More Taxes Needed Now. Trump’s 2017 Precipitous Tax Cut Failed! Our National Debt Booms And Needs To Be Curbed.

By Donald A. Collins | 19 June 2024
Church and State

(Credit: YouTube / screengrab)

The two articles I highlight in this OP ED both point in the same direction. Let’s begin with the June 18, 2024 Washington Post piece entitled National debt will exceed $50 trillion by 2034, budget watchdog estimates. The Congressional Budget Office says this year’s federal deficit will hit $1.9 trillion, as defense and social safety net costs rise.”

The bad news begins,

As lawmakers grapple with increasing defense demands and spending on social safety net programs, the Congressional Budget Office projected Tuesday that the federal debt will equal 122 percent of the United States’ annual economic output by 2034, far surpassing the high set in the aftermath of World War II.

The deficit will swell to $1.9 trillion this fiscal year and keep growing until the overall national debt hits $50.7 trillion a decade from now, Congress’s nonpartisan bookkeeper said in its latest report. The group revised its forecast from four months ago, when it projected that the debt would reach $48.3 trillion in 2034, and 116 percent of economic output.

The new figures add to the urgency facing policymakers in 2025 — and on the campaign trail — to tackle the nation’s financial health. Next year, vast portions of the tax code are set to expire, potentially forcing a steep tax hike on individuals and families. Congress suspended the debt limit in 2023, but that, too, will expire next year, setting up a showdown between the two parties over federal spending.

And Medicare and Social Security are running low on funds, which could force a benefit cut for tens of millions of Americans just as the national debt crescendos.

The debt is a bipartisan problem: Spending shot up under both President Biden and former president Donald Trump. And Trump’s 2017 tax cuts, the ones that are set to expire next year, added nearly $2 trillion to the existing debt, according to a nonpartisan estimate. Trump has proposed extending all of those cuts, which could add trillions more to the debt, and Biden also wants to keep the lower rates for people who earn less than $400,000, as well as new social spending paid for by allowing some of the tax cuts to expire.

Read the full Post article here.

The obvious question is which party will begin to attempt to control this surge and the answer is likely NEITHER!

Rich Republicans are fighting Biden’s attempt to raise the corporate tax rate to 28 percent from 21 which Trump got passed and put in effect on January 1, 2018.

That cut which was touted by the GOP to make us more competitive internationally and create more jobs didn’t trickle down to most non-rich Americans and further feathered the wealth gap to a record level.

Wikipedia tells us the depth of the wealth inequality story:

According to an analysis of Survey of Consumer Finances data from 2019 by the People’s Policy Project, 79% of the country’s wealth is owned by millionaires and billionaires.

Also in 2019, PolitiFact reported that three people (less than the 400 reported in 2011) had more wealth than the bottom half of all Americans.

During the COVID-19 pandemic, the wealth held by billionaires in the U.S. increased by 70%. According to the 2022 World Inequality Report, “2020 marked the steepest increase in global billionaires’ share of wealth on record.”

As of late 2022, according to Snopes, 735 billionaires collectively possessed more wealth than the bottom half of U.S. households ($4.5 trillion and $4.1 trillion respectively). The top 1% held a total of $43.45 trillion.

Read the entire history here.

Trump’s term then added $8 trillion to the national debt and of course now the GOP is crying about paying 28 percent in corporate taxes.

The fight over the corporate tax rate is well defined by the 6/17/24 article entitled “Corporate Tax Rate Spurs Political Fight With More Than $1 Trillion at Stake”.

Biden wants to raise current 21% rate to 28% while Republicans consider further cuts which I quote from here.

The 21% U.S. corporate tax rate is the biggest single variable in the sprawling 2025 tax debate, and the two parties are trying to turn that dial in opposite directions with major consequences for companies’ profits and federal revenue.

The rate could climb as high as 28% if Democrats sweep November’s elections and move as low as 15% if Republicans gain full power.

President Biden’s plan for a 28% rate would reverse half of Republicans’ 2017 rate cut, pushing the U.S. corporate rate back near the highest among major economies. A 15% rate—some Republicans are heading that way, but the party hasn’t settled on a plan—would match the lowest level since 1935, boosting profits and rewarding shareholders. Presumptive Republican presidential nominee Donald Trump told corporate executives last week that he wanted a 20% rate.

Each percentage point is worth more than $130 billion over a decade in tax revenue, creating a $1 trillion-plus gap between the poles of the parties’ positions and giving the largest U.S. companies an outsize interest in the election’s outcome.”

Let’s understand that the US economy is doing better than any other in the world and corporate earnings are at historic highs!

Within the Democratic Party, raising the corporate tax is among the easiest political choices, because it generates so much money for other priorities. It lets Democrats direct attention to companies that enjoyed lower taxes and then raised prices; they have pointed to studies showing that the 2017 law yielded modest boosts in investment and delivered wage gains mostly to higher-income workers.

Democrats also point to U.S. corporate tax revenue as a share of the economy as being low internationally; that is misleading because, unlike elsewhere, the U.S. taxes a significant share of U.S. business income on owners’ individual returns, not through the corporate tax. “The corporate tax share is already low and corporate profits are at record highs,” said Lael Brainard, the White House national economic adviser. “Any way you look at it, we are not raising enough from the corporate side.” “

However, the GOP and its corporate allies, while carping about our burgeoning national debt, up from $6 trillion at the end of the Clinton administration January 1, 2001 to at least $34 trillion, apparently are unwilling to trim the debt while pleased for example to oppose benefits to cutting our next generations’ educational loan debt or almost any Biden initiative to help poorer Americans.

You can read the entire article here.

In his ranting speeches Trump, now in complete control of the GOP, has stated his intentions of what he will do if reelected. He had made clear his only criterion for his support is total willingness to be like the toady Mike Pence— that was until Pence’s refusal to not count the ballots of the Electoral College which made Biden President.

Mr. Rubin who authored such a balanced article above also reminds the GOP in his May 28th Wall Street Journal article entitled “Republicans’ $4 Trillion Question: Should They Pay for Extending Trump Tax Cuts? Lawmakers begin weighing fiscal impact of extending tax reductions that expire after 2025”.

The choices seem obvious. Cut expenses or endanger our fiscal survival. But don’t lower taxes which are now too low. He begins,

Republicans want to extend the Trump-era tax cuts that lapse after 2025. A big point of debate now: Should they cover any or all of the $4 trillion cost—and how?

The question pits the party’s fervent belief in the economic power of tax cuts against many GOP lawmakers’ oft-repeated concerns about federal debt and budget deficits. Many Republicans argue that tax-cut extensions are so important for strong growth that they don’t need to be fully paid for. Some are exploring ways to trim the net cost of a tax-cut extension, such as repealing electric-vehicle tax breaks or reducing federal spending.

Republican lawmakers and aides say they have made no decisions, and the ultimate call will depend on whether they have congressional majorities next year—and by how many seats. The internal party discussions are starting now, as senior Republicans plan for the possibility of holding the House and retaking the Senate and White House in November’s elections. Doing so would let Republicans control the tax cuts’ fate next year.

Extending all expiring individual and estate tax cuts, along with business-tax changes Republicans favor, would reduce projected revenue by $4 trillion over a decade, according to the congressional Joint Committee on Taxation. That would come atop $20 trillion in new deficits projected under current laws.

Read Rubin’s wisdom here in full.

The history of US House’s abysmal governing since it gained its majority has been perhaps the worst record in history. Counting, however, on either party to find a way out of our debt crisis and still meet our essential priorities at home and abroad seems particularly uncertain. Coming together remains the goal and Trump’s election means chaos.

The first step toward finding solutions to all our many problems requires us not to return Trump to the Oval Office.

From the New Republic:

This week, Dr. Anthony Fauci’s new book comes out, and it contains a disturbing chapter about Donald Trump’s ignorance, explosive rage, and megalomania during the coronavirus pandemic. We think this should be covered as a loud, clanging alarm bell about the dangers of a second Trump term. So we talked to New York Times columnist Paul Krugman, who has written a series of recent columns on voter amnesia about Trump’s 2020 performance, about the horrors unleashed on the country by his unfitness for the presidency—and why recent events suggest he’s gotten much, much worse.

If elected Trump won’t need a cooperative VP to refuse to count the Electoral College’s votes. If Biden wins again Trump’s next phase of fervent activity will be to try to stay out of jail.

Former US Navy officer, banker and venture capitalist, Donald A. Collins, a free lance writer living in Washington, DC, has spent over 50 years working for women’s reproductive health as a board member and/or officer of numerous family planning organizations including Planned Parenthood Federation of America, Guttmacher Institute, Family Health International and Ipas. Yale under graduate, NYU MBA. He is the author of “From the Dissident Left: A Collection of Essays 2004-2013”, “Trump Becoming Macbeth: Will our democracy survive?”, “We Humans Overwhelm Our Earth: 11 or 2 Billion by 2100?”, “What Can Be Done Now to Save Habitable Life on Planet Earth?”, “Vote”, “Can Homo Sapiens Survive?”, “Will Choice and Democracy Win?”, “Can Our U.S. Survive 8 Plus Billion of Us”, “Economic Growth: A Cancer on all Earthly Life”, “On the Precipice of Political Disaster in 2024” and “Democracy at Red State Risk”.

The $6T Gap Between Trump’s and Biden’s Tax Plans | WSJ

Trump tariff proposal would make life ‘unaffordable’ for Americans: Janet Yellen

Trump proposes tax cuts for corporations while meeting with top CEOs

Robert De Niro’s Warning For Voters On Trump | The View

Be sure to ‘like’ us on Facebook

LEAVE A REPLY

Please enter your comment!
Please enter your name here