For the past eight years Republicans have carped that the skyrocketing national deficit will leave future generations on the hook for trillions of dollars of debt. Unless Congress gets its budget act together, these “deficit hawks” claimed, our government is destined to collapse under the weight of all those IOUs.
Surely, then, the $2.4 trillion price tag attached to President Trump’s proposed tax plan would evoke similar wailing and gnashing of teeth. Well, you could be forgiven for thinking so, but you’d be wrong. The congressional cult of economic doom and gloom is nowhere to be found, with the GOP in control of the White House, Senate and House. Wyoming’s congressional delegation in particular seems to have forgotten its unyielding opposition to expensive giveaways.
So what’s changed? For one, the letter after the president’s name reads R now, not D. Perhaps more importantly though, the immediate beneficiaries of the Medicaid expansion and education investments we couldn’t possibly afford under President Obama’s leadership would have been working-class Americans. This time around it’s the nation’s wealthiest citizens — a.k.a. campaign donors and the political class — that stand to gain.
“A pro-growth tax plan will move the U.S. economy forward,” said Mike Enzi, Wyoming’s senior senator and chairman of the Senate Budget Committee in a statement.
Back in 2013 — when she was still a Virginian — Representative Liz Cheney wrote in a Wall Street Journal op-ed that Barack Obama was “the most radical man ever to occupy the Oval Office. The national debt, which he is intent on increasing, has passed $16 trillion.” But now comfortable in her D.C. office, with the deficit recently crossing the $20 trillion mark, and a Republican tax reform plan on the table that would add trillions more, she’s magically changed her tune.
“Cutting taxes is crucial to generating economic growth and making sure folks in Wyoming keep more of their hard earned money,” Cheney said in a statement.
In an Oct. 4 speech on the Senate floor, Sen. John Barrasso said the tax cut plan “starts with increasing the amount of money Americans get to keep in their pockets as a result of their hard-earned paycheck dollars. That’s the most important thing.”
“We want to … get the economy growing faster,” he said. “It is a direct benefit for American families. When you cut taxes on small businesses, they can afford to hire more people. Or they can use the extra money to pay their workers more.”
Senator, they could also sock away more money in savings, keep personnel at the current level or reduce their workforce and keep fighting a minimum wage hike tooth-and-nail. In fact if history or economics are any guide, that’s what we can expect.
It sounds nice and simple, but tax cuts of this ilk simply do not stimulate the economy — at least not in ways that benefit the middle-class or lower income earners. We know this because it’s been tried before, twice, and it’s failed both times.
Enzi, Barrasso and Cheney may have conveniently forgotten, but it’s time we all look back at the unhinged “trickle-down” economic theories Ronald Reagan and George W. Bush promulgated. Twice now the nation has bought the same bill of goods that plenty of economists correctly warned would have disastrous results. A third time will not be the charm.
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Bush inherited a thriving economy from Bill Clinton, who raised taxes and left a surplus of more than $86 billion. Bush then cut taxes and ran home to clear more Texas brush. He left the American economy in a shambles for Obama to fix. With virtually no help from congressional Republicans, Obama put our economy back on solid footing with a record-setting 75 consecutive months of job growth.
Here’s how the Trump tax cuts will work in Wyoming, according to a brand new study by the Institute of Taxation and Economic Policy, a nonprofit, nonpartisan research organization that provides in-depth analyses on the effects of federal, state and local tax policies.
- The wealthiest 1 percent of wage earners in the state — those earning more than $542,000 — would get an average tax cut of $180,480 in 2018. This group includes the millionaires and billionaires who call the Cowboy State home because without a personal or corporate income tax we make a great tax haven for the rich. These “one-percenters” would receive 70.7 percent of Wyoming’s total tax cut. ITEP estimates that this elite portion of the population would see their average income go up by 7.3 percent.
- The state’s middle class — the 20 percent that ITEP defines as making from $47,400 to $82,100 a year would get an average tax cut of $490, increasing their 2018 income by an average of 0.8 percent. Let this sink in for a moment. Middle class, you account for one-fifth of the state’s population, but would receive just 3.4 percent of Trump’s tax cuts.
- And what about the “working poor,” whom the Legislature dismissed as too lazy to get a decent job during four years of debate about Medicaid expansion? The lowest 20 percent, who make an average of $15,400 annually, would receive an average tax break of $110 per year. Imagine how many fast-food meals that could buy!
Meanwhile ITEP estimates that 11.9 percent of Wyoming households — many of them loyal Trump fans who were promised the moon — will see their federal taxes increase.
Trump’s tax plan is just a bald faced giveaway to the wealthy, which is no surprise to people who have been paying attention. Members of the middle class waiting to fill their wallets with those big bucks the president promised can scream their heads off all they want. But their representatives won’t scream with them. What they’ll get instead is a large piece of a $2.4 trillion debt. Chew on that, please.
PAY Attention Wyoming Taxpayers, we have been here before. 700 BILLION to foreign investors while ordinary citizens alter their retirement investments and not be allowed state tax deductions. These whales spout relief but how many times do we have to clean up the mess after the bubble bursts.
Isn’t this the beauty of shallow, opinionated, narcissistic, political journalism; both parties get to ignore middle way ethics and economics? While China is trying to grow a middle class system, America seems intent on destroying its own. The “Me” boomer generation has failed miserably. Younger working, thinking men and women, need to replace the old fools of special interest politics and journalism. It ain’t gonna happen overnight, so best get started now.
Thanks for this “tell it like it is” piece about the current proposed tax break, which of course will be balanced by the safety net programs so many folks depend on.