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URL of the original posting site: https://www.westernjournalism.com/corporate-tax-cut-will-raise-middle-class-wages/?

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A study released Monday by Kevin Hassett, President Donald Trump’s chief economist, gives a boost to Trump’s proposed corporate tax cut. The study shows that if the tax cut is implemented, the average family could see an income boost in the thousands of dollars.

The tax cut would lower the current rate of 35 percent to 20 percent. Based on “conservative estimates,” this decrease would boost the average household income by $4,000, the paper said. But more “moderate estimates” reveal increases of $9,000 per family.

“Put simply, capital deepening, which brings additional returns to the owners of capital, brings substantial returns to workers as well,” said the paper, which studied evidence from other countries that have lowered their corporate tax rates.

But Democrats have disapproved of Trump’s proposed tax cut from the start. They believe it will not benefit ordinary families, but only business themselves.

The new study will allow Republicans to offer a rebuttal.

Hassett, the chair of the White House Council of Economic Advisers, insists that American families would benefit the most from significantly lower corporate tax rates, more so than the companies themselves.

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“America’s broken corporate tax system creates incentives for firms to hold their money outside of our borders,” Hassett told reporters on Sunday, according to the Washington Examiner. “When firms hold their money overseas rather than invest them in America, they’re holding down the productivity of the American economy and the wages of American workers.”

The United States has one of the highest corporate tax rates in the world, leading many companies to keep their profits abroad in lower-tax countries to avoid significant tax hits back home.

By cutting the tax rate, the idea is that companies would then invest more within the United States. This would cause a boost in productivity throughout the country.

This productivity would then boost wages, according to Hassett’s study.

“More assets like machines let workers produce more, and when workers can produce more, businesses can afford to pay their workers more,” Hassett said, as reported by The Hill. 

But some economists and tax policy experts have voiced their concerns about the tax cut directly benefiting workers. Although they agree this would attract companies to invest more in the United States economy, they cannot predict how much money will bring back home. There is also concern over what corporations will do with their tax savings.

Trump announced his tax proposal during a September a speech in Indianapolis. Calling it a “revolutionary change,” he said it would boost wages to “levels that you haven’t seen in many years,” according to The New York Times. 

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