Trump biographer David Cay Johnston: Radical Republican tax cuts are bankrupting the nation

Trump biographer David Cay Johnston: Radical Republican tax cuts are bankrupting the nation
By Gage Skidmore from Peoria, AZ, United States of America - Mitch McConnell

How would you like to take on $300 more debt every month for as far as the eye can see into the future?


Thanks to Donald “I’m the King of Debt” Trump, our federal government’s debt is rising much faster than under President Barack Obama despite Trump’s frequent assertions that the economy is much better now that he is in the White House. And that $300 per month of added debt you owe via our Uncle Sam is scheduled to grow and grow.

Our federal government’s budget deficit was nearly $739 billion in the first eight months of the current federal budget year, which began Oct. 1.

That’s a 71% increase from when Trump took office in 2017 and a 39% increase from just last year.

All that red ink stands in contrast to the Obama era. For the same period in the 2015 budget year was less than $283 billion. When Trump took office the October through May 2017 deficit was $433 billion, still well below Trump’s performance.

Trump keeps telling us that the tax cuts he signed would boost the economy. So what did the Congressional Research Service find when it studied the effects of the Trump/Radical Republican tax cut law?

Last year the economy “grew at 2.9%, about the Congressional Budget Office’s (CBO’s) projected rate published in 2017 before the tax cut. On the whole, the growth effects tend to show a relatively small (if any) first-year effect on the economy.”

So no boost to economic growth, but a big boost to the wealth of the small minority of Americans who control our major corporations. A fistful of dollars for you, armored cars full of cash for plutocrats.

Taxing Corporations Less Than People

The effective tax rate on corporate profits—the share of profits actually paid in tax—plummeted by half last year, the Congressional Research Service found.

The official tax rate is now 21% of profits. The actual corporate tax rate paid last year? Just 8.8%.

For individuals, the average federal income tax rate was 9.2%. That was down just a fraction of a percentage point from 2017 so nothing like the big tax cuts for corporations.

What this means is that our Congress now taxes we the people at higher rates than it does corporations. We can change that because corporations don’t get to vote—at least not yet. But change requires American adults to register to vote, to learn about the issues and then cast ballots that, hopefully, will all be counted by local officials, not the Russian military cyber warfare hackers that Trump says Vladimir Putin assured him didn’t interfere in our 2016 election.

Fiscal Sin That No One Talks About

During good years our government should run balanced budgets or generate surpluses to pay down past debts, or so traditional economic theory holds, and Congressional tax and spending policies proclaim.

Right now, though, our government is spending more than $3 billion per day more than it collects in taxes, duties and fees, up from $1.3 billion per day under Obama in 2015.

Spending more than our Congress taxes us has been the norm for the last six decades except for the last year under President Dwight D. Eisenhower, the last year under President Lyndon B. Johnson and the entire second term of President Bill Clinton. Notice the black ink years were under a general who could have run for the White House under the banner of either party and two Democrats who the Republicans denounced as free-spending liberals.

You might think all this extra red ink, which is projected to increase through the coming decade, would prompt hearings in Congress.

The number of hearings scheduled on getting us off Congress’s and Trump’s addiction to red ink? None.

Democrats aren’t sounding an alarm, but at least they keep noting that the deficits would be substantially smaller but for the 40% reduction in the corporate income tax rate and the individual tax cuts that were heavily weighted in favor of the millionaire and billionaire class along with owners of commercial real estate, notably the current occupant of the Oval Office.

Republicans speak softly about all this deficit spending or keep quiet lest the upset their leader. Now that the GOP has morphed into the Cult of the Donald, sound tax and spend policies exist in a twilight zone where facts no longer matter.

Among Republican officeholders, deficit spending was once the most abominable of all fiscal sins. Today, as ordered by Paramount Leader Trump, exploding budget deficits are the fiscal sin that dare not speak its name.

Enjoy this piece?

… then let us make a small request. AlterNet’s journalists work tirelessly to counter the traditional corporate media narrative. We’re here seven days a week, 365 days a year. And we’re proud to say that we’ve been bringing you the real, unfiltered news for 20 years—longer than any other progressive news site on the Internet.

It’s through the generosity of our supporters that we’re able to share with you all the underreported news you need to know. Independent journalism is increasingly imperiled; ads alone can’t pay our bills. AlterNet counts on readers like you to support our coverage. Did you enjoy content from David Cay Johnston, Common Dreams, Raw Story and Robert Reich? Opinion from Salon and Jim Hightower? Analysis by The Conversation? Then join the hundreds of readers who have supported AlterNet this year.

Every reader contribution, whatever the amount, makes a tremendous difference. Help ensure AlterNet remains independent long into the future. Support progressive journalism with a one-time contribution to AlterNet, or click here to become a subscriber. Thank you. Click here to donate by check.

Close
alternet logo

Tough Times

Demand honest news. Help support AlterNet and our mission to keep you informed during this crisis.