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Thursday, April 27, 2017

The Actual Tax Plan and The Inevitable Response

President Trump unveiled the outlines of his tax plan yesterday.  No matter what he put in the plan, the attacks from the Democrats and the mainstream media came quickly and predictably.  The banner headline in the New York Times today proclaims that the Trump tax plan helps the wealthy.  Bloomberg News has a piece out about how the tax plan is just another broken promise by Trump.  Then there are multiple reports about how the tax plan is designed to reduce the taxes paid by the President and his family.  Finally, we get the strangest attack of all; the Democrats are lamenting that the tax plan will increase the deficit.  I really wonder if any of them bothered to read the plan.

Let's look at the objections.

1.  The Trump tax plan will increase the federal budget deficit.  It is obviously hysterical that the Democrats are complaining about this.  In the last eight years when the Democrats controlled the White House, the federal debt climbed by more than in all the other years in American history combined.  This is not the pot calling the kettle black; it is a nuclear bomb calling a firecracker dangerous.  But let's put aside the incredible hypocrisy from the Democrats and their media allies.  Will the Trump tax plan increase the budget deficit?  That is not likely over the long term.  The tax reductions should pump up the economy in a major way.  That will mean more jobs and fewer people getting government support.  That will mean more income for the American people and thus higher tax revenues even if paid at a lower rate.  In short, once one considers the likely effect of the tax cut, there should be a lower deficit, not the reverse.  But..but..but, the media will tell us about what some "expert" predicts or what the CBO eventually says.  Remember, all these supposed experts do not consider the impact of the tax cuts.  They assume that the economy will be static.  The lower revenue taken due to the cuts will not create new sources of revenue in their calculations.  Imagine a person who cuts their intake of calories by one half and increases exercise greatly; then imagine an "expert" who tells that person that he or she won't lose weight.  That's basically what these "experts" are saying to us.

2.  Well won't the Trump tax plan help the wealthy?  Is the NY Times correct?  Of course, the tax plan will help the wealthy; they are the ones who pay most of the taxes.  The point here, however, is that this tax plan will help middle income and poor people as well.  If this tax plan leads to the creation of five million new jobs, who will fill those positions?  That will be the middle income and poor people.  And if the tax plan leads to higher levels of income for everyone, is that a problem if the wealthy also get part of that increase?  Nope.  All of America will benefit from the tax cut.  The argument that the wealthy might be helped is the rough equivalent of being against health care for the poor (Medicaid) because the money paid by the government to doctors will help the wealthy--after all, those doctors are rich.

3.  So is the tax plan a broken promise by President Trump?  Not really.  Indeed, not at all.  Bloomberg pushes this idea because this is not a tax cut for only the middle class and Trump said he wanted a middle class tax cut.  That's a phony claim by Bloomberg.  During the campaign, Trump called for a corporate tax cut (which is in the plan).  Those companies are not middle class, but this is still what he promised.  During the campaign Trump spoke of a middle class tax cut, but that did not mean that no one else could benefit.  Indeed, the President made it clear that he wants to jump start the economy to help EVERYONE.

4.  That leaves the nonsense about how the tax plan will help Trump and his family save on taxes.  This argument is really insulting to the intelligence of most Americans.  Do the media and the Democrats really think that Americans are so dumb that they would believe that President Trump is trying to change the tax laws so as to save money himself?  He already has more money than he could ever spend.  He has divorced himself from the management of his company, so he is not focused on his own taxes.  It's just such a stupid point that it is not worth saying more about it.


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