It's time to enact tax policy that works

I appreciate the work that Greater Mankato Growth does in the areas of economic development, local promotion and tourism. However, their recent editorial, "Extending 2017 tax law vital for economy" neglected to address the unintended consequences that have arisen from previous tax cut policies of this size.

Research from the Brookings Institute, Forbes and the Center for Budget and Policy Priorities all agree — both the 2003 Bush and the 2017 Trump tax cuts failed to deliver the hypothetical economic benefits that were promised and significantly increased the national debt.

The 2017 tax cuts did not create an investment boom or noticeably accelerate business expansion or employment. Instead, corporations used a vast majority of the tax cuts to buy back their own shares, pay larger dividends and keep shareholders happy. Corporate tax rates were decreased from 36% to 21%, which reduced the revenue needed for community investments, health care, education, transportation and scientific research.

In 2024, the Tax Policy Center estimated that households with incomes in the top 1% had received an average tax cut of $61,000. In comparison, households in the bottom 60% received a tax cut benefit less than $500. Extending these tax cuts will add $4.5 trillion in deficit spending and put the fiscal future of the next generation in jeopardy.

Tax policy should be amended periodically — especially to legitimately encourage capital investment and job creation. Changing demographics and the aging of our society also necessitates a responsible plan for the future.

Now is the time to enact effective and productive tax policy that works — and not to renew tax policy that falls short of its goals.

Roxanne Johnson

Mankato