To the editor:
For most of my lifetime we’ve been told that tax cuts benefit the economy. This makes sense. If Americans pay less in taxes, they’ll have more money to spend on consumption, which we know is what drives the U.S. economy. But is that always the case?
What happens when most of the tax cuts benefit the rich? Do the rich spend more, and does that spending “trickle down” to the rest of the economy? This leans into a matter of debate. Certainly, if wealthy Americans have more money we should assume they’ll spend more money. But what do wealthy Americans buy? Islands? Crypto? A.I. focused private equity funds? Does a wealthy person buying an interest rate swap or a forward contract on crypto currency really translate into economic growth in Alexandria, Minnesota? Will the spending of billions of dollars on A.I. supercomputers by big tech companies result in American job growth?
A median-income household can expect to save around $3,000 each year on federal taxes under the One Big Beautiful Bill. Elon Musk was just awarded $29 billion if he shows up to work at Tesla for the next two years. That translates into Musk earning $3,000 every SIX SECONDS, day and night, seven days a week, 52 weeks a year. If we do a quick calculation, Musk will save $750 million in federal taxes over the next two years because of the OBBB. That is equal to the tax savings of 125,000 average American households over the same period. Is Elon really going to buy 125,000 new dishwashers, or lawn mowers, or trolling motors?…
Our national debt is becoming unsustainable, while at the same time billionaires roll around in inconceivable wealth. Will the OBBB harm our economy? We’re about to find out!
Matt Bluett
Alexandria, MN