“Tax cuts pay for themselves!” The evidence says otherwise.
So I am reading a piece in CBN, (“The Christian perspective©”) titled Trump Seeks to Balance Budget as National Debt Crisis Reaches $22 TRILLION. After the tax cut for the wealthy it was inevitable that this would occur.
The CBN piece written by Ben Kennedy is nonspecific about what will be cut but you can be sure that those cuts will not affect business “incentives.” Likely cuts will be to programs that lower income Americans depend on. Lower and middle income Americans are about to pay for the tax cuts that are enjoyed by our wealthiest citizens.
“It is headed to $23 trillion and neither party seems to be able to do anything to stop this crisis of national debt,” said Stephen Moore, a senior fellow at the Heritage Foundation and one of President Trump’s former economic advisors.
Moore believes nothing short of a war on wasteful spending will change the tide. He says lawmakers need to breakaway from the ‘use it or lose it’ spending spree.
Reagan started supply-side economic nonsense. Over eight years the national debt nearly tripled. Moreover, a year after Reagan’s biggest tax cut he was forced to sign TEFRA into law. TEFRA raised corporate rates, eliminated a number of deductions and increased payroll taxes.
Needless to say, Reagan was no economic wizard. Trump is not as smart as Reagan and his economic adviser is dependably wrong on everything:
Moore says one way to end that is to offer incentives, even bonuses to lawmakers who find ways to cut spending.
“The president is concerned, he’s always been concerned. The way to get at that is to first of all keep the debt burden down on the economy,” said Larry Kudlow, Trump’s director of the National Economic Council.
Kudlow recommends growing the economy to the max by not raising taxes, offering incentives like Moore suggested, and encouraging business confidence.
“Congress and the President should insist that in exchange for raising that debt ceiling we have spending cuts that make sure we’re not going to $30 trillion over the next decade,” said Moore.
This is all about politics. No politician wants an ad running in 2020 with: “[Congress Critter] voted to raise taxes.” What Kudlow does not address is the fact that government spending is stimulative.
Suppose, for example, there are cuts to Medicare raising out-of-pocket expenses for seniors. They, in turn, will have less disposable income which means that they will spend less on goods and services. The deprived businesses will earn less and pay less in taxes. They might also employ fewer people.
The above is an example of “trickle-down” economics that does work — in the wrong direction.
Instead of putting a dent in the lives of poor and lower income people, perhaps they should figure out (and correct) how Amazon, for example, pays no corporate taxes. Perhaps a greed tax is in order to address obscene executive compensation plans.
As a consequence, businesses retain more earnings and they might use capital in far more stimulative ways than individuals would which will raise tax revenues accordingly.
Also, consider this. As of February 11, 2019, 204,044 tax-exempt entities, required to file a form 990, have not done so for 2017 — four months beyond any possible extension of time. One of those is the Knights of Columbus which had 2016 revenues of $4,690,261,927. Some of those revenues were tax-deducted by individuals. Or how about the National Christian Charitable Foundation with 2016 revenues of $1,674,081,615? Every dollar of that was tax-deducted.
They have a total of eleven months to file a return. If they are unable to do so then their tax-exempt status should be gone until they do file.
I do not have the ability to predict the future. However, just common sense suggests that we are much closer to the end of the current economic cycle than the beginning. If spending cuts further deteriorate the safety net (which is already full of holes) people; men, women and children, are going to suffer.
Conservative lore holds that people have lower incomes because they are lazy or corrupt. It is built, in part, around welfare queen mythology. This makes it morally permissible to deteriorate needed assistance. We have become a country, and an economy, built on greed. We are also going broke!
I am looking to a fight over the debt ceiling in order for the GOPers to try to blame democrats. The debt ceiling, of course, is for money already spent. It is a meaningless political device which seems to fool many people.
If we did not have low information voters with an extreme confirmation bias we would be a much better country. We would be healthier and more prosperous. But that’s not the case. The schmuck sitting in the Oval Office is exhibit A of our collective stupidity. A ship of fools.