The (Colorado Springs) Gazette, Dec. 20, on the potentially broad benefits of the federal tax overhaul:
“We the people” will receive the most substantial tax cut since 1986, when President Ronald Reagan signed a bill that unleashed one of history’s longest and most broad-based economic expansions.
Holiday gifts cannot get better than the tax bill the House and Senate finalized this week.
“On February 1st, look at your paychecks,” said Rep. Kevin Brady, a Texas Republican and chairman of the House Ways and Means Committee. “You’ll see the tax relief we delivered today. And on April 15 you will, for the last time, file your taxes under this horrible, terrible tax code that we’re putting behind us.”
Speaker of the House Paul Ryan declared “we’re giving the people their money back.” Ryan promised the typical family making the median household income will get $2,059 in tax relief next year alone.
“For all those millions of men and women in America who are living paycheck to paycheck, who are struggling to get ahead, help is on the way,” Ryan said.
Said House Majority Leader Kevin McCarthy of California: “For every American who fought for a pay raise, for every parent, for everyone who ever dreamed of opening a small business or being an entrepreneur, I want you to know we heard you.”
Entrenched political division made this bill sadly partisan, unlike Reagan’s bipartisan reform.
The bill reduces rates for five of seven tax brackets, giving broad-based relief for most American households and small businesses. It is pro-family, doubling the child tax credit. It substantially raises standard deductions for individuals, heads of households and couples.
The bill eliminates the Affordable Care Act mandate, a tax so burdensome about 36 million Americans refused to pay it or chose a punitive penalty instead.
The cornerstone of the bill slashes the top corporate rate from 35 percent to 21. This reduction helps every American, regardless of economic standing.
Corporations are the primary source of wealth to distribute through wages, charity, government aid and more. President Barack Obama advocated reducing the corporate rate from 35 to 28 in 2012, knowing it harmed our economy, but did not garner adequate congressional support.
American corporations pay a tax rate about 10 points higher than competitors in other developed countries. As such, they are not cost-competitive. They ship jobs and currency overseas to avoid excessive taxation. Corporations that produce stateside pass along costs associated with income taxes, like other overhead, in prices charged to consumers.
“A corporate rate of 35 percent is not intended to reel in revenue,” said economic historian, professor and author Brian Domitrovic, who earned his doctorate from Harvard. “If that is the intent, it has done very poorly throughout the 2000s at bringing in revenue. In nominal terms, we’re at about the level of corporate tax receipts as in 2007, not even adjusting for inflation. That’s lame. It is doing nothing in terms of alleviating the rest of the tax burden.”
Politicians have ratcheted up corporate taxes since the early 1990s, structuring loopholes to appease corporate lobbyists. Think of corporate tax breaks as a special currency only a few can manipulate. The costs fall on consumers with the velocity of hailstones.
“The real function of a corporate tax hike is to confer value to tax exemptions,” Domitrovic said. “The rising corporate tax rate has rewritten business plans all over the Fortune 500, in such manner as to game the 35 percent rate. All it means for the economy is slower economic growth and fewer wages. There is no school of economics that says the wage earner and consumer don’t pay the corporate tax. The wage earner and consumer pay all of the corporate tax.”
Contending with the highest tax rate in the world, some corporations climb the Fortune 500 by spending more energy on sure-bet tax maneuvers than the potential rewards from investments in ideas and people to pursue them. Boeing, General Electric, Verizon and 23 other Fortune 500s paid almost no federal income taxes for the past decade.
“The classic example is General Electric, under former leadership of Jeff Immelt,” Domitrovic said. “GE was paying an astonishingly low portion of cash flow in taxation, and that’s because it so successfully navigated the 80,000-page tax code. The energies of GE were devoted to understanding and exploiting the tax code, as opposed to producing great new products in this era of the tech revolution and all the unbelievable opportunities in the real economy.”
“The 35 percent corporate tax rate is beloved by the Fortune 500. The Fortune 500 is the Fortune 500 because of the 35 percent tax rate.”
With a 21 percent corporate rate, we may see substantial disruption of today’s Fortune 500. Rather than chasing tax abatement, more companies could return to seeking profits through domestic innovation and production. After Reagan slashed the corporate rate, upstarts replaced nearly 80 percent of the Fortune 500 by the turn of the century.
“There will be a lot of churning, and most of that will result, net, in tremendous levels of new employment and prosperity,” Domitrovic said.
Only time and results will reveal the true upsides and downsides of the tax plan. Heading into 2018, we hope and pray these tax cuts bring new hope, opportunity and more income to Americans from all walks of life.
Editorial: http://bit.ly/2ktar0a
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The (Greeley) Tribune, Dec. 19, on Salvation Army bell ringers:
The arrival of the Christmas season means a lot of things in our culture.
Christmas lights start popping up in earnest and lines at retailers seem significantly longer than normal.
And, though it may be easy to ignore, another sign of the holidays is the quiet “ding ding ding” made by Salvation Army bell ringers standing in front of stores trying to raise money for the organization. They’ve become so common and so expected around Christmas time, they can be easy to walk right past without a second thought.
We think Salvation Army bell ringers warrant more attention than that. Don’t misunderstand, we’re as guilty as anyone when it comes to disregarding them as we go about our daily business. But when considering what these people are trying to accomplish - not to mention how much of their personal time they donate to do so - is it really so hard for us to do something simple like say hello?
Some people might have the desire to do even more and pick up a bell themselves. But for the rest of us, simple acknowledgment might be a great way to let these volunteers know we appreciate what they’re trying to do for our community.
We know time is tight this time of year. You just waited in an unusually long line and you might even have some of those Christmas lights to put up.
But hello doesn’t take very long, and we have a sneaking suspicion we’re going to find out our bell ringers are some pretty nice people, too.
Editorial: http://bit.ly/2oZwX5t
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The Pueblo Chieftain, Dec. 18, on the state of the Colorado State Fair:
The Colorado State Fair has shown a profit for two years in a row, encouraging the management to say it is here to stay in Pueblo.
“As our financials settle in - and next year, when this year’s audited financials are available - I think those who review the documents will see that we’ve made significant progress and will continue to make progress in the future,” Fair General Manager Sarah Cummings told The Chieftain recently.
Cummings was equally firm about putting to rest the perennial talk from Denver about relocating the Fair to the metro area.
“In my personal opinion, I feel that the Denver market is oversaturated as far as entertainment options,” she said. “And the State Fair is a great way to showcase agriculture and entertainment in an area that is deserving of it.”
Cummings was upbeat following a recent retreat attended by the State Fair board and Colorado Department of Agriculture to review this year’s 11-day run and start planning for 2018. This includes continuing efforts to expand the use of the State Fairgrounds year-round, a key ingredient in the Fair’s long-term stability in Pueblo.
Optimism for a bright future is catching on at the Colorado State Fair.
Editorial: http://bit.ly/2BpawMM
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(Fort Collins) Coloradoan, Dec. 15, on utility’s carbon-neutral plan:
Platte River Power Authority sent a shot across the bow of the status quo on Dec. 7 when it unveiled a study outlining how it could achieve carbon-neutral energy production by 2030.
The wholesale electricity provider that keeps the lights on in Fort Collins, Loveland, Longmont and Estes Park outlined a plan that, if followed, would eliminate PRPA’s reliance on coal by greatly increasing its solar and wind generation capacity, and selling carbon credits related to excess electricity generated by those means to offset emissions from burning natural gas.
The study released is the first of what PRPA expects will be many as it charts a future for meeting the energy needs of the rapidly-growing municipalities it serves. It concluded that while a switch to carbon-neutral energy generation would be more costly than the status quo through roughly 2040, it would begin to realize savings before 2050.
PRPA hasn’t committed to the shift as outlined, but a vote by its board to support the purchase of 150 megawatts of new wind power capacity certainly signals the organization’s intent to move in that direction.
We at the Coloradoan Editorial Board believe that the greater Northern Colorado community needs to take notice as PRPA takes the long view on its energy future.
Just as it’s imperative that PRPA get this right - its production costs would escalate beyond the status quo beginning in 2024 if the plan as released is followed - it’s important to look at how this change would ripple through other facets of our community and areas beyond.
Coal represents 42 percent of PRPA’s energy generation capacity today, and the links that bring the fuel from the Antelope Mine in eastern Wyoming to PRPA’s Rawhide Unit 1 coal-fired plant north of Wellington provide hundreds of jobs in Colorado and Wyoming.
The region’s education infrastructure must be prepared to retrain current employees to work in the wind and solar spheres while preparing today’s students for jobs in the emerging clean energy industry. Communities like Craig and Gillette, Wyoming, will need care as the future of their coal-reliant economies clouds amid a shift to renewables.
The good news is that with Poudre School District, Front Range Community College and Colorado State University, Fort Collins is well positioned to tackle some of those challenges, and to potentially disrupt the energy sector in ways that would aid PRPA’s carbon-neutral goals.
CSU’s Powerhouse Energy Campus is a leader in developing a sustainable clean-energy future. Local companies like Prieto Battery, which is working on new lithium-ion battery technology that has shown enough promise to gain investments from Intel and Stanley Black & Decker, show the potential to revolutionize energy storage - one shortcoming of a switch to wind- and solar-based energy generation and transmission.
County and municipal leaders will be tasked with making smart decisions about the placement of wind and solar installations, taking into consideration their impact on the views from cherished public spaces and residents’ ability to generate their own electricity through small-scale systems.
PRPA will also need to keep an eye on the horizon, as early entry into the carbon credit market would position it as a leading seller of renewables while at the same time marry it to a potentially volatile market.
Today, in 2017, it’s impossible to see how all aspects of this plan would play out into our future. But with higher costs being the only certainty in our region’s energy future, PRPA’s long view is worth our continued attention.
Editorial: http://noconow.co/2B8ecOG
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