Do elections have consequences? Please look at some major economic legislation passed or proposed in the last few years.
In 2017, a sweeping tax bill was passed by a Republican Congress and signed into law by President Donald Trump. Among other things, that tax legislation reduced the corporate tax rate from 35% to 21%. According to an article in the Minneapolis Star Tribune (April 4, 2021), 55 large U.S. corporations paid no taxes when the lower tax rate was combined with tax deductions and exemptions. According to the article, the companies included FedEx, Nike, Archer-Daniels Midland, Ecolab and Xcel Energy.
The article points out that 26 of the large corporations were able to avoid paying any taxes for the last three years, even though their combined income was over $77 billion. Many of these corporations also received tax rebates!
There are certainly good reasons for certain tax deductions, such as building infrastructure and adding new technology. But the article indicates that billions in deductions came from allowing top executives to buy discounted stock options in the future and then deducting their value as a loss — hardly a tax deduction that helps the shareholders or regular taxpayers.
Is allowing large corporations, who make billions of dollars in income, to pay $0 in taxes (and sometimes also giving these same large corporations tax rebates from our government) good public policy?
I have voted for many Republicans and worked on various Republican campaigns when Republicans had more reasonable policies. I am dismayed that the current Republican party seems to only support tax policy which favors large corporations and causes massive budget deficits. Who pays for these corporate tax cuts which cause massive budget deficits? Probably our children and grandchildren through higher taxes in the future.
Note that Congressional Republicans voted almost unanimously for the above massive tax cut to corporations, but almost unanimously rejected the recently passed COVID relief package. The COVID relief package is designed to help small business, the middle class, the poor and state and local governments recover from the pandemic.
Do current Republicans think large corporations are their most important constituents? That would appear to be the obvious conclusion.
The Star Tribune article discusses how the Biden Administration plans to pay for an infrastructure bill that is being proposed, which would include fixing our dilapidated roads and bridges and increasing technology and transmission capabilities. The Biden Administration plans to increase the corporate tax rate to 28% and establish a kind of minimum tax to limit the number of zero-payers to pay for the infrastructure bill. The Biden Administration has estimated the tax changes would raise $2 trillion in tax revenue in the next 15 years.
Senate Minority Leader Mitch McConnell has indicated that these tax increases to corporations will prevent any Republican support for the infrastructure bill. Certainly consistent!
Many of us vote for politicians based on social issues not associated with economic and tax policy. Each of us needs to determine whether voting for politicians based on social issues is more important than voting for politicians based upon tax and economic policies which may have a significant effect, positively or negatively, on our country, our children and our grandchildren. Elections do have consequences!