To the Editor:

Republicans are again touting the critical need for tax cuts for the upper economic classes.  This is going on at both the state and federal level. The cuts are even embedded in Trumpcare. The promised benefits of large tax cuts? More jobs and a growing economy — if only it were true.

There are two related arguments for tax cuts that primarily benefit the investor class. The first is that the increased wealth at the top will create jobs through investment. Were that the case, the economy during the Reagan and second Bush administrations would have roared, driving unemployment to record low levels and vastly increasing income and wealth for the middle and lower classes. 

That didn’t happen. Investors are free to invest their money overseas and in various schemes that make more money for the investors, while generating little or no benefit for the U.S. economy.

Second, the promised job and income increases from the tax cuts were promised to increase government revenues and reduce deficits. That didn’t happen either. Instead, we got the largest deficits in history until we had to increase expenditures that were necessary to prevent the George Bush recession from becoming a global depression.

Then there are corporate taxes. On paper the U.S. has one of the higher tax rates in the developed world (35 percent). However, after the various deductions and exclusions, the average corporate tax payment is only around 20-25 percent. Eighteen large corporations (e.g. International Paper, General Electric, Priceline, Duke Energy) paid no federal taxes from 2008-2015. How does this happen? They write the tax laws.

Clearly we need tax reform. That reform should ensure that any profitable company pays taxes.  Small- and medium-size businesses, rather than large corporations, should be the primary beneficiaries of tax reform because that’s where most jobs are created.

For individuals, any tax cuts should focus on the lower and middle income groups at the expense of the already wealthy. Both income and sales taxes should be considered. The current tax code has transferred massive income and wealth to the upper economic classes over the last 30 years, and the results for the U.S. economy are obvious. It hasn’t worked.

To grow the economy, tax policy must emphasize the individuals who actually drive the economy rather than investing overseas or in transactions that only serve to increase personal wealth rather than growing the economy. One simple, though radical, solution would be to treat capital gains on investment income as ordinary income rather than with a flat 15 or 20 percent rate.

To be clear, this is not an indictment of democracy or capitalism — only the way it is currently practiced in the U.S.  Hard-working people must be rewarded for their efforts.  People with great ideas and the willingness to take the risks of bringing them to market should be rewarded if they are successful. That is the American story.  

What has increasingly happened is that rewards are conferred upon those with the best teams of lawyers, accountants and lobbyists. Meanwhile, tens of millions of citizens are left wondering what happened to their future and grasping at the false promises of a better future while wondering how to pay their bills..

The issue is fairly simple. Do your representatives support the wellbeing of 95 percent of their constituents or the 1 to 5 percent of their big donors? It’s your choice in 2018!

John Gladden

Franklin