Taxes

Make America Broke Again

JM Ashby
Written by JM 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.

  • Aynwrong

    This is what I think most of us here understood before the election. Trump isn’t going to change the Republican party. It changed him (so to speak). The moment he was elected a repeat of some of the worst elements of the Bush Administration were all but guaranteed.

    Republicans are either incapable of learning from their own mistakes or they simply don’t care.

    • muselet

      I vote “don’t care,” only because Rs think policies that push wealth upward aren’t mistakes.

      –alopecia

    • ninjaf

      Exactly. He is a blank slate ripe for anyone to put their ideology on. So long as it can be shown that somewhere in all of that he will make money, that’s all that matters.

    • Victor the Crab

      I’ll go with both.

  • Scopedog

    Well, there it is. I’d love to see how this bullshit gets spun into silk by the GOP.

    • ninjaf

      It will just be ignore and not injected into the echo chamber. Problem solved.

  • muselet

    Donald Trump’s (at present, entirely imaginary) tax cuts would devastate the US economy. The sad, recent experience of Kansas tells us that.

    The same sad, recent experience of Kansas also tells us the Cult of the Magic Asterisk would insist the resulting economic wasteland is actually the fault of die-hard Keynesians who refuse to cut taxes enough for the full, Reaganesque miracle of 20% annual GDP growth and negative unemployment to occur. Meanwhile, the faltering US economy would cause a global collapse that would make the Great Depression look like an economic boom. That would lead to loud calls for more tax cuts because obviously they’re still too high. Rinse and repeat.

    We’ve seen this movie before. We don’t need to see it again.

    –alopecia

    • ninjaf

      Couple this with the effects of climate change and all of a sudden we are living Water World/Mad Max/Idiocracy/pick your favorite dystopian future.

      • Aynwrong

        My favorite dystopian future has always been that of Blade Runner. It would never come to pass under Drumpf. It’s not nearly amoral enough and it would need more gawdy.

        • ninjaf

          I’ve not seen Blade Runner but it is always something I mean to rectify and never seem to get around to.

          • Aynwrong

            Definitely worth it. In my opinion.

          • Scopedog

            It is worth seeing. To be frank, it’s the most influential science fiction film of the past 40+ years (yes, even more so than 2001 and Star Wars.

            You can see it now, before the sequel, Blade Runner: 2049 comes out in November.