Here are the 3 main Republican arguments in favor of it, followed by the truth.
- It will make American corporations competitive with foreign corporations, which are taxed at a lower rate.
Rubbish.
(1) American corporations now pay an effective rate (after taking deductions and tax credits) that’s just about the same as most foreign based corporations pay.
(2) Most of these other countries also impose a "Value Added Tax" on top of the corporate tax.
(3) When we cut our corporate rate from 35% to 20%, other nations will cut their corporate rates in order to be competitive with us -- so we gain nothing anyway.
(4) Big American corporations who benefit most from the Republican tax plan aren't even "American." Over 35 percent of their shareholders are foreign (so by cutting corporate taxes we’re giving a big tax cut to those foreign shareholders); 20 percent of their employees are foreign, while many Americans work for foreign-based corporations.
(5) The "competitiveness" of America depends on American workers, not on "American" corporations. But this tax plan will make it harder to finance public investments in education, health, and infrastructure, on which the competitiveness of American workers depends.
(6) American corporations already have more money than they know what to do with. Their profits are at record levels. They’re using them to buy back their shares of stock, and raise executive pay. That's what they'll do with a $1 trillion tax cut.
- With the tax cut, big corporations and the rich will invest and create more jobs.
Baloney.
(1) Job creation doesn't trickle down. After Ronald Reagan and George W. Bush cut taxes on the top, few jobs and little growth resulted. America cut taxes on corporations in 2004 in an attempt to get them to bring their profits home from abroad, and what happened? They didn’t invest. They just bought up more shares of their own stock, and increased executive pay.
(2) Companies expand and create jobs when there’s more demand for their goods and services. That demand comes from customers who have the money to buy what companies sell. Those customers are primarily the middle class and poor, who spend far more of their incomes than the rich. But this tax bill mostly benefits the rich.
(3) The plan is a huge and unnecessary sop to the rich in 3 big ways: It cuts their top income tax rate, allows many of the rich to treat their earnings as small-business “pass-throughs,” raises the threshold of the estate tax from $11 million to $22 million per couple, and increases corporate after-tax earnings, which raises stock prices – another windfall to the top 1 percent who own 40 percent of all shares of stock (the richest 10 percent own 80 percent).
(4) At a time when the richest 1 percent already have 40 percent of all the wealth in the country, it’s immoral to give them even more -- especially when financed partly by 13 million low-income Americans who will lose their health coverage as a result of this tax plan (according to the Congressional Budget Office), and by subsequent cuts in safety-net programs necessitated by increasing the deficit by $1.5 trillion.
- It will give small businesses an incentive to invest and create more jobs.
Untrue.
(1) At least 85 percent of small businesses earn so little they already pay the lowest corporate tax rate, which this plan doesn’t change.
(2) In fact, because the tax plan bestows much larger rewards on big businesses, they’ll have more ability to use predatory tactics to squeeze small firms and force them out of business.
Don't let your Uncle Bob be fooled: Republicans are voting for this because their wealthy patrons demand it. It will weaken our economy for years: It will reduce demand, widen inequality, and increase the deficit. Shame on the greedy Republican backers who have engineered this, and shame on Trump and the Republicans who have lied to the pubic about its consequences.