What's a presidential front-runner to do when the rest of the field is gasping for air/attention/money/relevance?
If you're Donald Trump, your various advisors are busy thinking about what other tax to cut should your guy win in 2024.
Which would be a passable general election strategy, except for the particulars of what's under discussion and the unavoidable fact that the federal government is drowning in debt.
More on that in a bit. First, The Washington Post reports on what taxes might be cut in a second Trump term:
Trump and his advisers have discussed deeper cuts to both individual and corporate tax rates that would build on his controversial 2017 tax law, which they see as a major accomplishment worth expanding, according to interviews with a half-dozen people close to the former president, some of whom spoke on the condition of anonymity to describe private conversations.
The corporate tax cut is interesting in that the first blush proposal would drop the rate to 15 percent and, possibly, eliminate a series of complex deductions and credits. Tax cuts coupled with tax simplification are good starts.
But then there's the idea about how to help pay for such cuts:
The cuts could be paid for, at least in theory, with a new 10 percent tariff on all imports to the United States that Trump has called for, which could raise hundreds of billions in revenue. The sharp new tax cuts would help offset higher consumer costs caused by the tariffs.
In other words, it would take money from your left pocket and put a bit of it into your right (with government taking a cut along the way).
As ridiculous as that sounds, it's only slightly less ridiculous than the tariff rebate idea Trump has proposed:
…Trump may propose using that revenue to send a dividend payment to U.S. consumers, similar to how the state of Alaska cuts a check every year to its residents from its oil revenue, according to Newt Gingrich, who served as GOP speaker of the House and remains an outside adviser to the former president. Gingrich stressed that there are “many options” for how to use the revenue.
The first and best option is not to raise this revenue in the first place. Tariffs are taxes. Individuals pay them directly through higher prices, indirectly through fewer choices and over the longer term through lost economic growth.
But back to the whole idea of ladling tax cuts over a budget that's already dripping with red ink. As Dan Mitchell writes, the political class as a whole has turned a blind eye to the main drivers of federal spending, entitlement programs like Social Security and Medicare. Neither Joe Biden nor Donald Trump wants to touch the system, preferring to tell voters that their benefits are safe and sound.
Mitchell tells it like it really is:
Simply stated, the United States will not be able to issue endless amounts of government debt.
As a result, this means that the nation will have to close the huge, long-run gap between spending and revenue by making an unavoidable choice between massive tax increases and genuine entitlement reform.
Because of their opposition to entitlement reform, politicians such as Joe Biden and Donald Trump prefer giant tax increases. And because there are not enough rich people to finance big government, the Biden-Trump tax increases will target lower-income and middle-class households.
That's the real tax issue on the ballot in 2024. Which major party frontrunner will sock the middle class with an eye-watering tax hike to keep those entitlement programs afloat for a little while longer.
The opinions expressed in this article are those of the author and do not necessarily reflect the positions of American Liberty News.
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Easy peasy, tax cuts GOOD, gubmint spending is usually wasteful. We can spend our money better than schmuck shoomer or the current dork in chief…..
Not “controversial” at all; he’s perfectly correct.
Too bad the consultants don’t bring up the correct correction path: defund and get rid of most of the Federal government, especiallay those that are unconstitutional. That would certainly help with the need for tax money. Then, there needs to be a constitutional amendment to limit how much the feds can spend every year. Several proposals for this latter have been written, so just choose the one that will fix the problem(s) rapidly.
The problem is the financial structure – they try to make it sound like cutting some programs won’t effect others because the $$ is not allocated there. A dirty accounting trick that stops an easy fix to a runaway budget problem. They need to stop trying to make everything independent of the total budget.
Norman, I think you may have missed an option. The one I think is most likely considering the forces at work. INFLATION! They wouldn’t be the first country to ‘solve’ their national debt problems by making the debt relatively smaller through rampant inflation. Of course, the impact on its citizens is catastrophic. But since when has our increasingly corrupt federal government acted in the best interests of its citizens?
The toughest job Trump has is to make it possible for American corporations/businesses to sell their products for less here – Tariffs now favor foreign nations so much American businesses find it difficult to compete. Last time in office Trump tried to rebalance the tarriff with China to favor America. Car mfgr.’s were going to move back home and give $500 sign on bonuses, etc. All was going well until Biden butted in. We still need to Put America First !
Since working citizens have paid into Social Security their entire working lives, yes, they are entitled to get their money back. If they had been able to keep those wages in the first place and invest them as they saw fit, they would probably be getting a much larger check each month. Instead, our “well meaning, caring, oh, so wise” (/s) government overseers have squandered our money instead of investing it wisely and have robbed Peter to pay Paul so that, now, the funds are running low and we who have reached the age when we should be enjoying the fruits of our labors, are barely squeaking by each month on the pittance that some government bureaucrats think we deserve and should be happy to get. Ditto with Medicare.
Instead of threatening to do away with our earned entitlements of Social Security and Medicare, how about cleaning up the welfare system. Stop giving away the tax money that working people pay to those who are capable of working but just don’t want to work. Stop rewarding people for their bad habits and bad behavior. Quit incentivising illegal immigration. Send all the illegals who have broken our immigration laws by coming into the U.S. uninvited and unannounced back home to fix their own broken countries. We are drowning in debt, in drugs and in dysfunction. We can’t fix the rest of the world when we can’t even fix our own country.
Since half of the country pays little or no income tax (or even receives a check instead of paying taxes), I would support an increase in taxes on these people. Not a massive increase, but something, because everyone must have some skin in the game.
The complex tax schemes are how we got to this point. People who don’t pay taxes are always happy to vote for the candidate who promises to give them more, more, more – as long as someone else pays for it.