The Road to 25 Trillion

The Road to $25 Trillion: An Analysis of GOP’s new Tax Plan

Two weeks ago the GOP unveiled a bill that they fittingly called “The Tax Cuts and Jobs Act.” It enacts sweeping tax reform for both corporations and individuals, with its supporters promising to revitalize the economy by cutting taxes on the American people. (Since I am focusing solely on the income tax facet of this bill, my opinion on corporate tax cuts will have to wait for another day. However I will address the estate tax as well.). The bill promises to simplify how the average U.S. citizen files their taxes, simplify the tax brackets, and lower taxes on the middle class. It’s main goals are perfectly summed up by a statement of the bill’s sponsor, Rep. Kevin Brady from Texas, in a speech introducing the bill. As he puts it: “This is a complete redesign of the code, so we can simplify it so much that 9 out of 10 Americans can file using a postcard-style system, lowering the rates, protecting more of the first dollars you earn,” (cnbc). This statement was followed up the very same day by Donald Trump who said that “it was going to make life very simple” for the average taxpayer (cnbc). Upon hearing these grandiose claims from both the bill’s sponsor and the president, one might be inclined to sigh in relief. According to a Gallup poll conducted in April of last year, about 57% of Americans believe their income taxes are too high. (Gallup) Furthermore,  according to a poll reported pew research center, 61% of Americans believe that the rich aren’t paying their fair share of taxes.

Before looking at who exactly the proposed bill benefits, let’s look at how the “The Tax Cuts and Jobs Act” will impact the economy. Many independent firms and experts have examined the plan to figure out just that. The results have not been encouraging to say the least. According to marketwatch.com, the new plan estimated to cost the “federal government $2.4 trillion in its first 10 years, and give the biggest tax cuts to Americans with the highest incomes” (marketwatch). As of this moment, usdebtclock.org estimates the U.S, national debt at just under 20.5 trillion dollars (usdebtclock.org). The GOP’s tax plan will push America’s deficit to the the brink of 23 trillion by the end of 2027, not accounting for additional expenses incurred by the government. The amount of tax revenue lost would be staggering, as an analysis by the Committee for a Responsible Federal Budget found that the Trump Tax plan could cost between “$3 to $7 trillion over a decade” (crfb.org). This plan, much akin to the tax cuts enacted by former President Bush in the early 2000’s, has the makings of bringing on the next great recession, and the worst part? The tax cuts will mostly only benefit those who don’t need them.

The Tax Cut and Jobs act primary promises is to reduce taxes on average Americans and allow for them to spend more of their hard-earned money thereby improving the economy. It’s the tagline that the GOP keeps using, and its false. It isn’t a matter of political opinion, even basic analysis as shown by the the business insider graph below reveals that the main beneficiaries of this plan will be wealthy Americans, and more specifically, filthy rich Americans.

Another fun little clause introduced by the GOP is the elimination of the estate tax. Known to most as the death tax, the GOP tax plan is set to enact a repeal of the estate tax after six years of being enacted. IF you don’t know, the estate tax only affects individuals worth over 5.49 million. For me, this addition to the bill completely sums up the Tax Cuts and Jobs Act. Mr. Trump, and this is true, has mentioned repealing this “death tax” in many of his campaign rallies, promising to repeal it to thunderous applause. Every single person that applauds for him at his rallies will not benefit one bit from this, and Mr, Trump still uses it as one of his primary catchphrases. It perfectly sums up the bill, a lie to the American people, fraught with corruption and only interested in benefiting the super wealthy. If this all of this isn’t enough evidence of how deceitful and toxic the Tax Cuts and Jobs act is for the economy, consider this. Mr, Trump himself, is estimated to enjoy tax cuts of 1.1 billion dollars through this bill. And the average American taxpayer? more than half will end up paying more in the long run