I was fascinated by Senator Rob Portman’s article of April 14th (“Happy Tax Freedom Day”). In his article Portman states “If big government policies and irresponsible deficit spending continue,” then “Tax Freedom Day will likely come on a much later time for future generations.”
I presume Senator Portman is referring to such irresponsible deficit spending as: two wars which were not paid for; two tax cuts which were not paid for (and were targeted to those who needed a tax cut the least); and a new prescription benefit to Medicare, the primary purpose of which was to benefit the pharmaceutical companies rather than Medicare patients.
The one thing these measures have in common is that the Republicans who complain the most about the deficit today, like Portman, voted for these measures.
Portman goes on to advocate the same old Republican nostrum of even more tax cuts for corporations, claiming that this will create jobs. First of all, the corporate tax code has so many loopholes and giveaways in it that many of the largest and most profitable corporations in America are paying zero taxes right now, and some are actually getting rebates.
Second, if cutting taxes for corporations and the wealthy was the only thing necessary to produce job creation, unemployment would have been eliminated by the Bush administration. These policies of redistributing income upwards to the wealthy and to corporate America were tried and tried to an ever-increasing degree by the Bush administration, and they failed miserably.
Third, by historical standards corporate taxes are relatively low right now. When that dangerous radical, Dwight Eisenhower, was president, corporations paid 33 percent of America’s tax revenue. Today they pay 11 percent of America’s tax revenue.
Today the wealthiest 1 percent of Americans get 33 percent of the nation’s income and control 40 percent of the nation’s wealth. Both of these figures represent significant increases over the past decade and represent the largest portions for the top 1 percent since 1929.
America’s corporations are posting record profits, paying record salaries and bonuses to executives and are sitting on an estimated $1.8 trillion of wealth. Neither the corporations nor the very rich seem to be in dire need of a tax cut at this time.
The problem our economy faces today is that our middle-class and working-class do not have the income to give them the purchasing power to create demand for goods and services. The top 1 percent is doing better than at any time in the last 80 years, but one percent of the population can’t create the demand needed to produce an economic recovery.
I don’t blame businesses for not investing when there is insufficient demand to justify investment. Aside from the Bush tax cuts and the two wars, the biggest driver of the deficit is high unemployment. Bringing the unemployment rate of 8.8 percent down to 4 percent, where it was during the Clinton years, would do more to bring down the deficit than Portman’s idea of resurrecting the policies of George Bush, Jr.
The civil engineers have rated America’s infrastructure a “D.” This should surprise no one, as we have deferred maintenance on infrastructure for the past 30 years. We should rebuild our infrastructure, thereby putting people to work, thus putting money into the hands of people who will spend it. This will create the demand necessary to spur investment and create a recovery.
Paul Schwietering is a resident of Union Township.