Friday, September 23, 2016
Trump's "Jobs" Program Just A Huge Giveaway To The Rich
Throughout the general presidential campaign, Donald Trump has repeated many times that he will create massive amounts of new jobs. But will he be able to do that? Will his policy create any new jobs at all?
The centerpiece of his "jobs" program is his tax proposal. He wants to lower the income tax paid by corporations from the current 39.6% to only 15%. And he wants to allow them to bring home the massive amounts of money they are hiding overseas, and have it taxed at only 10%. He also wants to cut the top tax rate for the rich from 39.6% to 33% (a whopping 17% tax cut).
His thesis is that corporations would use the money they save in taxes (and admittedly, it would be a massive cut in taxes for them) to create new jobs in the United States. Does that sound familiar? It should. It's just the old failed GOP "trickle-down" economic policy -- the idea that if we just give the rich and the corporations more money they will eventually share some of it with the general public.
It's a ludicrous idea that didn't work in the Bush administration (which created a record low in new jobs) and it won't work now. It won't work because the tax rate has nothing to do with job creation. Cutting taxes for the rich and corporations will just fatten their bank accounts and nothing else -- just like it has done in the past.
Do you doubt that? Just consider this -- one of our greatest economic booms (which created massive amounts of new jobs) was in the 1950s, when the top tax rate was 90%. And one of the poorest economic times (and worst job creation) was during the Bush administration, when the top tax rate was lower than at any other time since World War II. It's just a fact that lowering taxes does not create jobs and raising taxes does not cost jobs.
There is only one thing that creates jobs in a capitalist economy like ours -- an increase in the demand for goods/services. Consider job creation from a business standpoint. If you hire too many workers, then you just waste money that could have been profit for yourself -- and if you hire too few workers, then you hurt the business' ability to produce goods, get them to market, and service your customers -- which will drive your customers to a competitor with the correct number of employees.
That means a business can only justify hiring more workers when an increase in demand makes it feasible, regardless of whether your taxes go up or down. So what can increase demand? Demand is increased when the masses have more money to spend. Giving the rich more money won't increase demand -- because there aren't enough of them to stimulate demand and they already have the money to buy whatever they want. Demand is increased when the poor, the working class, and the middle class have more money to spend (the bottom 80% to 90% of the population).
Trump's tax plan would also have a negative effect on the deficit and the national debt. His own campaign admits that it would decrease federal revenue by a trillion dollars over a decade. Economists more correctly put the figure at between $3.5 to $10 trillion over a decade.
How would he pay for that? He says he would cut a trillion dollars out of the budget, but would not touch the Military budget (which he wants to increase), Social Security, Medicare, or Medicaid (although he later told Rep. Ryan that he would cut S.S.). It makes sense not to cut Social Security, Medicare, and Medicaid. Social Security is not paid for with income taxes, and most of Medicare is not either. And Medicaid is already so low-paying that many doctors won't accept Medicaid patients. His plan to increase military spending (already about 45% of all military spending in the entire world) would increase both the deficit and the debt (beyond even the increase caused by his tax plan).
So, what would he cut? It would have to come from other budget items (education, environmental protection, welfare, food stamps, housing assistance, housing loans, veterans care, help for college students, aid to farmers, law enforcement, public health, national parks and landmarks upkeep, infrastructure repair, etc.) -- the programs that actually help Americans, and which have already been cut to the bone by the austerity Republicans have imposed.
Trump also says some of the tax cuts would be offset by a huge growth in the economy. That has to be a joke, because he will be taking money out of the economy through his massive trillion dollar cuts to government programs -- a move that will decrease demand and actually hurt economic growth.Giving more to the rich and corporations won't stimulate economic growth. That can only be done by increasing demand (which would require giving the masses more money to spend -- not the rich).
Economic growth could be stimulated by raising the minimum wage, adequately funding government programs that help people, and strengthening labor unions -- but those are all ideas that Trump opposes.
In short, Trump really doesn't have a jobs plan. He just has a plan to give more to the rich and corporations, while taking more away from the poor, the working class, and the middle class. His plan would be economically disastrous for this country.