US can’t afford not to raise corporate taxes » Albuquerque Journal


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Sorry, but working stiffs are in trouble.

UNM Professor Allen Parkman’s article in the May 18 edition of the Albuquerque Journal points out an obvious consequence of higher corporate taxes. He appears to be against higher corporate taxes because corporations just pass costs on to consumers who buy their goods and services, thereby raising costs beyond buyers’ – foreign or domestic – willingness to pay.

I get it. But the argument in favor of raising corporate taxes is that corporations have in recent years paid far less than their fair share toward government efforts to fund programs and new spending – such as projected spending on infrastructure and social programs. Parkman is correct in assuming costs of goods will be impacted. Demand may plummet, as people here and abroad tighten their belts. The pandemic will have its long-term effects on buying. At the same time, in the absence of a requirement corporations take on greater tax burdens, ordinary citizens would need to tighten belts even more than they already have to survive. The consequences would appear to be economic stagnation, continued risk of high unemployment, and an eventual shrinking of corporations’ abilities to thrive.

This is a dilemma with which the current administration must contend. As I understand it, the administration’s infrastructure proposals are a calculation to refuel the economy by putting more people to work on projects that build and improve the country’s economic self-sufficiency – to expand governmental spending as a tool for rebuilding a weak economy and reposition us more strongly as a producing nation others will once again look to. One positive consequence for corporations is the probable repurposing of their assets along new avenues of production, while they find ways to cut production costs for existing products in order to find continuing traction among buyers here and abroad. Natural consequences for a while will be for people to buy less, for prices to rise and for production of big-ticket items to slow. So be it if in the longer term, employment and wages rise and corporations have to re-prioritize. A side benefit may be greater overall earnings in the private sector that can refuel the growth of small businesses and opportunities for startups. This re-balancing of wealth would be very healthy for everyone in the long run – the ordinary citizen as well as the wealthy looking for new opportunities to invest.

This approach would seem to be an intelligently calculated risk. The alternatives would appear to be continued shrinking of wages, exacerbation of unemployment and a concomitant risk of civil unrest, as corporations and the wealthy dis-invest, contract and conserve their holdings.

I appreciate Parkman opening the door to discussion. At the same time, I feel we are living in times that risk too much without the new “New Deal” being offered in Washington.

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