Dear editor:
In a letter by Mr. Noah Little on Aug. 16, he attempts to criticize the positive effects of the GOP tax cuts. Pretty much a losing tactic by the Democrats, of which I assume he is one.
First off, he attempts to use a small rise in prices over the past few months. What he doesn't realize is that it's a positive sign that the economy has taken off. People are feeling more positive and confident, and have a few more bucks in their pocket, thus they are purchasing things and the product providers have not caught up. This inflation is called demand-pull inflation. Demand-pull inflation occurs when aggregate demand for goods and services in an economy rises more rapidly than an economy's productive capacity. Now to be fair, gas prices have risen some, as well, and have contributed to inflation.
Next, Mr. Little attempts to show that wages are stagnant and thus, the tax breaks have not worked in that regard. However, what he fails to mention is that wages have been stagnant for decades, so to try to justify the tax breaks being a failure based on that doesn't wash.
Finally, Mr. Little shows that many companies did not share their tax savings with their employees (assuming his stat is correct). I'm sure that's true to some extent; the companies might have used the extra cash to make capital improvements, hire more workers (unemployment rate is at record lows) or reward their investors. However, many companies did share their tax savings with employees -- companies like Apple, Walmart, Comcast, CVS, Home Depot, Lowes, Boeing and many others. His point here doesn't hold water, either.
Concerning his last comment that the cuts will add to the deficit, as I've mentioned in past letters, in the short term (a year or two), that's true, but if you look beyond that, tax cuts from JFK, Reagan and Bush have all eventually increased tax revenue (IRS tables) due to the stimulative effect they have on the economy. According to the CBO, revenues have been predicted to significantly increase after 2019. Excessive spending in the long term adds to the debt, not tax cuts.
The tax cuts and deregulation have had a positive effect on the economy, as evidenced by the strong increase of GDP, the low unemployment rate and the number of people on welfare, and food stamps have fallen. All are facts and all are good things!
Mike Williams
Hot Springs Village
Editorial on 08/18/2018