Thursday, September 28, 2017

Populists In The US Elected A President To Cut Taxes For Billionaires

The Donald campaigned as a populist who would make life better for lower income citizens.  He would drain the swamp in Washington and punish the elite establishment that has ignored the interests of ordinary Americans.  We have heard that story before and we should not be surprised by The Donald's tax plan.  He has rewarded his base with words about social values that his base loves to hear.  They love to hear how much he shares their social values but his tax plan does nothing for them.  In other words, it is a tax plan developed by the Republican elite that is designed to reward their richest donors.  The plan is not fully fleshed out, but the 400 wealthiest households in America would have their taxes cut by an average of $5.5 million.  Some crumbs will be dispersed to lower income Americans, but the plan was designed to reduce the tax burden of people just like Donald Trump.  Of course, the tax plan is not being sold as a gift to billionaires.  It is being sold as a way to stimulate economic growth and to create jobs.  If you think that you have heard that story before you are correct.  It is a fairy tale that Republicans have been promoting since Ronald Reagan.  Tax cuts for the rich have done little to spur economic growth and create jobs.  Unfortunately, too many Americans are willing to accept nice words from politicians in support of their cultural and social values in return for rewarding the rich with dollars.

The other problem with the tax plan is that federal tax receipts will be substantially reduced.  Republicans who pretend to worry about federal budget deficits when Democrats are in the White House have been silent about increasing federal budget deficits.  If asked, they will repeat the fairy tale about paying for the tax cuts with economic growth, but they hope that the question will not be asked.  They also won't tell you that large budget deficits provide a good argument for cutting programs like Social Security and Medicare.  They also won't tell you that reducing taxes for wealthy Americans redistributes the tax burden to middle class citizens.

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