Trump Proposes Exciting, Unrealistic Tax Plan

Analysis by Kyle A. Lohmeier

Yesterday, Donald Trump released a very brief outline of his proposed tax cuts and in the hours since then, pundits aplenty have weighed in on them. The reactions have been fairly typical and predictable: lefties cry endlessly about how the cuts will “only benefit the rich” and they still want to see Trump’s tax filings while right wingers offer empty explanations for how the huge cuts will be paid for. And of course, before they become law, they’d first have to be passed by congress and so those of us who were excited at the prospect of not being so thoroughly robbed might just want to calm down; whatever compromise that actually does get passed won’t be anywhere near this generous with our own money.

One of the whinier descriptions of the proposed tax plan comes courtesy of the New York Times, of course, in this case from Neil Irwin who doesn’t seem to like the idea of anyone keeping “too much” of their own property. He broke out the “winners” and “losers” according to the orthodox leftist interpretation of taxes and government.

“(Winners) Businesses with high tax rates. The plan would cut the 35 percent corporate income tax to 15 percent. While few businesses pay the full 35 percent rate, those that pay something close to it are in line for a huge tax cut,” Irwin whined, because it’s just unconscionable that a business would have less than a third of its profits stolen by an armed criminal gang calling itself “government.”

He doesn’t just begrudge businesses their rightful property, but individuals too.

“The plan would reduce the top rate on individual income tax — now 39.6 percent for income over around $470,000 for a married couple — to 35 percent. But that’s only part of the gain for high-income earners. It also would eliminate a 3.8 percent tax, used to help fund Obamacare, that applies to investment income over $250,000 for a couple,” Irwin cried.

So, a 4.6 percent reduction to a mere 35 percent of an individual’s income is just a bridge too far I guess. I mean, how dare anyone keep close to two-thirds of the compensation received for the labor their body performed? I mean, such a demand presupposes the individual owns their own body, and that’s just not how the U.S. federal government views us peasants.

He goes on in similar fashion, crying about every aspect of the tax proposal. For some bizarre reason, he saves his only worthwhile commentary for the very last ‘graph, which fell under the “losers” heading.

“People who want Congress to pass something. While the Trump plan solves some of the policy contradictions of his earlier promises with a ‘candy for everyone’ approach to cutting taxes, that leaves it with even bigger political contradictions. The plan’s tilt toward businesses and the affluent means that Democratic support will be scarce to nonexistent. A law passed via the Senate’s budget reconciliation process — preventing a filibuster by Democrats and allowing a narrow majority of Republicans to prevail — is not permitted to increase the deficit beyond a 10-year window. That means the major provisions would probably have to be temporary. Even if adjusted to be temporary, the presence of deficit hawks among Republicans would make the Trump plan no slam dunk to pass,” Irwin concluded.

And that, as I mentioned above, is the main problem here – a bunch of time and energy is being spent discussing and analyzing a tax reform proposal that is already dead on arrival before congress. The approach Trump is taking is befitting of a person familiar with professional wrestling and reality television – it’s all about the big, sexy splash. It’s easy to get people fired up about the notion of being robbed less, just like it would be easy to get an inmate fired up by telling him his parole hearing is tomorrow. The sane and productive among us would all love to feel a few PSI of boot-heel-pressure come off of our carotid arteries. Sadly though, that’s not likely to happen.

There’s no cutting taxes without slashing government spending. And, the only spending politicians ever even talk about is “discretional spending,” which covers things like funding for the military and Planned Parenthood and only accounts for a paltry 28 percent of the total federal budget. To make any real headway against runaway government spending, congress would have to wade deep into unfriendly waters and start slashing away at people’s so-called “entitlement programs.”

While lefties cry endlessly about America’s gaudy military spending, the real cancers that are killing taxpayers are the leftist darlings Social Security and Medicare / “general healthcare” spending. The Ponzi scheme that is Social Security, along with unemployment and labor-related expenditures accounted for 37 percent of all federal spending for 2016 according to InsideGov-dot-com’s research that they claim is sourced from the Office of Management and Budget within the federal government. That figure is up two percent from the average of most years.

The next-largest tumor that is killing the average, productive American is the aforementioned Medicare and “general health spending,” which in 2016 accounted for 28 percent of all federal outlays. Given that 2016 was the year we reached Peak Obamacare, the 28 percent figure for 2016 is actually double the average of other years.

So, for those keeping score at home, a full 65 percent of all federal expenditures are traditionally off of the negotiation table for congress; there’s no political will to undo these massive boondoggles, so, instead government’s answer has been to allow them to slowly strangle productive Americans to death. And, ever since FDR and then later with LBJ and the “War on Poverty,” the left has been increasingly successful in doing just that.

So, while our professional wrestler politicians entertain us with bombastic words and flashy proposals, bear in mind that nothing they ever propose will ever help anyone. As long as federal spending goes on unrestrained, there cannot ever be tax cuts deep enough to be meaningful.

 

 

 

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