Results of 'reform'

On March 19, Guest Columnist Karen Madonia, Chief Financial Officer of ILLCO, writes that she worries that the recent tax cuts will not be renewed when they expire in eight years. As someone who has taught small business strategy and worked with family businesses, I think that most business owners would agree.

From a macro-economic perspective, there's much worse with the new tax law. All the money for the tax breaks is borrowed. This is a bit like increasing your annual income solely by taking on more debt each year, hardly a viable strategy for a business or a nation.

And, since our economy is already operating at what economists consider full employment, instead of protecting jobs, the new money will just cause inflation as employers bid against each other for the few workers that are available.

And it doesn't appear that there will be more than a modicum of new investment, since corporations are using most of their tax savings to buy back their own stock. The only effect of this tactic is to increase price per share, which is part of the reason for the stock market surge in the first quarter of 2018. The main ones to benefit are the superrich, who own most of the stock, not the average person or small business owner.

So, here's what the tax "reform" has accomplished. It has increased national debt by about $1 trillion net. It has had minimal if any impact on the already-low unemployment rate. It will likely cause inflation. And it has concentrated our nation's wealth even more in the hands of those who are already superrich.

Darold T Barnum

Oak Park