Standard News

Hide Advertisement
  • Business
  • Culture
  • News
  • Technology
  • Trending
Site logo
ADVERTISEMENT
ADVERTISEMENT

Massive Tax Cuts Won’t Reduce Massive Debt

By Jason Owen 3 min read
Advertisement - Continue reading below
Source: Wikimedia Commons

WASHINGTON, April 26, 2017 /PRNewswire-USNewswire/ — The Concord Coalition expressed concern with President Trump’s new tax plan today, saying the administration has not shown how it could be financed without substantially increasing the federal debt.

“While the proposal lacks specificity, what was released today looks like a revenue loss plan more than a tax reform plan,” said Robert L. Bixby, Concord’s executive director. “It is inconceivable that a tax cut of this magnitude could pay for itself through economic growth.”

Advertisement

He added: “While the administration suggests it will eliminate most tax deductions — a positive goal — that would likely not be enough to offset the tax cuts Trump is proposing. The net result would be higher debt and thus a limit on any economic growth gains the administration hopes to get from tax reform in the first place.”

Tax deductions, preferences and exclusions — often called “tax expenditures” — make the tax system more inefficient, complex and regressive. Limiting or eliminating them is an essential step in creating a pro-growth tax reform.

Yet this plan also exempts at least three of the largest tax expenditures — the deductions for home mortgage interest and charitable contributions, plus tax-preferred retirement savings incentives. That, combined with the proposed increase in the standard deduction (which is already claimed by 70 percent of income-tax filers), would severely limit any potential revenue gains.

The administration has yet to present a full budget plan for the coming fiscal year and beyond. Instead, Trump released a partial spending plan in March that just covered appropriations for one year. The administration has promised to release additional information later.

“Tax reform is a worthy goal,” Bixby said. “There is a rare bipartisan consensus that the tax code is too complicated and economically inefficient. Fixing that problem, however, cannot be considered in isolation from the fact that current fiscal policy is already on an unsustainable path. The tax code, whether reformed or not, needs to bring in sufficient revenue to keep that problem from getting worse. It makes no sense to pursue major tax changes without knowing what the overall spending plan is, and given the huge potential revenue loss from the president’s proposals, it would certainly not be the fiscally responsible thing to do.”

As Congress and the administration continue to work out the details of their tax plans, it will be essential that their budget and economic estimates follow recent bipartisan convention and be based on standard economic models and theory. Only by doing so can they and the American people understand the impact of the proposed tax policies.

Furthermore, policymakers should not rely on budget gimmicks to make their plans look better or to get around congressional rules and procedures. Particular attention needs to be paid to how the tax plans handle overseas business-income repatriation. This often scores as a revenue-raiser within the 10-year budget window but loses revenue after that.

The Concord Coalition is a nonpartisan, grassroots organization dedicated to fiscal responsibility. Since 1992, Concord has worked to educate the public about the causes and consequences of the federal deficit and debt, and to develop realistic solutions for sustainable budgets. For more fiscal news and analysis, visit concordcoalition.org and follow us on Twitter: @ConcordC

 

SOURCE The Concord Coalition

Advertisement - Continue reading below

Bill to cloak U.S. ‘dark money’ seen as harmful to charity fraud fight
News
Reuters 4 min read

Bill to cloak U.S. ‘dark money’ seen as harmful to charity fraud fight

Which ‘La Raza’? Trump comments cause confusion over group’s role
News
Reuters 3 min read

Which ‘La Raza’? Trump comments cause confusion over group’s role

You Won’t Believe the Creepy Backstory Behind This Haunted Hotel in Arizona
Trending
David Clarke 3 min read

You Won’t Believe the Creepy Backstory Behind This Haunted Hotel in Arizona

Seattle judge hears challenge to Uber, Lyft union law
News
Reuters 2 min read

Seattle judge hears challenge to Uber, Lyft union law

Mental exam ordered for accused serial killer of San Diego homeless
News
Reuters 2 min read

Mental exam ordered for accused serial killer of San Diego homeless

Puerto Rico authorizes debt payment suspension; Obama signs rescue bill
News
Reuters 3 min read

Puerto Rico authorizes debt payment suspension; Obama signs rescue bill

AARP Applauds Introduction of RAISE Family Caregivers Act
News
Jason Owen 2 min read

AARP Applauds Introduction of RAISE Family Caregivers Act

Below is a compilation of reportedly haunted locations in Southern Illinois:

1
Entertainment
Ethan Blake 5 min read

Below is a compilation of reportedly haunted locations in Southern Illinois: 1

Apple Corps is sued over Beatles’ 1965 Shea Stadium film rights
Entertainment
Reuters 2 min read

Apple Corps is sued over Beatles’ 1965 Shea Stadium film rights

From Bhangarh Fort to Shimla’s Tunnel No
Entertainment
Ethan Blake 8 min read

From Bhangarh Fort to Shimla’s Tunnel No

load more Loading posts...

sidebar

ADVERTISEMENT
ADVERTISEMENT

sidebar-alt

  • About Us
  • Imprint
  • Contact Us
  • Terms of Service
  • Privacy Policy
  • For Advertisers