Would Corporate Tax Cut Benefits Ever Reach the Middle Class?

By Alan Olsen
Would Corporate Tax Cut Benefits Ever Reach the Middle Class?

By now you’ve likely heard that President Trump wants to cut the nation’s corporate tax rate from its current 35 percent to 15 percent. Congress is on board with cutting the rate, but the agreement on this plan stops there. Not only has Congress proposed a rate of 20 percent instead of 15 percent, but tax experts, economic groups, and political pundits alike have all taken sides on the issue.

As you might expect, both sides have a strong case as to why this is a good or bad idea. On the one hand, those who agree with this kind of tax reform claim that when businesses and corporations are given a tax break they invest in their companies and in their employees, thus helping the middle class.

On the other hand, those who disagree with this approach claim that there is no evidence that shows this type of plan working. Detractors claim this will hurt middle America more because the business owners will keep the extra tax savings in their own pockets rather than paying their employees more.

Both sides have data, research, and studies to back up their claims. Some research shows that when corporate tax rates are higher middle class workers actually hurt more than the executives and owners. Thus, higher rates would only hurt employees more.

Of course, those on the other side have their own evidence and research to counter that argument. Thus, the only way to see the results of lower corporate tax rates would be to implement the plan and wait and see what happens.