Author Topic: Extending Last Year's Tax Cuts Without Massive Spending Reductions Would Be a Fiscal Disaster  (Read 160 times)

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Online EasyAce

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New CBO analysis shows debt could exceed 200 percent (!!!) of GDP by mid-century without changes.
By Eric Boehm

Republicans in Congress are reportedly mulling a proposal to make permanent the tax cuts passed last year, with some members of the House GOP pushing for the passage of what's been called "Tax Reform 2.0" as soon as next month.

Currently, the lower individual and corporate income tax rates established by the Tax Cuts and Jobs Act of 2017 would expire in 2025. Extending them, according to a newly released analysis from the Congressional Budget Office (CBO) would cause the already terrifying trajectory of America's national debt to spike even higher over the coming decades—potentially doubling the size of the entire economy before 2050.

Under this so-called alternative fiscal scenario, current spending plans would remain unaltered but future tax revenues would be reduced by the permanent extension of the tax cuts. With the gap between revenue and spending already on pace to hit $1 trillion annually within a few years, it's not hard to see how reducing future tax revenue—without a commitment to seriously curb spending—could cause the debt to skyrocket . . .

. . . [T]he real problem is Congress' inability to cut spending. After passing the tax cuts last year, Republicans earlier this year approved a two-year spending plan that obliterated Obama-era spending caps once championed by Ryan and other budget hawks. In doing so, the GOP has signaled quite clearly that it does not give a damn about the deficit—despite years of claiming otherwise as Presidents Bush and Obama added to the national debt. And if Republicans don't care about the deficit, why should Democrats?

But even a party that has abandoned fiscal conservatism should take a good, long look at the CBO's latest release before pressing ahead with a plan to put more tax cuts on the national credit card.
Wise up, Republican'ts. Find the goddam stones to start real spending cuts (and not just the old trick of reducing the rate of spending increases and saying you're cutting spending), or a) watch the tax cuts' actual value erode (as they already began to do with the price hikes provoked by you-know-whom's trade war); and, b) watch tax and spending issues get answered on Damnocratic terms. Again.

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