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Why Are We Even Discussing Tax Cuts?

by David Teitelbaum (Principles: It all begins with Respect. ) - 3 month ago

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Republicans are searching frantically for a reason to justify massive tax cuts. But alas, in 2017, tax cuts are a solution in search of a problem. Congress should do something useful instead.

American troops are involved in wars in Iraq, Syria and Afghanistan. They are also on high alert in a last ditch attempt to discourage North Korea from continuing to threaten America and its allies. The administration has deemed that we need to increase our annual military budget by over $50 billion a year.

Our economy is growing at a steady rate in excess of 2% per year. Unemployment for those actively seeking work has fallen below 4.5%, a 40 year low.

Many of the people not seeking work are unable to work because of drug addiction. Pumping up the economy will not get these people back to work. What will help is government expenditures to help cure them of their addiction.

Hurricanes have devastated parts of Texas and Florida, and all of Puerto Rico and the Virgin Islands. The price tag to help these areas recover is in the hundreds of billions of dollars and the hurricane season is far from over.

Everyone from President Trump to the liberal Democrats in Congress agree that we need a $1 trillion overhaul to our national infrastructure.

Our national debt is now over $20 trillion, with approximately $700 billion having been added in the year ending September 30, 2017. 

All of the above are wonderful reasons for why the last thing that Congress should be talking about right now is tax cuts. To put it simply, cutting taxes will increase the annual deficit while further starving the government of funds needed to pay for our military, the opioid crisis, infrastructure, and hurricane relief.

It would not even be correct to state that the American people voted for tax cuts when we elected a Republican president and congress in 2016. The Republicans campaigned for “Tax Reform” which is a completely different animal from tax cuts. Tax Reform could address key problems in our country such as:

- A tax code that is so complicated it is nearly impossible to enforce

- A tax structure that has helped dramatically increased income inequality since the last time tax reform was passed in 1986

- Corporate taxes which provide Incentives for companies to relocate out of the United States

- Insufficient funds being received to pay for Social Security and Medicare

The tax “Framework” released by the administration last week addresses the corporate issue but ignores everything else. In particular, it COMPLICATES rather than simplifies the tax code in order to accomdate aggressive tax cuts. 

Perhaps the best example of this is the proposal that taxes paid on profits from small businesses be capped at 25%. This would be a massive tax cut for business owners who previously paid close to 40%.  The Framework goes on to say that Congress will need to pass rules to prevent small business owners, like Donald Trump, from abusing this lower tax rate. Those rules alone could run hundreds of pages and empower a whole new accounting and legal specialty of how to get income classified as small business profits.

This is the definition of a tax cut which adds new complications to the tax code. It is the exact opposite of what you would want from tax “Reform” and leaves us with the obvious question:

With so many important issues facing our country, why are we even discussing tax cuts?   

Comments and Responses (1)

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By  Cool Calvin - 3 month ago
You're paying too much attention to the document and you're not listening to what Trump's men are saying. They say that once the plan becomes law, I will be sending in my taxes on a post card. Unless you're one of those "super rich" people, you will be too. Now that's what I call simplification. But it's not just tax simplification - it's life simplification. The President's plan will mean that I can make decisions based on what's best for me and my family - not on what's going to save me taxes. Democrats have kept on making the taxes more complicated because they say it will help people. Well, it hasn't worked out that way and it's time to try something new. Lots of folks in this country are hurtin and giving them a chance is why we elected President Trump.
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