During my lifetime, politicians have championed failed campaigns for tax cuts. They have exceeded expectations in reducing the taxes paid by the wealthiest Americans while shifting the tax burden to those who can least afford it. Consider this- low-income Americans (and all other Americans) pay a greater share of their income to taxes than the wealthiest top .1%. Politicians don’t really ‘cut taxes’, they ‘shift them’. They shift taxes paid from income taxes to sales taxes, payroll taxes, real estate taxes, local taxes, and other taxes. If you feel like you are paying more taxes for every ‘tax cut’ it’s because you probably are.
The tax cuts from Ronald Regan were followed by payroll tax increases. The Bush tax cuts reduced funding to the states resulting in states raising taxes. Tax cuts from Governor Kasich led to increased sales taxes, real estate taxes, and gas taxes. We have reached the point where the less you make the more you pay. In Ohio, the top 1% pays about 8% in state taxes while the bottom fifth pay almost 12%. Income taxes go down and other taxes go up.
While we have shifted the tax burden to the middle class and those at the bottom, upward mobility has declined, income inequality has exploded and now the expectation is our children will do worse than us if we are not in the top income brackets.
Results of our Tax Policies
The result of our tax policies makes sense; this regressive tax system puts small businesses and households with low or moderate income at a disadvantage. How can small businesses compete against the tax advantages of larger corporations? Average households find it harder to get ahead while those at the top have the cards stacked in their favor. Our economy is dominated by bigger and bigger corporations that crush their competition and extract revenue from our local economies. Our tax policy has made us poorer and less connected to local businesses and our communities.
All the problems these ‘cuts’ produce have got us clamoring for more- ‘tax cuts.’
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