Trump Tax Cut is a Big Break For Anyone Making a Living, Not Just For Business
The reduction in tax revenue can only lead to increases in payments to (1) individuals—wages, salaries, bonuses; (2) dividends or stock repurchases from shareholders; these lead to greater revenues from individual income taxes offsetting in part the Treasury revenue lost from the lower corporate tax rate. (3) The rest will be invested directly in product development, capital goods, R&D or financial instruments. Investments now in foreign subsidiaries will have an incentive to return home where the after tax return is much sweeter. The economy is likely at last to grow, and the much awaited inflation may finally arrive. We now might even be competitive with Ireland. Foreign countries will be forced to lower their corporate taxes or suffer the economic consequences.
I should add that the chart “Big Break For Business” is just wrong. It is a big break for all who produce and make a living.
All business receipts are paid out to someone; none of it gets lost or stuck inside the business.
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