No, the GOP Tax Cuts Are Not Increasing the Deficit
Not surprisingly, yet another Democrat claim about tax revenue proves to be false.
You can easily tell the difference between a conservative and a leftist by their answer to this question: Does the federal government have a spending problem or a revenue problem? Conservatives, who understand the laws of economics and respect the power of financial freedom, will answer with “spending.” Leftists, who always assume that any money you make belongs to the government and you only get to keep a portion of it, will always insist that the government is short of money.
Hyper-leftists, who have successfully taken over the Democrat Party, are always looking for the rich to pay more in taxes. The term they like to use is “fair share.” When pressed on what that so-called fair share looks like, though, they’ll never give a straight answer. It is meant to be a nebulous number, a moving target that can be adjusted at will to fit whatever socialist scheme they are looking to fund at the moment. Free college, free health care, living wages, free homes, etc.
That being the case, leftists naturally hate tax cuts. Democrats used to campaign on the promise of tax cuts for the middle class, but they rarely do that anymore. Tax cuts in any form mean less government revenue — or so they want you to believe. Economist Arthur Laffer proved decades ago that under the current over-taxation system, tax increases eventually lead to lower tax revenue, and the best way to raise federal revenue is actually to lower tax rates. Instead, leftists always express their desire to raise taxes on the rich to “ease the burden” on the middle class. This is hogwash. Democrats want middle class taxes to remain high, but with the rich seemingly paying an even bigger share, it appears as if the middle class is getting a break.
We saw this at work throughout the previous administration. Taxes were high, with calls to raise them even higher for upper-income earners. Meanwhile, federal spending went through the roof. Trillion-dollar deficits became the norm, and the annual fleecing that upper-income taxpayers and corporations endured didn’t have any effect. Federal revenues shrank and overspending doubled the national debt in eight years. Laffer’s theory was proven correct, and the federal government’s spending problem was apparent for all to see.
Then along came the Republican tax cuts. Sorely needed to jumpstart the economy, these across-the-board cuts were the bane of the Left. Not one single Democrat in Congress voted for the cuts, because they were politically invested in the claim that lower taxes would unfairly benefit the rich, and that the cuts would cost the government money and add to the deficit. This sudden concern for fiscal responsibility after eight years of record-breaking deficits under Barack Obama was politically convenient and publicly laughable.
After the tax cuts proved to be a success, leftists pivoted and tried to tell Americans that they actually did not receive a tax cut. And when people’s income-tax refunds shrank slightly, they started to believe it. No one wanted to reflect on how much more they were taking home in each paycheck over the course of the year, which often meant a lower refund at the end of the year. And a large portion of the population seems to believe that they are entitled to a tax refund every year thanks to the slick advertising campaigns of H&R Block, TurboTax, and other corporatized tax preparers.
Sad to say, Democrats and their media friends did a great job in convincing a lot of Americans that they did not benefit from the tax cut. Now, they’re blaming the continued high deficits on the Trump tax cuts as well. The claim is that the tax cuts have led to less government revenue and, thus, higher deficits.
This is not true. Revenue is actually greater now than before the tax cuts went into effect. The federal government collected over $2 trillion in the first seven months of this fiscal year, which started October 1. This is an increase of close to 2% from the same time in fiscal 2018, and 6% higher than the revenue collected from fiscal 2017, before the Trump tax cuts went into effect. The Treasury Department estimates that fiscal 2019 will bring in $3.4 trillion in tax revenue, 3% more than last year.
So why are deficits still climbing?
Perhaps it has something to do with the fact that spending is up $181 billion compared to this time last year, outpacing revenue by $146 billion. And the extra $100 billion in revenue that Treasury is predicting this year won’t come close to covering the additional $400 billion in spending.
Democrats are lying through their teeth about the impact of the Trump tax cuts, but Republicans are also to blame when it comes to spending. Neither party has proven to be trustworthy with the purse strings of Congress. Trump’s proposal to work with the Democrats on a $2 trillion infrastructure program isn’t doing anyone any favors, either.
Thanks to Trump and the Republicans in Congress, we have a saner tax policy than we have had in years. But the federal government will also need a sane spending policy if it’s going to mean anything in the long term.