AJOC EDITORIAL: GOP finally delivers on promise to Americans
Opening the Arctic National Wildlife Refuge coastal plain to development wouldn’t be necessary if only we could power our economy with Democratic hysteria.
The biggest outrage since the last outrage, of course, is the impending passage of a tax reform bill that should reach President Donald Trump’s desk for his signature before the end of the year.
In the days since the Dec. 2 Senate vote that cleared the way for a conference committee with the House, Democrats and their media sympathizers have been gnashing teeth and rending garments over a bill that ranks as only the eighth-largest tax cut as a percentage of Gross Domestic Product since 1918.
That’s the conclusion of the Washington Post fact checkers, who unintentionally confirmed the derangement of their partisan friends in an attempt to undercut Trump’s boasts about the bill.
Accepting the Congressional Budget Office estimate that the bill reduces revenue to the federal government by $1 trillion over a decade, the average of $100 billion per year amounts to 2.7 percent of estimated fiscal year 2018 tax receipts and 2.3 percent of the budget.
That’s right. The Democrat-media Apocalyptic freakout is based on Uncle Sam collecting a whopping two or three pennies on the dollar less than it does now.
Although it is more heart-warming than watching a litter of puppies chase butterflies to see the Democrat-media industrial complex suddenly care about budget deficits after the national debt increased by $10 trillion in eight years of President Barack Obama, the position is as disingenuous as it is overwrought.
Throughout the national media and to the editorial page in our capital city here in Alaska, the foregone revenue to the federal government is being described repeatedly as a “cost” to the taxpayers.
Only in the through-the-looking-glass world we live in now could taxpayers and businesses keeping more of what they earn be described as a “cost.”
Jumping off from an analogy that regular American “sparrows” are left to pick the oats from the feces of corporate “horses,” the editorial from Juneau is filled with so much magical thinking it could be a Harry Potter novel and reading the piece from the seat of our state government makes one wonder if Sen. Bernie Sanders has joined the editorial board.
Juneau is coincidentally home to more millionaires per capita than any city of its size in the country, and just as coincidentally the four richest counties in the United States are home to the suburbs of Washington, D.C., where a record $3.6 trillion in tax dollars will flow this fiscal year. Funny that, how the richest parts of our state and nation are concentrated where the tax dollars are collected and distributed.
The editorial claims that for the “cost” of the tax bill we could give every American household $1,000 per year for 10 years, plus pay for free college tuition for every student at the same time, or pay for national health care system, or “maybe” fund one year of the War on Terror.
All that was missing was a free unicorn for everyone and brown cows that give chocolate milk.
The $1,000 for every household for 10 years adds up to $1.2 trillion, which leaves nothing for the free tuition plan.
National health care expenses between private and government sources totaled $3.2 trillion in 2015, so that math is a little short, too.
As for “maybe” paying for a year of the War on Terror, the fiscal year 2018 budget for overseas combat operations is about $71 billion.
Much of the ire over the tax bill flows from the reduction of the corporate tax rate from 35 percent, currently the highest in the world, to 20 percent.
Lost in the furor is the fact that despite having the highest corporate rate in the world, the revenue from that source accounts for only about 11 percent of total tax receipts. In fact, collections from the corporate tax through the first 10 months of the 2017 fiscal year were just $232 billion compared to $273 billion in the same period of 2015.
Looking back at the history of the corporate tax rate, every time it has been reduced there has been an increase in GDP in the following years.
Under tax reductions championed by President John F. Kennedy, the corporate rate was cut from 52 percent to 50 percent in 1963. GDP growth went from 4.3 percent in 1963 to 5.6 percent in 1964.
It was reduced again from 50 percent to 48 percent in 1965, and growth increased to 6.2 percent.
From 1963-66, despite the cut in rate, the percent of revenue from corporate taxes increased from 20.3 percent to 23 percent.
A year later, the rate went up from 48 percent to 52.8 percent in 1967, and growth slowed from 6.3 percent in 1966 to 2.5 percent.
After GDP growth slowed to 0.2 percent by 1969, the corporate rate was returned to 48 percent in 1971 and growth increased to 5.2 percent and 5.6 percent, respectively, in 1972 and 1973.
When the corporate rate was cut from 40 percent to 34 percent in 1987, GDP growth increased from 3.1 percent that year to 4 percent in 1988.
Add all that up with the bonus of opening ANWR to development and a chaotic year in Congress can end with at least one promise kept to the people who handed Republicans the power to deliver on the ones they’ve been making for seven years.
Andrew Jensen can be reached at [email protected].