Americans have been clear and consistent in their opinions that corporations and wealthy people do not pay their fair share of the tax burden. We’ve known and accepted this as reality for most of our lives with little or no government action to make the system more fair. This public opinion has been largely unaffected by politics,and it was reaffirmed last week in Gallup’s latest poll.
Yet everyone loves the idea of paying less taxes. Various economic arguments can be derived to support a tax cut: it stimulates the economy, creates jobs, attracts investment capital, etc.
Under the new Trump tax proposal, most of my small business clients would save substantial amounts. Some could avoid taxes altogether. Some of my business owner buddies are already discussing their next Porsche or Range Rover as an effect of this windfall. Accountants are excited; a tax cut is fantastic for our industry. A 15% corporate tax rate would bring tons of tax planning business and I could show most business clients how to reduce their taxes to almost $0.
But the questions remain:
- It a tax cut smart for the U.S.?
- Is a corporate income tax cut and cut for wealthy individuals fair?
- How will government cope with the large loss of revenue?
- How will the working class and poor be affected?
- How will our children and future generations be affected?
- Will Americans ultimately be sold on the idea of a tax cut?
We will certainly hear much more on this topic in coming weeks.