1) we knowingly grow the deficit, even eagerly do so under the two plans.
2) individuals are being sold a lie re individual tax cuts for them. They will phase out.
The cuts for corporations and for pass-through income (S-Corps, one of the income drivers for very wealthy people) remain.
As for lower taxes on companies benefiting people…
They aren’t investing because they have more cash. We’ve seen this with prior cuts as well as with the cash buildup following the crisis.
With these lower corporate tax rates, we need to stop the revenue transfer that takes place. (create a “license” agreement to use a product name in your Ireland division. Then “license” the name and rights to sell related products to the US division for absurd fees that literally shift all profit to Ireland). These are tactics openly discussed during earning calls.
If we say we should simply match the international average tax for corporations, then we also need to look at matching the relative expenditures of these countries’ governments as well.
Military budgets – we spend 8-10 times that of any European country and 4+ times that of China (the next largest military budget).
There are only 3 countries that spend more per capita on the military than us. Israel and Saudi Arabia (for understandable and similar reasons), and Singapore (an outlier that is baffling).
While the US has the highest cost per capita in healthcare, the government’s share of that is not nearly the highest (as a percent and in absolute dollars). We are lower than some and right in line with most developed nations.
Social Spending (basically helping people), we ranked about 20th relative to domestic GDP.
The United States doesn’t even make it into the top 10 for infrastructure expenditure per capita. The overall state of infrastructure didn’t even rank in the top 15 of nations.
I’m not a “tax them till it hurts” guy. I just have an issue with cutting revenue and not cutting expenses at all.
If we can implement a simplified tax code that says everyone pay x% and still afford to run the country, that’d be great. However, I can handle 15 – 20 % tax, someone making $25k a year may not be able to handle that and still put a roof over their head, get clothing and food. I don’t know what to do about that end of it because you then start getting into deductions again.
The $1T average is a bit misleading.
We ran a surplus at the end of the 90s into the Bush Admin.
Then we had tax cuts and initiated a war in Iraq.
Then we had the financial meltdown.
The 1.3 – 1.4T deficits for a few of those years were widely believed by economists and those on both side of the aisle as necessary to prevent a complete collapse of the economy.
Year Def Debt Chg %GDP Reason
1998 ($69) $113 (0.8%) LTCM crisis
1999 ($126) $130 (1.3%) Glass-Steagall repealed
2000 ($236) $18 (2.3%) Surplus.
2001 ($128) $133 (1.2%) 9/11 attacks. EGTRRA
2002 $158 $421 1.4% War on Terror.
2003 $378 $555 3.2% JGTRRA
2004 $413 $596 3.3%
2005 $318 $554 2.4% Katrina. Bankruptcy Act.
2006 $248 $574 1.8% Bernanke chairs Fed.
2007 $161 $501 1.1% Iraq War cost
2008 $459 $1,017 3.1% Bank bailout. QE.
2009 $1,413 $1,632 9.8% Stimulus Act
2010 $1,294 $1,905 8.6% Obama tax cuts. ACA. Simpson-Bowles.
2011 $1,300 $1,229 8.3% Debt crisis.
2012 $1,087 $1,276 6.7% Fiscal cliff.
2013 $679 $672 4.1% Sequester. Government shutdown.
2014 $485 $1,086 2.8% Debt ceiling.
2015 $438 $327 2.4% Defense = $736.4 b.
2016 $585 $1,423 3.1% Defense = $767.3 b.
2017 $666 $672 3.4%
It’s one thing to get hit with a crisis. It’s another to plan a deficit.