Economists use historical trends and data to determine future economic forecasts. The current GOP tax bill making its way through the Senate proposes to slash the corporate tax from 35% to 20%. Historically, lessening the corporate tax will lead to greater corporate spending and stimulate growth. According to several economists, cutting corporate taxes will help businesses that manufacture capital goods the most. However, the greatest modern variable to production of goods in our society is the advancement of technology.
Production of goods is dependent on capital, natural resources, land, and labor, but technology alters these requirements. Based on historical trends, the greatest benefit to the current GOP tax plan is the slashing of corporate taxes. However, America’s economy of the future is nothing like we have seen, and technology/robotics will forever alter labor.
Earlier this summer I sat next to a woman who managed an experimental Super Wal-Mart in the Midwest. She told me this new Wal-Mart was experimental because a store of its size usually has 300 – 400 part-time and full-time employees. Her store employs 80 people because robotics is taking over the duties of stocking goods and we have all observed how the checker at retail outlets is becoming a profession of the past. Wal-Mart’s shift from labor to technology gives us a glimpse into the future of “job creation”. Cutting corporate taxes may lead to short-term economic growth, but it may not translate into more jobs because of advancing technologies. If corporate tax cuts do not bolster the number of jobs, then this portion of the GOP tax plan will also add to economic inequalities just as their income tax plan will.
Making economic projections for the future may begin in historical data and occurrences, but our future economic thought must also have a keen understanding of American culture and a vision of what lies ahead. Technological advances should inform us that within our advancing economy the days of “trickle-down economics” and the necessity to be a “job creator” in order to grow a company is obsolete. The GOP’s view of corporate tax cuts is another example of antiquated political thought blinding us from economic solutions that will help the American people.
America needs an economic vision that is as dynamic as our economy and society. The GOP tax plan is flawed because the small economic gains from lowering income taxes does not outweigh the loss of tax revenue. Also, the expiring tax breaks for everyone but the wealthiest people in our society will lead to more inequality and social unrest. With a poor income tax plan coupled with a corporate tax cut equates to a poor plan for working families and our national deficit.
The solution in America is an optimism in both our economy and government. Entrepreneurs should have incentives to grow their businesses and the economy of tomorrow, but there must be an understanding that the government needs to interject into the free market to ensure we produce economic opportunity. The American Dream needs to be renewed, which can only exist in our future with a strong education system, access to affordable healthcare, a just tax plan, and accessible higher education. To create an economy of upward mobility, it is essential that we have a vision that aims to create opportunity for all Americans, and we must have the fortitude to ignore those who say that a more equitable tax plan is too complex. We can accomplish great things in America, and I believe our greatest days are still ahead.
We can do better.
Burman, L. B., Nunns, J. R., Page, B. R., Rohaly, J., & Rosenburg, J. (2017). An Analysis of the House GOP Tax Plan. Retrieved October 30, 2017, from http://heinonline.org/HOL/LandingPage?handle=hein.journals/colujoutl8&div=14&id=&page= .
Mathur, A. (2017, October 27). It’s Not Fake News. Corporate Tax Reform Can Deliver Higher Paychecks to Households. Retrieved October 29, 2017, from https://www.forbes.com/sites/aparnamathur/2017/10/27/its-not-fake-news-corporate-tax-reform-can-deliver-higher-paychecks-to-households/#4169cf6277e9 .
Ballard-Rosa, C., Martin, L., Scheve, K. (2017). The Structure of American Income Tax Policy Preferences. The Journal of Politics 2017 79:1, 1-16. Accessed on October 27, 2017 from http://www.journals.uchicago.edu/doi/abs/10.1086/687324 .