Opinion: Why tax cuts for the wealthy will explode the deficit but not economic growth

To the editor: The logic of the Trump tax plan is fatally flawed. (“Trump promises big tax cuts, but GOP-led Congress is already thinking about scaling back,” Oct. 11)

The biggest target of his tax plan is the “high” 35% corporate rate. However, the effective rate for most companies is much lower because of numerous deductions, loopholes and tax incentives.

Equally as important, corporations today are sitting on almost record amounts of cash. If companies are not using that cash to create new business and new jobs now, why would still more after-tax cash accomplish that result?

So the reduction of corporate tax rates and the proposed reduction of tax brackets will create massive additional U.S. debt, which will actually slow the economy and is exactly what virtually every Republican has railed against for years. Also, the elimination of the estate tax would benefit only the super-wealthy and add still more billions to the deficit.

The real way to create jobs would be a sharp tax reduction targeted to the lower and middle classes, who will then use the money to purchase more goods and services, which in turn will create new jobs and additional tax revenue.

Ken Goldman, Beverly Hills

The writer is a tax lawyer and formerly an advisor at the U.S. Treasury Department’s Office of the Tax Legislative Counsel.

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To the editor: Spending is what causes deficits, not “tax cuts for the rich,” as people in the tax-and-spend crowd like to put it. Reducing investors’ tax rates has a solid track record of increasing tax revenues, and this is obviously where Republicans are basing their hopes for stimulating the economy.

President Trump and the Republicans can bring in all the revenues they want, but it’s also a historical fact that any largess of tax revenues can still be spectacularly overspent. I have seen nothing to indicate that the GOP plans include reducing spending.

Patrick M. Dempsey, Granada Hills

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