Here’s hoping, during Vice President Mike Pence’s Iowa visit this week, someone had an opportunity to point out that tax cuts mean very little to people without income.
After reading Pence’s guest column, published Wednesday, I’m convinced the connection between tax cut benefits and income isn’t understood by the Trump administration. Of the 560-word Pence missive, just 23 words — one sentence — addressed trade: “And our President is fighting tirelessly to break down trade barriers, so Iowa farmers and manufacturers have new opportunities to export and expand.”
Arriving in a state where producers have seen corn prices drop as much as 10 percent on fears that big grain customers like China will look elsewhere, Pence was tone deaf. The bulk of his column referenced federal tax cuts, which Pence spun as a boon to Iowa workers.
Unfortunately most Americans don’t see tax cuts the same way, according to Wall Street Journal polling that documented only 27 percent support.
That’s likely because, as a report published Wednesday by the Institute on Taxation and Economic Policy notes, income inequality has soared, and such measures are making it worse. The wealthy are far head of everyone, while the upper-middle-class is widening a gap between itself and the working class and poor. The latest tax cut is viewed, rightfully, as one more break to the small segment of Americans who don’t really need one.
By the end of 2025, according to researchers, the tally of tax cuts will grow to $10.6 trillion, with nearly $2 trillion going to the richest 1 percent. When interest and other factors are included, the total impact to federal coffers is $13.6 trillion, or nearly as much as the $15.7 trillion national debt.
Is it any wonder workers in Iowa and across the country are wondering how we’re going to pay for it all, what safety nets may be cut and when the next fiscal shoe will drop?
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Coinciding with Pence’s Iowa visit was news from nearby DeWitt: Black Cat Wear Parts, a Canada-based manufacturer, is halting production because of steel tariffs and, as a result, laid off 10 workers and indefinitely postponed a planned Iowa expansion.
Newspapers are feeling the negative impact of paper tariffs. Last month the Pulitzer Prize winning Storm Lake Times said its costs would increase more than $27,000 this year; larger outlets are reporting increases in the millions. Papers with the least ability to absorb the pain are those that devote more ink to school sports and county boards than state and national politics.
Agriculture comprises about a third of the Iowa economy and, in 2016, plant product exports to China topped $1.2 billion. Those exports alone make up more than 10 percent of Iowa’s total agricultural output.
Fears about trade aren’t only tied the loss of this year’s exports or manufacturing jobs, but the ongoing risk that markets will permanently shift in favor of forces that have long stood ready to absorb American jobs or replace Iowa products in the international marketplace.
Tax cuts, inextricably tied to income, don’t address those concerns.
• Comments: @LyndaIowa, (319) 368-8513, email@example.com