The wailing and gnashing of teeth over the tax reform bill passed by the House on Thursday was too much. Even the average congressional debate, with its party-line grandstanding, is bad enough. But it's so much more tedious when Democrats line up to echo each other ad nauseam, making the same tired talking points against a permanent cut in the corporate tax rate, which they supported when their guy was in the White House.
They disingenuously blast tax reform as a giveaway, or a form of corporate welfare. Democrats would have you believe that the Republicans' tax reform proposal loots the middle class so they can hand suitcases full of crisp 100 dollar bills to their pinstriped, plutocratic pals in "big business."
Nothing could be further from the truth. Tax reform, and this particular bill, is written to remove or reduce corporate welfare provisions. If you're looking for corporate welfare, don't look at the corporate tax. Look instead at the home mortgage interest deduction, which is a massive handout to banks and realtors. Homeowners don’t benefit from it because it just means their homes cost more when they buy them.
But you know what’s not corporate welfare? A low, uniform corporate tax rate, which is precisely what Congress is trying to implement. A tax reform plan that lowers the rate is neither corporate welfare nor a massive giveaway to the wealthy. Rather, it is a fair and even-handed way of reducing economic distortions, making American businesses more competitive worldwide, and encouraging them to reinvest overseas profits in jobs and growth back home.
The Left’s increasingly dishonest and almost deafening rhetoric about tax reform consists of all the same things they'd say no matter what sort of tax plan Republicans produced.
It’s easy to make “corporate tax cuts” sound like a bad thing. But what’s funny is that they saw no need to warn people against them when former President Barack Obama supported a cut to the corporate tax rate. He called a lower corporate rate “something that serious people in both parties should be able to support.” When it's not a Democrat proposing the policy, Democrats perform an acrobatic flip-flop and suddenly find the policy unconscionable. Fancy that!
In real life, corporations are not taxpayers. They are, rather, tax collectors. They collect taxes from you, the consumer, by passing costs your way. They collect taxes from their employees by paying lower wages than they might otherwise have done. And they collect taxes from their shareholders by paying out smaller dividends. Real individual people — that's you, your friends, and your neighbors — pay every dime of the corporate income tax.
So, why is it significant? The answer is easy. It's because America's inordinately high corporate tax rate is hurting the economy. It encourages corporations to adopt elaborate but legal tax avoidance schemes that improve their bottom line without creating jobs or investment. It discourages companies from bringing overseas profits back to America for investment here, where it would create more jobs and growth.
In 2015, Senate Minority Leader Chuck Schumer understood this. He said, “Our international tax system ... creates incentives to send jobs and stash profits overseas, rather than creating jobs and economic growth here in the United States.” He said this in support of a bipartisan cut to the corporate tax rate. Now, instead, he says, "history shows tax cuts like these benefit the wealthy and the powerful to the exclusion of the middle class."
Instead of substantive and vigorous debate, the public is being served this sort of bad-faith debate in huge dollops from the Democrats. It reinforces Americans' view that those in elected office serve their own ambitions and not the common good.