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Meet The Funders Of The 2016 Campaign Promises

by Lynn B. Johnson (Principles: Power - use it or lose it) - 2 year ago

If Hillary Clinton's tax increases do not pass Congress, or Donald Trump's tax cuts do not raise revenue, who will pay to repair our roads, bridges and tunnels? Hint: It won't be anyone currently eligible to vote.

With Donald Trump’s economic policy speech, we now have an outline of how each party’s nominee would run the largest economy in the world. Interestingly enough, despite the uniqueness of this election, both 2016 economic plans follow classic party dogma – and since neither represents anything new, both are doomed to failure.

Hillary Clinton’s plan has evolved somewhat but as she described in her acceptance speech, it is one Democratic giveaway after another – subsidized early childhood education, free college for lower and middle class students, debt reduction for those who have already graduated, increased spending to cure national health crisis like Alzheimer’s, cancer, and drug addiction, ENHANCED Social Security benefits, and, of course, enough funding to fix our crumbling infrastructure.

Clinton’s approach for paying for all of this is simple and straightforward – increase taxes on the wealthy so that they will pay “their fair share.” On paper it sounds good but Clinton must know that without Democratic control of the house, this plan is dead on arrival. It has been over 25 years since any Republican agreed to increase taxes and it would take an institutional lobotomy for them to say yes to Hillary when they have steadfastly said no to Bill Clinton and Barack Obama. Those tax increases are not going to happen and America’s babies will be handed the bill for Clinton’s economic plan.

On the other side, Donald Trump is applying classic Republican ideas, including the unproven claim that massive tax cuts will generale the trillions of dollars needed to repair our roads, bridges and tunnels.  Classic Republican theory states that decreasing taxes and regulations will stimulate the economy which will in turn, increase tax revenues. The only problem is that this theory hasn’t proven true since Lyndon Johnson reduced the tax rate from a staggering 90% down to a slightly more rational 70%. Every tax cut since has decreased revenues and every tax increase since has raised revenues.Of course, that history won't stop a compliant Republican Congress from once again applyng this discredited theory. 

Regardless of who wins this election, the pressure on them, and Congress, to do something will be enormous. If nothing else, bridges will need to be rebuilt either right after or (hopefully) right before they fall into the rivers. It seems depressingly clear that whatever Congress does will raise the deficit and stick our children with the bill.   

Perhaps, though, this is not as depressingly clear to you. If so, please add your comment and cheer me up. 

Comments and Responses (2)

General Comments
By  Facebook Commenter - 2 year ago
Reagan's slight tax cut on investment did produce record revenues even with a middle class tax cut . This helped turn a horrible economy around, which had double digit unemployment, inflation, and interest rates to buy a house were in the upper teens . So targeted tax cuts such as these have produced great results . Hillary's tax the rich and spend plan has never worked , this kind of thinking only hinders the slows the engine of capitalism. Even if you confiscated all of the wealth of the top 1% it wouldnt run our country for even a year .
Discussion Leader's Response : This comment is relevant to the discussion. (Commenter's rating is increased.)
Discussion Leader's Explanation : It's difficult, if not impossible, to trace economic growth in the 80's to a single tax cut. During his term, Reagan revamped the tax structure completely. When he came into office the maximum income tax rate was 70% and was filled with absurd loopholes like the ones which encouraged people to buy worthless investments - just to save on taxes. Cleaning up this mess is a far more likely reason for the economy turning around than a slight tax cut on investments. By setting the minimum rate at 28%, however, Reagan overshot the mark and the result was huge deficits. I do agree with you, however, that Clinton overestimates the income that can be generated by increasing taxes on the wealthy. Both sides need to stop using counter-intuitive economic theories and apply common sense. If we are to balance the budget, we must increase taxes and decrease spending. It's really that simple.
Reasoning used for ARGUMENTS presented
By  Dan T - 2 year ago
In general, American voters have shown themselves to be concerned about deficits (e.g. the tea party revolt of 2010), both from the standpoint of long-term fiscal burdens and immediate economic and financial market impacts related to interest payments and interest rates. Democrats have thus bought into the rhetorical construct that spending must be paid for, and the deficit has declined substantially under Obama. The real culprit is the Republican fiction that tax cuts pay for themselves and do not increase the deficit. If not for this myth, the American electorate would not have tolerated the budget-busting Bush tax cuts or the absurd tax plans of subsequent republican candidates.
Discussion Leader's Response : This comment is relevant to the discussion. (Commenter's rating is increased.)
Discussion Leader's Explanation : I agree that the Republican tax cuts are the cause of the large increases in the "published" deficit. One has to ignore the obvious to see how deficits have risen after the Reagan and Bush 43 tax cuts and declined after the Clinton and Obama tax increases. However, Democrats must take a primary share of the blame for the continuously increasing "real" deficit which takes into account the unfunded benefits promised by Social Security, Medicare and other "entitlements." Rather than deal with this very real problem, they have preferred to score political points whenever Republicans have suggested that cuts in these benefits are necessary. Many of the people who will be paying off that debt, have yet to be born.