2. Politicians promised they care about our nation’s debt. They don’t.
Since this bill cuts taxes without corresponding cuts in government spending, estimates are that it will add up to $1.5 trillion to our $20 trillion national debt over the next 10 years.
In theory, when corporations pay less taxes, they have more resources available to become more profitable, hire more employees and pay those employees more. As companies and workers make more, they pay more in taxes. Those promoting the bill insist this anticipated increase in tax revenue will offset the cost of the law, making it revenue neutral.
From U.S. Treasury Secretary Steven Mnuchin on Sept. 13:
It will be revenue neutral under our growth assumptions. We can pay for these tax cuts with economic growth.
To back up his words, in mid-December, Mnuchin’s Treasury Department produced a one-page “analysis” suggesting the tax plan would create enough new revenue to offset its cost.
Unfortunately, the bill’s supporters seem to be the only ones sharing this rosy outlook. Of 38 economists surveyed by the University of Chicago, 37 said the tax plan wouldn’t create enough new revenue to offset the cost, swelling our nation’s debt. The 38th said later that he had misread the question.
The nonpartisan Joint Committee on Taxation examined the tax bill passed by the Senate and found that only $400 billion of the $1.5 trillion cost would be recouped over 10 years, blowing a $1 trillion hole in the deficit.
You don’t have to go back very far to find Congress humming a much different deficit tune. In 2009, in the depths of the Great Recession, President Barack Obama pitched a $787 million stimulus bill to help the economy recover by funding such things as infrastructure projects. The legislation passed, but Senate Minority Leader Mitch McConnell and nearly every other Senate Republican voted against it.
Yesterday the Senate cast one of the most expensive votes in history. Americans are wondering how we’re going to pay for all this.
Ironically, he also said this back in 2009:
Someone mentioned the other day, one of my colleagues, just to put a trillion dollars in context. If you started spending the day Jesus was born and you spent a million dollars every single day you still wouldn’t have spent a trillion dollars. It’s a lot of money.
Now that both corporate profits and cash are at record levels, the same people who fought against deficit spending to combat the Great Recession are now fighting to use it to slash corporate taxes.
Lesson: Politicians hate legislation that adds to deficits, unless they’re the ones proposing it.