KEVIN LEININGER: If Trump’s tax plan helps only ‘the rich,’ why are so many Americans benefiting?

Tax reform gave many Americans a Christmas president, but President Trump's critics still said, "Bah! Humbug!" (AP photo)
Kevin Leininger

Over Christmas, critics of the Republican tax-reform bill played Grinch to President Trump’s Santa Claus, predictably whining about how only the rich would benefit. Why else would anybody cut the corporate rate from 35 percent to 21 percent?

Perhaps it was a rhetorical question, because basic economics and human nature provide the obvious answer.

When Allen County Council members last month wanted persuade Lippert Components to invest nearly $11 million in a new plant expected to create 135 jobs, they didn’t offer to increase the Elkhart-based company’s taxes. They approved an abatement that will lower the company’s taxes on new equipment and building improvements by $463,500 over 10 years. The company’s bottom line benefited, obviously, but so will the local tax base and the new workers who will be earning an average of more than $31,000 a year.

Even the leaders in China, where communism does not normally embrace lower taxes, seem to understand the concept. According to The New York Times, China will temporarily exempt foreign companies from paying taxes on earnings if they agree to invest the savings in sectors encouraged by the government, including railways, farming and technology. Trump, on the other hand, hopes the reduction in the corporate tax rate will induce American companies to withdraw the billions of dollars now stashed oversees and invest it in plants and people here.

It’s early, but some corporations appear to be doing just that.

Wells Fargo will increase its minimum hourly wage from $13.50 to $15 and increase charitable giving by 40 percent. Fifth Third Bancorp will also give a raise to 75 percent of its workers by boosting its minimum wage to $15. The bank will also award a $1,000 bonus to 13,500 employees.

About 200,000 employees at AT&T will also get an extra $1,000 after its CEO praised the tax bill as a “monumental step” toward creating “good-paying jobs.” Boeing’s CEO also credited the bill for the company’s plan to spend $300 million on worker training, upgraded facilities and a program that will match employees’ charitable giving.

Even Comcast, parent company of frequent Trump tormentor MSNBC, announced a $50 billion capital expenditure plan and $1,000 bonuses for 100,000 non-executive employees.

The principle holds: If you want less of something, tax it. If you want more of something, subsidize it. Tax cuts, however, are not really subsidies at all: They simply allow people to keep more of their own money and, hopefully, to spend it wisely, charitably and productively. How ironic it is to see officials in high-tax states such as New York and California lamenting how their residents will no longer be able to deduct their state and local taxes on their federal forms. Those officials would rather have taxpayers nationwide subsidize their profligacy than reduce the tax burden on their own citizens.

With a national debt of more than $20 trillion, it would be nice to see someone — anyone! — talking about spending cuts along with tax reform even if lower taxes do ultimately generate more revenue. But you can bet that omission doesn’t begin to explain why, according to the Pew Research Center, media coverage of Trump during his first 60 days in office was more than three times as negative as it was during President Obama’s term. Trump invited some of that negativity through ill-chosen words and gratuitous confrontations, but with consumer confidence up, unemployment claims at a 17-year low and the stock market at record highs, the benefits of the changes in the nation’s labyrinthine tax code may have only just begun.

Whether any of that influences the media’s coverage of Trump during the new year remains to be seen.

TRUST, BUT VERIFY

When a 22-year veteran of the Fort Wayne Police Department joined the Allen County Sheriff’s Department as an extra deputy hire in 2017, he was hoping to move into full-time status. Instead, he was terminated because, according to Sheriff David Gladieux, the county’s customary background check could not verify some of the items on the officer’s resume.

Gladieux wouldn’t say more, and the Fort Wayne Police wouldn’t say anything at all. I’m withholding the officer’s name in order not to embarrass him, especially if the problem centered around a relatively benign educational claim, as I’ve been told. But the incident does raise the obvious question: Does the FWPD need to improve its screening process before something more serious goes undetected?

This column is the commentary of the writer and does not necessarily reflect the views or opinions of The News-Sentinel. Email Kevin Leininger at kleininger@news-sentinel.com or call him at 461-8355.

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