Taxes

Make America Broke Again

Written by SK Ashby

While Trump's tax cut "plan" would actually raise taxes on middle and lower income earners while cutting taxes for the rich, it would also reduce federal revenue by an insane amount according to the Tax Policy Center.

President Donald Trump’s proposed tax cuts would lower federal revenue by $7.8 trillion over a decade and mostly benefit the highest earners, according to a new study released Wednesday by the nonpartisan Tax Policy Center. [...]

When accounting for suggested revenue-raisers like ending most itemized deductions and personal exemptions, the 10-year revenue loss under the Trump tax plan would be $3.5 trillion, the study found. And the top 1 percent’s gains would be 11.5 percent, while middle-income gains would be 1.3 percent, the report said.

Obviously, you can't shave off this much revenue and not have it affect the entire economy and virtually every government program. Not even defense spending would be safe.

Trillions of dollars less in revenue means trillions of dollars less in federal spending. And where does all of that spending go? It goes directly into the economy. It increases demand and pays salaries.

The Tax Policy Center produced another model that included so-called "dynamic scoring" (growth that would magically trickle down) and found that federal revenue would still be reduced by $7.7 trillion (or $3.4 trillion including raisers) over a decade.

We don't need to gaze into a crystal ball to know how this would turn out. The Bush Tax Cuts and, more recently, Kansas Governor Sam Brownback's tax cuts have conclusively proven that it doesn't work. And Trump's tax cuts would be far worse than either of those examples.