It is absurd to think that corporations, particularly large, multi-national corporations who pay millions in stockholder dividends and corporate bonuses, should pay a lower tax rate than most working Americans. And yet, that is exactly what Donald Trump’s tax plan proposes to do. How would this happen? As it currently stands, the corporate tax rate sits at 35%. But many large corporations pay nowhere near that rate. Instead, most companies use a combination of loopholes and deductions to pay substantially lower rates. Some large corporations are able to get away with paying next to nothing -- less even than Trump’s proposed 15% -- in spite of being incredibly lucrative businesses.
Corporate loopholes and deductions have reached a point where if we closed them all, even if we slashed the corporate tax rate to 15%, many large corporations would be paying more than they do now in taxes. The problem is that Trump’s plan does nothing of the sort. Trump is not closing loopholes or making the tax code simpler and more equitable, he is essentially rewarding corporations for evading taxes and not contributing to the American economy.
Big corporations can afford to pay their fair share of the bill for running the country. They can afford to contribute revenue that we badly need to fix crumbling infrastructure and lagging schools amid other deficit related issues. Instead of focusing on lifting up the American systems and institutions that make our country great, Trump is slashing revenue with no plan to replace it.
Cutting taxes on large corporations will continue to increase the ever-growing gap of economic inequality in this country. It will either force cuts to important services that many working Americans rely on -- such as Medicaid, school lunches, and public transportation -- or it will force individual Americans, who cannot afford it, to pick up a bigger share of the tax burden. It is likely, in fact, that it will force both.
It is also important to note that this is a bit of a giveaway for Trump and his friends. Very wealthy people tend to have more of their money invested in corporations, and as such cutting the corporate tax rate is in many ways a huge personal tax cut for them.
We as a country simply cannot afford to cut the corporate tax rate. At least, not without closing the loopholes and eliminating unnecessary deductions that allow corporations to pay less than their fair share of taxes. If we want to build a more prosperous nation we cannot continue to buy into the falsehood that wealth will trickle down from wealthy businesses and individuals to the rest of the population. We cannot continue to allow our tax code to be manipulated in favor of the business interests of the wealthy. Sustainability and prosperity grow out of intentional investment in economic and political equality, and our tax code is a critical starting point for that.