Regarding the Nov. 21 editorial “A tax plan gut check ”:
I’ve got questions. With the debt increased by no less than $1.5 trillion over the next decade, what will Republicans do on those many occasions when they will have to confront increases in the debt ceiling? How low is the likelihood that they will just sign off on them? Who will get the blame (and these things always are about blame), especially when the Democrats retake the White House? And what compensating budget cuts will they righteously insist on? Will they be from Medicare or Medicaid or, perhaps, from preschool programs? What will be the increased frequency and duration of government shutdowns? Is there any dialogue about these things?
David Cohen, Arlington
Steve Pearlstein’s Nov. 19 Business column, “The business lobby’s chance to do right by America,” about the Business Roundtable and the Republican tax proposal, made a substantial contribution to public understanding of the pitfalls of Congress’s direction. By pointing out that these proposals will create either “runaway federal debt” or meaningful reductions in essential government services, he shifted the burden back to the business lobbyists who support the current tax legislation.
Mr. Pearlstein’s argument is backed up with concrete data. In their work on U.S. competitiveness, Michael Porter and Jan Rivkin of the Harvard Business School found that while business leaders generally think corporate tax reform is needed, they feel equally strongly about a responsible federal budget.
A reckless gamble on tax cuts that is projected to contribute to an increase of our national debt from $20 trillion today to $33.1 trillion in the next 10 years (based on Tax Policy Center figures) is not likely to enhance business confidence and encourage leaders to make the investments necessary to elevate the growth in our economy.
Alexander Boyle, Chevy Chase
The writer, who retired as vice chairman of the Chevy Chase Bank, is a member of the Leadership Council of the Tax Policy Center.
The Nov. 21 news article “Here are the 5 key questions about the Republican tax plan” laid out the main deficiencies that endanger the plan’s chance of passage, including its negative effect on many middle-class taxpayers and the fact that it would add $1.5 trillion to America’s $20 trillion (and growing) debt. Whatever happened to discussion of the Simpson-Bowles plan to reduce the national debt?
Launched in 2010 by President Barack Obama, this bipartisan commission produced a plan with six major components, including discretionary spending cuts, lower income and corporate tax rates, and Social Security reform. Simpson-Bowles, if implemented, would have reduced the federal deficit by nearly $4 trillion by 2020, stabilized the growth of debt held by the public by 2014, and reduced debt 60 percent by 2023 and 40 percent by 2035 . Why not reopen consideration of the Simpson-Bowles plan instead of trying to push the deeply flawed Republican proposal through Congress?
Gary Usrey, Arlington
In her Nov. 17 op-ed, “For humans, this tax plan is going to hurt,” Catherine Rampell described the two tax-reform bills in Congress. Her salient point was that the vast majority of the $1.5 trillion in tax cuts are headed to companies and are permanent. The minority of cuts go to individuals and are temporary.
GOP leaders claim that companies will invest their money to increase productivity and worker compensation. We are a “demand” economy, not a “supply” economy. We don’t have middle-class buyers with cash aching for a greater supply of cars or major home upgrades, as was the case after World War II.
Most executives are not going to invest to increase supply without new demand. Instead, they’ll put tax-cut money into stock buybacks and dividends — not more jobs. Those who do invest in supply without new demand are looking to cut labor costs. That suggests fewer jobs, not more.
Responsible members of the middle class are not going to make major purchases unless their standard of living is improved sustainably. But their tax cuts are temporary. That has no lasting impact on jobs.
So in all these ways to deploy tax-cut money, the impact on jobs is near zero or negative.
Walt Culver, Reston
How many middle-class Americans realize that removing deductions for property taxes and restricting mortgage-interest deductions will depress the value of their homes? In my case, the loss could easily be more than $100,000.
I resent the Republican attempt not only to increase the taxes I must pay but also to depress the value of the property I own.
It is said, “Give a poor man $100 and he will spend it because he must. Give a rich man $100 and he will save it because he can.” The Republican tax bills will shift money from active circulation to stagnation in interest-bearing accounts. It sounds like bad economics to me.
Melvin F. Houston, Ellicott City
Take from the poor and give to the rich. In a nutshell, that’s the Republican tax bill — a reverse Robin Hood plan. This was outlined clearly in the Nov. 22 The Finance 202 blog excerpt, “To a skeptical Wall Street, GOP tax plan would just create a ‘fiscal sugar high’ ” [Power Post], which reported that after a decade, the plan would raise taxes on those earning less than $75,000.
The only mystery remaining is this: Where is the outrage from hard-working Americans?
David Tate, Arlington