As I understand it from the Biden tax plan – which I am reviewing at the moment – he wants to raise taxes by $4 trillion dollars. One day it’s on 80+% of us, the next day it’s only on those making over $400K per year – which, by the way, the math doesn’t work to get to that number off that small demographic. But I’ll save that for a later discussion. Let’s talk about tax cuts and impacts.
Little known fact that I have discussed before: When you cut taxes, that money doesn’t get shoved into a mattress. It gets banked. It gets invested. It builds things. It employs people. It drives the economy. That actually has the counter-intuitive impact of increasing government revenues. But that’s not the line being fed to us over and over by the “new” democrat party. It’s instead evil – only benefiting the top 1% (or whatever the line of the day is today). But let’s look at facts – that really started when the “original” democrat party, under Kennedy, cut taxes. It worked as planned…treasury revenues continued to climb. Wait, what?
Fast forward to the 1980s – specifically the Reagan and Bush years. The economy boomed as soon as Reagan adopted the Kennedy approach that was long-abandoned by the democrat party. As many of us recall, Reagan significantly cut taxes. The result: A whopping 76% increase in treasury tax revenues over his 8 years, and even more during the Bush years.
Now let’s look at the last 12 years. During the Obama years, with an economic recovery in play, we had to climb out of the cellar of the banking crisis (recall the Clinton Affordable Housing orders from the 90’s that set that stage), but considering that at the end of Obama’s term the markets were almost back to where they were prior to the collapse, and unemployment was in the 4%-5% range, the treasury still managed to increase revenues by $750B over 8 years.
But here’s where it gets’ interesting: The economy wasn’t growing fast in 2016. We were not able to break free of the unemployment and GDP plateaus that we were told to “get used to” as the new normal. Then the evil one (Trump) showed up and cut taxes at all levels in the largest restructuring in history. Loopholes removed, taxes cut to where at least 48% of Americans now pay ZERO federal taxes – far more people paying ZERO than ever before (but you aren’t fed that tidbit, are you?). So, what’s been the result? Easy: As predicted, the economy went into overdrive, with a shot of nitrous. Unemployment and GDP both went much further into record territories.
*Side note: How can Obama and Biden take credit for Trump’s economic growth, saying “we started it – it was all us,” when just 3 years before we were told that the numbers they got to were the best we could expect and to “get used to it” as the new normal – help me understand that logic??*
Anyway – the evil one, with his evil tax cuts have so damaged the US Treasury that you know what happened? You’ll love this: In only his first 4 year term, with all those tax cuts, the economy has grown so much that 2021 treasury forecasted revenues are $3.86T – which is a $540B increase from when he started all of this.
So – $750B in 8 years, riding a recovery wave that *should* have accelerated growth, versus $540B in 4 years, riding no recovery wave.
And Joe wants to eliminate those economy-fueling tax cuts? Citing Joe’s favorite line: “C’mon, man?”
