The Republican Party has one idea. It’s a terrible idea that has never worked out for anyone but the very top economic strata of our society. It’s been called Reganomics and trickle-down economics, but it basically says that if you give the people with all of the money even more money, they will make sure to build bigger and better things and everyone will end up getting more money. It never plays out that way and then every eight years or so we end up in an economic crisis, because deregulation of our banks and financial sectors always accompanies such tax cuts.
Then a more liberal set of people are elected to try and fix the mess we’ve gotten into. They do this through “compromise,” because there are still rich people pretending that the shitshow everybody just watched didn’t happen, and those rich people pay for many of the elected officials’ lunches. And then assholes like Trump economic adviser Gary Cohn step on in and tell everybody (again) how great the world will be as soon as we cut rich people and corporations’ taxes.
Here’s video of Gary Cohn being interviewed in a room filled with very wealthy CEOs. When the room is asked who will be investing in their companies—i.e. “job creating”—if the Republican plan to slash all of their taxes goes through, the response is perfectly muted.
VIDEO: CEOs asked if they plan to increase their company’s capital investments if the GOP’s tax bill passes.
A few hands go up.
“Why aren’t the other hands up?” Gary Cohn asks.#WSJCEOCouncil pic.twitter.com/TD2oAlN27S
Ã¢ÂÂ Natalie Andrews (@nataliewsj) November 14, 2017
Vox thinks that one of the reasons there aren’t a lot of hands raised is because companies see corporate tax cuts as returns on older investments.
The reason few hands are raised is there’s little reason to believe that the kind of broad corporate income tax cut Republicans are pushing for will induce much new investment. A tax plan that was specifically designed to reduce taxation of new investments might do that. But most corporate profits are, of course, the result of activities undertaken in the past. So a broad cut in corporate tax rates is a windfall for what in tax policy jargon is called “old capital,” as well as for monopoly and quasi-monopoly rents and various other things that have nothing to do with incentivizing new investment.
But it’s not that complicated. These guys (and it’s mostly guys) know that these tax cuts go through, or they don’t. The American people don’t want big tax cuts for the rich, and CEOs don’t give a fuck about your family’s healthcare. If they get their tax cuts they are going to do what they always do: keep the money.