Trump’s Tax Cuts are Driving Us Off a Cliff

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July 1, 2018

Sensationalism? Demagoguery? Click Bait?  Perhaps, but perhaps not.

This week, President Trump has been taking a victory lap, celebrating six months since his tax cut/reform/scam was passed; justifying the past ten years of Republican nocturnal emissions.  Pronouncing that this has, in turn, “unleashed an economic miracle.”

“At last, our country finally has a tax system that is pro-jobs, pro-worker, pro-family and pro-America,”

Donald Trump

Has this tax plan really met the benchmark of an “economic miracle”, or is it more like a ticking economic time-bomb which will detonate years from now so Trump and his financial acolytes can deny any responsibility and most blame what ever president is left holding the bag?  My money is on the latter, because so far the Tax Cuts and Jobs Act of 2017 has been a complete disaster.

That won’t stop Trump and his team street-hawkers from continuing his gaslighting of America.  So let’s look as some of the past and present claims being made and see if they hold up to even a casual scrutiny.

One of the the most immediately obvious changes that the average tax payer will see is the filing form itself.  Pitched as a “post-card sized” form, it is smaller.  It is a two-sided form which will replace the 1040, 1040A, and the 1040 EZ. It is supposed to be simplified, and it will be to many, however they did not actually reduce much information from the original; they simply moved things such as student-loan interest deductions and capital gains, to separate schedules.  Many, if not most taxpayers will still need to complete those separately which, if anything, makes it even more confusing.

post card tax form  <—-Not the actual tax form

“It won’t take long for America to realize this postcard isn’t simple — it’s simply complicated. Just like the rest of Trump’s tax law the middle class is not going to fall for this con.”

Ron Wyden (D-Ore.), ranking member of the Senate Finance Committee

Well, what about the stock market?  Surely everyone remembers the “shot in the arm” that was promised, did it deliver? 

Well yes, but it was incredibly short lived.  Take the always-overly-relied-on DJIA, during the run-up and for a short period after words, the Dow was rallied as if there was no tomorrow, breaking record highs on a near-daily basis;  until the last week of January when began its drop into correction territory, where it has remained ever since. In fact, as of this writing, the Dow is lower than the day the tax bill was signed into law.  The Dow, in fact, is currently in the longest correction since the crash of 2008 and within days of being the longest since 1984.

dow 630

Surely, though…there must have been a positive affect on the sovereign debt, because this was a nearly exclusively Republican tax bill, they would never allow a new law which would increase the debt or deficit would they? 

Oh, that is adorable how you would think that was a relevant consideration while the president is of the same party.  Silly boy, that only matters when a Democrat is in the White House! If there is a Republican president, the GOP controlled congress seemed downright giddy to pass the bill which, at current estimates, will add $1.9 trillion to the deficit.

You only need to read the Congressional Budget Office’s report regarding the debt situation, that the debt will reach 100% of the GDP by 2028.  That little tidbit of nonpartisan data didn’t stop Larry Kudlow, director of Trump’s National Economic Council and as well as frequent Fox News contributor, from saying the exact opposite of the truth.

In fact the projected 2018 deficit is $808 billion, which is an increased a full $219 billion from 2016’s $585 billion.

Okay, okay…but millions have seen increase in paychecks, and then there are these bonuses we keep hearing about, right?

Well, yes.  According to the president himself 6 million workers have seen real increases in their paychecks and bonuses.

Substantial, right?  Well, when you consider that that there are 129 million adults who are working full-time, that means a whopping 4.6% of the working population.  Even less if you count part-timers, contractors, and free-lancers.  There is no context to his remarks either, are these 6 million including those who make six or seven-figure incomes, the ones who benefit the most, yet actually need it the least?

So, how is this going to kill us all?

Because at some point, the reality of the fiscal suicide note that they call tax reform will set in.  The books will need to be brought back in balance, and where do you think they are going to look?  Well, not at revenue because that would mean a tax increase.  The voters won’t stand for that, and their donors won’t allow higher corporate taxes.  The only other way to balance the books is through austerity measures; in other word, reducing spending.

The GOP has been eyeing so-called entitlement programs, even before the tax cuts were drafted.  What they call entitlement, the average Joe calls the social safety-net, discretionary spending and earned benefits: Medicare, Medicaid, Social Security, CHIP, housing assistance, SNAP, farm subsidies, infrastructure upgrades.  These are programs which keep crime down, keep the elderly out of poverty, keep our family farm solvent, and keep our roads and utilities in good repair.  If the financial house of cards collapses, which seems to be an inevitability, we are all in danger.

Imagine healthcare costs skyrocketing more than they already are, to offset the emergency care that is legally and ethically required to be provided to poor families and indigent adults, which is currently subsidized by the government.  The already inadequate Social Security pension and disability funds shrinking to an amount which is negligible to nothing.  Our roads crumbling to where you cannot drive to work, and ambulances cannot respond to emergencies.  Bridges collapsing, power grids failing.  It sounds apocalyptic, but each of these are foreseeable outcomes that have been seen in other countries who enact extreme austerity measures.

The GOP has been careless and nearsighted in their tax scam, for benefits that few will actually realize and many more will pay for, now and far into the future.

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