Tax Plans and Talk of Budgets

It is fairly easy to research the details of the various tax plans (although, as far as I know, the Democrats don’t have one or need one right now as things stand). The facts of a tax plan are always a bit slippery of course, because they keep changing until the moment a final plan is passed.

But after you have the facts it is often a matter of conjecture to figure out what a tax plan will mean for the American economy. Experts look at past practice and make predictions about the future. When Congress wants to make fairly drastic changes to the federal budget and change the tax structures at the same time, predicting economic effects becomes far more problematic.

There is the matter of whether cutting taxes on the wealthy helps the economy or not. Republicans collect “facts” to prove that it has helped our economy in the past. Democrats collect “facts which show no statistically significant effects from “trickle-down” because “trickle-down” never actually happens.

Then there is the matter of cutting the corporate tax rate. Republicans say that corporations will come back to America. And if they can’t get the plants back they can make it more attractive for corporations to keep their profits in the US. Democrats say that the factories/corporations may return but they are likely to use higher levels of technology and robotics and will not need as many workers. Republicans bet on rebooting the peak times of the Industrial Age in America. This is why people say Republicans look backwards (they are reactionary), while Democrats look ahead (they are progressive).

I assume if there are both tax cuts and tax reforms the budget will have to take some hits. I suspect that our safety net benefits will be targets since that is what the GOP has been wanting for almost a decade. Trump has a budget plan and Paul Ryan has been ready with a budget plan, probably since those “kegger” college days. Trump’s budget plan is relatively brief- not at all a line-item budget. The House plan has 454 pages and gives us plenty of numbers, and cruel cuts, and lots of charts and graphs to justify the meanness. I will look at budget next.

However weak Trump is as a President, however focused on his own ego and his own needs, he is managing to fulfill some of the fondest dreams of the Koch brothers and the Conservatives in the GOP.

He has appointed exactly the right people to his cabinet to hollow out government agencies and produce that limited federal government conservatives have long desired. Look at any agency you choose – Education where Betsy DeVos is hard at work downsizing federal involvement in education. Look at the State Department and our embassies around the world where empty offices are turning the whole business of diplomacy into some other mission altogether – a mission only comprehended by Rex Tillerson (maybe). We have Pruitt in the EPA overturning environmental protections and eventually making his department unnecessary. Every department is shrinking, thus shrinking government. What may not shrink is the White House. Trump may have to build himself a palace like the one those Saudis have.

Shrinking departments, shrinking involvement out in the world, will certainly help shrink the budget and perhaps it will shrink enough to save our safety net, but at the terrible cost of isolating ourselves from everyone and destroying the diversity which brings new genes and new cultural threads that would help us avoid stagnation. Obviously using ideology to design tax plans and budgets can have some profound effects on America and not all of them will be economic, or positive.

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