The Republican presidential candidates have been releasing tax plans and they have been analyzed by the nonpartisan Tax Foundation. It turns out that most of these plans lose revenue over a ten-year period even on a so-called dynamic scoring basis where the stimulatory effects of the plan are taken into effect. Such callous disregard for the huge annual deficits we are now running, and our huge accumulated national debt, is totally unacceptable especially from the political party which bills itself as being fiscally responsible.
The left-leaning New York Times points this out yesterday in its lead editorial, “Why the Republican Tax Plans Won’t Work.” According to the NYT:
- Tax Revenues will need to increase by 40% over the next 10 years just to keep federal spending even with inflation and population growth.
- Further additional revenues will be needed to pay for health care for the elderly, transportation systems, climate change and likely increased interest payments on the national debt.
- Thus taxes will have to go up and can only be imposed realistically on the wealthy who have had the biggest income gains in recent years.
- Democratic presidential candidates do propose tax cuts but only for low- and middle-income Americans.
- Democrats are calling for new taxes on financial transactions.
- Democrats also propose to raise wages, support higher minimum wages, support unions and expand profit-sharing and employee ownership.
This is the program the Democrats will be pushing if they win the presidency next year. It has some attractive features but the likely overall outcome will be increased deficit spending, a rapidly increasing debt and a continued stagnant economy.
Meaningful tax and regulatory reform will both be needed to get the economy growing faster than the 2% average of the past six years. Any credible tax reform program simply must be at least revenue neutral so that, combined with spending restraint, it will put our national debt on a downward path.