The gigantic tax break President Trump and the Republican Congress gave corporations generated a storm with Democrats. Trump declared the cuts would primarily help the middle class, a false statement.
The top tax rate for corporations was reduced from 37 percent to 21 percent, and the reasoning given was the 37 percent rate put U.S. businesses at a competitive disadvantage with other countries. The truth is most U.S. corporations actually paid vastly less than that. Prior to the tax breaks, Forbes, a conservative, business-oriented magazine, published an article, “Trump’s Tax Slash Ignores How Little Companies Actually Pay,” reporting taxes paid by U.S. corporations were comparable to those of most other countries.
Corporations reaped a windfall while most middle-class taxpayers received a minimal tax cut at the cost of seemingly never-ending trillion-dollar deficits. Many jobs have been added, but the price has been too high. When Democrats incur such deficits, conservatives proclaim a national disaster that will lead to a bankrupt government, but when Republicans do the same, they either remain silent or predict tax cuts will increase tax income due to increased business activity. That is hypocrisy; it has very rarely, if ever, occurred.
Except in the case of a true national emergency, annual governmental income should cover all expenditures. Regardless of the party in power, that has not been the case, except for rare exceptions, for many years. Unlike individuals who can spend more than they make for a limited time only, our government continually goes deeper into debt. Interest on our national debt now requires 8 percent of our country’s income. It would be farsighted and prudent to raise taxes when necessary to match receipts with expenses, or better yet, put money in reserve when times are good and spend the surplus when a downturn in the economy occurs; recessions are inevitable. Can taxpayers possibly be on such shaky financial ground our middle-class (and rich) taxpayers could not pay more to achieve a balanced budget with a modest surplus?
The income necessary to be in the middle class varies depending on financial experts’ estimates, but a realistic gauge would focus primarily on any particular individual’s or family’s necessary income for a moderate, comfortable and financially sound lifestyle.
For a family of four, $100,000 a year would almost surely place Calaveras County residents in the upper middle class, while the same sum probably would not meet minimal living expenses in Bay Area communities. Research indicates approximately 50 percent of our population is middle class, with 30 percent below and 20 percent above middle class. However, statistics indicate around 45 percent of our populace does not earn enough money to pay any federal income tax. If those figures are correct, a substantial portion of middle-income workers pay no federal income taxes. A high percentage of them have full-time but low-paying jobs, and some hold down more than one job. It is easy to blame them for their plight, as some better-off people do, but solutions can be difficult. They may not have the skills needed to get a decent-paying job and some may not have the capability to learn the technology increasingly needed in today’s world. More than one study has confirmed we are becoming a nation of rich and poor.
That is an unjustifiable situation. History has provided more than one example of the desperately poor revolting against those few they perceived as too greedy. Perhaps the best known instance was the French Revolution, which occurred in the late 1700s. France’s multitudes were experiencing great hardships while the rich were doing well. When told “The people are starving,” Queen Antoinette, according to some accounts, replied, “Then let them eat cake.” That story is reportedly not true, but there are documents indicating many of the wealthy French people found the starving poor unworthy of assistance or compassion. As it turned out, the hungry masses revolted violently, beheading their oppressors on gory but efficient guillotines to the delight of big and blood-thirsty, revenge-seeking mobs.
Brutal solutions are unnecessary in our country because we have the ballot box to make equitable changes. Although surveys vary in analyzing our country’s distribution of wealth, all show a worrisome trend with the ultra-rich acquiring ever higher amounts of money. One study found the top 20 percent of households own 90 percent of the wealth, while respondents to a survey thought the top 20 percent should control around 33 percent. Rich, middle class or poor, that should be of great concern to all of us. We should not begrudge ethical persons who have become financially successful, but we can and should tax them to assist those who are struggling.
Undoubtedly, many of the poor have only themselves to blame, but we should be caring enough to pay taxes to provide the destitute with minimally adequate food, housing, health care and the opportunity to better themselves. “I have mine, you can go to hell,” is not appropriate for a civilized people.
Ted Shannon is a resident of Mokelumne Hill, a retired California Highway Patrol officer and was a firefighter and logger.