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Progressive Politics in Minnesota, the Nation, and the World

Tax Cuts = Debt

Category: Taxes
Posted: 10/04/17 12:17

by Dave Mindeman

Once again we need to dispel this myth that tax cuts automatically lead to economic growth of gigantic proportions.

It doesn't. It hasn't. There is only one time...60 years ago...when this claim could be justified. And that was during the Kennedy administration when they did away with those 90% tax brackets, that really did limit growth.

But tax rates, for the most part, have been under 40% for the wealthy since Ronald Reagan. And the continuous GOP mantra about endless tax cutting has only resulted in debt ever since.

Wealthy Americans have plenty of money for investment if they wish to. They have a lower capital gains rate to help them invest. But any further tax cutting does NOT result in growth, especially if those tax cuts are given to high income earners. It leads to saving that additional money - money which is taken out of the economy.

If our leaders would leave the rates for the wealthy alone - and concentrated on tax reductions for everybody else - then you may have a quality argument. Lower wage earners will utilize and spend the savings they could attain. That may have a beneficial effect on the economy.

But with so much national debt - with continued deficits in the budget - and with so many obligations because of natural disasters - how could any fiscally responsible person even think of further tax cuts?

The caveat is that we do not have any fiscally responsible persons in leadership positions.

We only have bought and paid for, Congressional lackeys.
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