in Ohio and Kansas indicates that such funds are used to buy back stock and/or increase dividends to investors. Tax revenue in both states has fallen significantly and local governments and schools have become underfunded.
Trickle down, voodoo economics based on the Laffer Curve have no record of success. Even Ronnie and George W. had to make mid-course tax increases in order to mitigate the resulting deficits.
Tax cuts during a recession is a tool to stimulate consumption by the job creating consumers. It’s not intended nor able to increase tax revenue.
Consider the effect of the new tax system on the increasing separation in wealth distribution. The estate tax elimination alone blows a hole in the distribution problem wide enough to drive a Brinks truck though.