Wednesday, September 9, 2015

JEB! promises to grow the economy at 4% using the same tired Republican proposals.

The promises JEB! has made with his latest tax proposals amount to a great big hill of beans that means nothing. In the first place, lowering taxes to increase economic prosperity has been tried before, by Reagan, George Bush Sr., & George Bush Jr. Each time the result was the same. Reduced taxes led to reduced revenues which led to reinstating the taxes that had been cut. George W. Bush's taxes have not been entirely repealed, but the result of the initial tax reduction is painfully obvious to all: years of trillion dollar deficits in the federal budget.

JEB! clearly has some new ideas. He figures that he can push 15 million people who currently pay taxes into the non-taxpayer category. That means that more people should be willing to vote Republican, perhaps enough of them to make him the President.

JEB! thinks he can also cut the deduction that lets hedge fund managers treat their incomes as capital gains. But wait a minute. How is he going to get that one through the all-Republican congress?  which has sworn never to raise taxes, ANY taxes? Answer: He cannot. So add $6 billion annually to the amount that will have to be cut from other programs to pay the hedge fund managers, or $60 billion over the next ten years.

There's another big hole dug in the treasury by JEB!'s budget. It's a switch from taxing multinational companies for their world-wide income to taxing them only for their income in the US. As you might imagine, the big corporations are all in favor of this change. But economists estimate it will cost the US Treasury $13 billion a year in lost taxes, or $130 billion over the next 10 years.

Another tax reduction JEB! proposes is to cap all deductions at 2% of a tax filers income. This proposal also runs afoul of the Republican promise not to raise taxes because, for those guys, fewer deductions means higher taxes and thus a tax increase.

This whole tax plan is a lie, like most Republican plans. Even if all the provisions were passed, the government would still lose $1.2 trillion over 10 years. That means the Republican Congress will be looking to cut $150 billion from the federal budget every year--under a best case scenario. Under a more reasonable scenario, where the economy grows at 2% instead of the 4% JEB! is praying for, the government would lose $3.4 trillion over 10 years, or $340 billion a year. Add to this the cost of failing to raise taxes on hedge fund managers ($60 billion) and the underestimate of the cost of territorial corporate taxation ($130 billion), and the total amount the Republicans will have to cut from the federal budget every year will be...$360 billion.

That $360 billion will be coming out of our social security, Medicare, and Affordable Health Care payments. If you like the idea of getting less for medical care and social security, by all means vote for JEB! and the Republicans. If you think the wealthy and the corporate elite already have a big enough slice of the national pie, vote for the Democrats. Then, at least, you will have a chance to stop losing ground to the wealthy!

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