November 16, 2017
NEWBURGH, N.Y. -
Dr. David A. Kennett, President of Mount Saint Mary College and an accomplished economist, presented “Some Tough Talk on Taxes” on November 14.
Dr. David A. Kennett, President of Mount Saint Mary College and an accomplished economist, dispelled rumors about tax revenue, demystified the national debt, and talked about the Trump administration’s proposed tax cuts at his lecture “Some Tough Talk on Taxes” on Tuesday, November 14.
One common misconception, Dr. Kennett noted, is that America is the most heavily taxed country in the world.
“If you look at percent of national income – gross domestic product – that goes to taxes, actually, we’re nowhere near,” noted Dr. Kennett. “We’re actually down near the bottom.”
The United States pays about 25 percent in taxes, while the heaviest taxed country in the world, Denmark, pays about 50 percent, Dr. Kennett noted.
Another misconception is that federal taxes have been growing over time. “We are about as taxed as we ever used to be,” Dr. Kennett explained. “We have a fairly persistent level of taxation somewhere between 15 and 20 percent, by and large.”
Dr. Kennett also shed some light on the National Debt, which is currently about $20 trillion. The nature of the National Debt has evolved in the last few decades, he explained.
“We should worry about the National Debt more than we used to,” said Dr. Kennett. “If you look at the National Debt, say at the end of the second World War, Americans owed almost all the debt to Americans. In that sense, there wasn’t a real burden…when the government paid off the National Debt, it would tax Americans to pay it, and then they would pay the money to Americans. …None of the money was going out of the United States.”
However, as the National Debt rises, the United States needs to look to other countries for aid. Currently, about one third of the debt – more than $6 trillion – is owned by countries like Japan, Russia, China, and Brazil.
“That does constitute a burden,” Dr. Kennett explained. “When and if we ever have to pay back that debt, we’ll have to tax Americans and pay [other countries].”
A focal point of the Trump administration’s agenda is cutting taxes. According to Dr. Kennett, there aren’t many Americans who stand to lose out under the administration’s proposed tax plan – at least right now. But as the plan would drive up the National Debt by about $1.7 trillion, the burden of repayment falls to future generations.
Of possible concern for people who live in the North East or West Coast, the proposed plan would phase out State and Local Tax Deduction (SALT). “It will affect New Yorkers, New Jersians, Connections, and Californians to the greatest degree,” said Dr. Kennett. People with large families might lose out as well, as they will be limited on their child deductions.
Some of those who stand to gain from the proposed tax plan are corporations, since the rate of corporate income tax would be cut; people who don’t itemize, because they will see their personal allowances double; and people who pay the Alternative Minimum Tax (AMT), as it would be phased out under the new plan.
Dr. Kennett is an accomplished author and frequent speaker on economic topics. He has authored four books and monographs to date on various economic issues around the world and numerous articles, papers, and speeches on global economic issues.
Dr. Kennett served at Vassar College beginning in 1976, with his most recent role being the Elizabeth Stillman Williams Professor of Economics. He has been a sought-after visiting professor at many colleges and universities around the world, an author of many books and papers, a frequent speaker, and a consultant providing his economic expertise to a broad range of both private and public organizations, including the U.S. Justice Department and The World Bank.
The lecture was sponsored by the Mount Saint Mary College Office of the President, the Kaplan Family Library, and the college’s iROC Seminar Series.
A recording of the talk is available at www.livestream.com/KnightProductions/KennettNov142017
Mount Saint Mary College is ranked a Top-Tier University by U.S. News & World Report, and offers bachelor’s and master’s degree programs for careers in healthcare, business, education, social services, communications, media, and the liberal arts.