I bring this up not as a diversion away from the many events in Washingon, D.C. today but because of the insane push of the Democrats toward Socialism. Most of the Democrats who have thrown their hat in the ring to run for President in 2020 want between 70 & 90% increases in the tax rate. That alone should cause them to be defeated but it seems that millions are buying the rhetoric and ingesting the diatribe. How that is possible is still beyond me, but we see it every day.
The Democrats, in unison, echo the rant that the Trump Tax Cuts were tax cuts for the Rich or Super Rich and not the middle class or common man. Are they right? They decried the bonuses received by the average working American taxpayer were simply token crumbs, not real benefits. I don’t know about you, but a thousand dollars is not crumbs for me, but then I am not, as are most in Congress, rich.
The rhetoric and spin that the Tax Cuts will explode the deficit and cripple our government is the Democrat staple. Is that correct? If you honestly examine the statistical data and the history of real tax cuts you find something quite the opposite. Tax cuts were understood by Presidents John F. Kennedy and Ronald Reagan as being means to spur the economy and were proven to increase federal revenue not decrease it. That is an inconvenient truth that most Democratic politicians refuse to admit, and their followers mindlessly parrot their words rather than examining the facts.
I saw a report by the Congressional Budget Office (CBO) which revealed that federal income taxes were $76 BILLION higher in the first half of 2018 than they were in 2017. The U.S. Treasury Department has acknowledged that the expectation of an increase in federal revenues will continue to exceed revenue from 2017. Both those reports are interesting and beneficial in examining the Tax Cuts and who they benefit.
I hear many on the Left lament the $1 TRILLION deficit and I join them in decrying any such deficit. However, you cannot lay the entire blame at the feet of President Donald J. Trump, for the programs and entitlements demanded by the Democrats and too many Republicans are to blame. If we forget that the National Debt doubled under Barack Obama, we ignore the truth and forget the impact upon the budgetary process for years to come. However, the Democrats refuse to lay any blame at the feet of former president Obama but seek to place the total blame on Trump. That is dishonest at best and diabolical at worst.
Our massive debt and deficit is not the result of the Tax Cuts but the propensity of Congress to spend and the profligate spending demanded by Congress. Tax Cuts increase federal revenue rather than creating a deficit. On the other hand, Medicare for All or Universal Health Care would increase the debt by about $31 TRILLION over ten years and would annually add over $3 TRILLION to the deficit. How can one argue for Universal Single-Payer Healthcare that carries that kind of price tag and reject Tax Cuts that benefit every American and increases federal revenue? Only if you are blindly following the rhetoric of the Left.
Another consideration is that the increased federal income tax revenue touches only those Americans who pay taxes. Those on the government dole and pay no taxes are not impacted by the Tax Cuts and therefore argue that the Tax Cuts are for the Rich. No, the Rich benefitted less from the Tax Cuts than the Middle-Class and all Working Americans.
If we use the IRS data from 2015, an Obama year, the latest information available from the IRS. The report reveals that the top 1% of wage earners made about 21% of the nation’s income but paid 39% of all federal income taxes. They paid more federal income taxes than the bottom 90% of wage earners who paid approximately 29.4% of the federal income taxes. Isn’t that a bit disproportional? If we take this a step further we find that in 2015, the top 50% of wage earners paid 97.2% of all federal income taxes. The top 1% had a tax rate of 27% and the bottom 50% had an effective tax rate of less than 4%. Isn’t that a bit disproportional?
The Trump Tax Cuts lowered the Corporate Income Tax Rate from 35% to 21%. The Democrats claim that is simply a Tax Cut for the rich and must be reversed. I remind everyone that Corporations do not pay taxes! Corporations are simply legal fictions and do not pay taxes, people do. If a tax is levied on a corporation, it will likely result in the increase in the price of the product, goods or service. It could and probably will result in the layoff of workers and lower dividends to the shareholders. Politicians love ignorance on the part of voters because it allows them to perpetuate their fabrication and engender the hatred for anyone having money.
I’ve heard it illustrated many times using the following analogy. Suppose a politician came to you and said, “I’m not going to tax you but I’m going to tax your land or property.” Who are they taxing? Not the land because land is an inanimate object and pays no taxes. Who pays? The owners of that property or YOU!
This is another reason that I support a Flat or Fair Tax system. Everyone would then have skin in the game. Of course, there would be a threshold below which there would be no taxes but for the most part, everyone would pay a proportional share and have skin in the game. In that system, the Internal Revenue Service would virtually become obsolete rather than being a weapon to use for political purposes. It would still exist but the savings to the American Tax Payer would be enormous. It would reduce the cost of filing your taxes and reduce the paperwork for the IRS. Those two things alone would generate more revenue for the federal government.
If you and I have more money in our pockets we tend to spend more and more spending is beneficial for the economy. That is spending that is not debt-laden or debt generating. If we have more disposable money and spend it EVERYBODY BENEFITS!
God bless you and God bless America!