Tax relief will not create new jobs
In the tax reform versions now proposed, the standard deduction for both single and married taxpayers doubles, while the personal exemption ($4,050 for every taxpayer and dependent) is eliminated. The child tax credit is increased by $600 per child. Most, but not all, tax rates are reduced.
For those who itemize, various deductions are no longer possible, such as sales and local income taxes and medical expenses (in the House version), leading to increased taxes as millions of filers are forced to switch from itemized to the standard deduction.
Taxes for a combined income below $100,000 using the standard deduction are generally lowered between $500 and $2,000. But not all middle-income taxpayers will see a reduction in their taxes.
Middle-income tax reductions pale when compared with the millions of dollars of tax reductions seen for business, including “pass-throughs,” where taxes on individuals with earned business income (as opposed to income from wages) are greatly reduced and capped.
The Republicans seem to have discarded their traditional concern over the federal debt, now at $20 trillion, to finance this tax relief. Without an equivalent reduction in spending, the federal deficit will increase another $2 trillion, possibly more. Trickle-down economics, where benefits are claimed to flow down from the highest to the lowest incomes to justify large tax reductions, is an unproven hoax.
This tax reduction is entirely unnecessary, for it will not create new jobs. There are plenty of low- and high-paying jobs now available, but most Americans are not sufficiently educated, trained and skilled to qualify for the high-paying jobs. As the global economy expands to emerging nations, such as Vietnam and India, we will see more and more job losses as American wages for manufacturing and service jobs are not competitive and are increasingly lost to automation, a lethal combination. Skilled jobs will become threatened as emerging nations place a premium on teaching technical skills unencumbered by politically motivated constraints.
Tax revenues lost to tax reduction would be much more productively spent on public works such as roads and bridges and subways and crumbling inner cities to stimulate the economy.
To give tax reduction of a thousand dollars to ordinary taxpayers and millions of dollars to businesses and the very rich under the pretext this will create new jobs is a giant scam that greatly exceeds the “tax relief” distribution under G. W. Bush. We know where that led.