Commentary: Tax reform and a rigged system

By Janet Williams
TheStatehouseFile.com 

While all eyes were on the Mueller indictments and the unfolding Trump-Russia scandal, Congress was quietly and steadily working on a plan that promises tax cuts, jobs and prosperity for all.

Janet Williams, editor, TheStatehouseFile.com

You have probably heard all about it if you have spent more than 10 minutes watching television this fall. A young, but not too young, earnest-looking woman talks directly to the camera about taxes and how reform will make the system simpler, fairer and cheaper for all.

“Fixing our broken tax system isn’t about politics. It’s about helping people,” she says in a soothing tone. She stands against a soft gray background and wears a simple bluish-green sweater delivering a message that yes, she’s just like you and me.

She continues, “It means the powerful, the well-connected, the politicians, they’ll stop benefitting from a rigged system. It means every day Americans will have more to spend on what’s important to them.”

The 30-second advertisement moves quickly, so quickly that the words tend to wash right over viewers like us until the real target emerges. She asks what’s stopping us and a voice that sounds like the same woman though the tone is harsher appeals to the viewer to stop U.S. Sen. Joe Donnelly, D-Indiana, from standing in the way of real tax reform.

At the bottom of the screen in fine print before the ad cuts away to the next commercial is a line telling us that what we just saw was paid for by Americans for Prosperity. What a great name, as if all of us aren’t in favor of real prosperity. But seriously, we need to understand who is behind the organization called Americans for Prosperity.

The nonprofit organization was founded by the billionaire Koch brothers early in the last decade, and it has contributed its cash to repeal the Affordable Care Act, also known as Obamacare, and overhaul the country’s tax system.

AFP announced in early October that it was spending $4.5 million on ads that not only target Donnelly, but Sens. Claire McCaskill of Missouri and Tammy Baldwin of Wisconsin. They are among the most vulnerable Democrats in the Senate who are up for re-election in 2018.

The commercial aired long before the Congress unveiled the tax plan and Donnelly had rightly said that he would have to see the plan before making a decision. The implication, though, is clear – that Indiana’s Democratic senator, as well as the senators from Missouri and Wisconsin, stand in the way of tax cuts that could mean more money in the pockets of average Americans.

The ad refers to a rigged system and maybe it is. But the irony is that often very wealthy individuals and big corporations are the ones taking the greatest advantage of that rigged system – some of the same people behind the ad.

The argument for tax cuts is built on the belief that when rich people and corporations have more money in their pockets they spend or reinvest, which in turn stimulates the economy. The research on this is mixed, though the tax cuts of the Reagan years ballooned the federal deficit.

Whether average Hoosiers will have more money to spend on what matters to them remains to be seen.

After a lot of rumors about what is in the plan, the version finally unveiled Thursday does simplify the law, including reducing the number of brackets from seven to four, with people making more than $1 million a year taxed at the rate of 39.6 percent. The corporate tax rate would be cut from 35 percent to 20 percent.

Simplifying the tax code is a good idea. I would love to file my taxes on a single sheet of paper without the help of expensive software or having to hire an accountant.

Reducing the corporate tax rate makes a lot of sense if it means getting rid of loopholes that provide incentives for companies to ship jobs and cash overseas. Most businesses currently pay nowhere near the current 35 percent rate thanks to those loopholes.

But is the tax reform good for ordinary Americans like us? Maybe, but before we fall in line with Americans for Prosperity, let’s make sure we know who is really rigging the system.

Janet Williams is executive editor of TheStatehouseFile.com, a news website powered by Franklin College journalism students. She can be reached at jwilliams4@franklincollege.edu.

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