(C) Daily Kos This story was originally published by Daily Kos and is unaltered. . . . . . . . . . . It's the tax cuts, stupid [1] ['This Content Is Not Subject To Review Daily Kos Staff Prior To Publication.', 'Backgroundurl Avatar_Large', 'Nickname', 'Joined', 'Created_At', 'Story Count', 'N_Stories', 'Comment Count', 'N_Comments', 'Popular Tags'] Date: 2023-04-28 Look at the graph up top. The debt is mostly the result of Republican tax cuts since Reagan. The graph is very clear (here’s the original image from advisorperspectives.com): After Reagan and the (anti)Republicans halved the top marginal tax rate from 73% to 28% in 1981, the national debt skyrocketed. And look at 2001. The very same thing happened when George W. Bush and the (anti)Republicans lowered the top tax rates just a bit (and cut corporate tax rates quite a bit more). (Though the line going vertical in 2008 is when all the “smart” money of Wall Street and the City of London got themselves — and all the rest of us — into a pickle we now call the Global Financial Crisis, and our political leaders “decided” that it was better to plunge the entire system into debt, than actually challenge the political power of the banksters and bring them to justice. Which, unfortunately, allows conservatives, libertarians, and (anti)Republicans to pretend that, oh, noooo, it’s not the tax cuts that caused the deficits and piled up the debt, it was that big, bad Global Financial Crisis. Which is what the poster at advisorperspectives.com does. And they use the COVID crisis beginning in 2020 as a similar excuse to cover up the effects of the Trump tax cuts. ) A month ago, the Center for American Progress posted Tax Cuts Are Primarily Responsible for the Increasing Debt Ratio, which includes a graph which very helpfully breaks out the effects of the Brush tax cuts, and the Trump tax cuts, from the debt incurred managing the Global Financial Crisis, then COVID. (The graph is about 2/3 of the way down in the online article). One trend that conservatives, libertarians, and (anti)Republicans very studiously ignore is that their tax cuts failed to deliver on their promise that economic growth would accelerate. This boost in economic activity, they promised, would also result in a boost in tax collections. The Heritage Foundation — the conservative public policy think tank that has had enormous influence in the (anti)Republican Party in both Congress and the White House — published a report in April 2001 projecting that the economic boom about to be unleashed by Bush’s 2001 tax cuts would completely eliminate the national debt by fiscal year 2010. But the promise that tax cuts would pay for themselves is a lie. What actually happened was a massive misallocation of capital away from productive economic investments, resulting in stagnation of real economic activity. As government was shoved "out of the way" by defunding it, shutting agencies, and cutting regulations, the entire economy began to shift from actual productive functions of wealth creation, to functions of speculation, usury, and arbitrage. The results include a massive shortfall in promised and expected tax revenues. As the Center for American Progress article explains: Of particular interest is that projected levels of both revenues and noninterest spending have decreased: Both are projected to be lower than in the CBO’s projections issued before the permanent extension of the Bush tax cuts. This decrease in noninterest spending is the equivalent of more than $4.5 trillion in lower spending over a decade. But the drop in revenue was three-and-a-half times as large, the equivalent of more than $16 trillion in lower revenues over a decade. Despite the rhetoric of runaway spending, projections of long-term primary spending have decreased, but projections of long-term revenues have decreased vastly more. The United States does not have a high-spending problem; it has a low-tax problem. The latest sign that there are key people in Biden’s administration who realize conservative, libertarian, and (anti)Republican economic policies have brought great harm, not growth, is National Security Advisor Jake Sullivan’s speech at the Brookings Institution yesterday: When President Biden came into office more than two years ago, the country faced, from our perspective, four fundamental challenges. First, America’s industrial base had been hollowed out. The vision of public investment that had energized the American project in the postwar years—and indeed for much of our history—had faded. It had given way to a set of ideas that championed tax cutting and deregulation, privatization over public action, and trade liberalization as an end in itself. There was one assumption at the heart of all of this policy: that markets always allocate capital productively and efficiently…. Here, the prevailing assumption was that trade-enabled growth would be inclusive growth—that the gains of trade would end up getting broadly shared within nations. But the fact is that those gains failed to reach a lot of working people. The American middle class lost ground while the wealthy did better than ever. And American manufacturing communities were hollowed out while cutting-edge industries moved to metropolitan areas. Now, the drivers of economic inequality—as many of you know even better than I—are complex, and they include structural challenges like the digital revolution. But key among these drivers are decades of trickle-down economic policies—policies like regressive tax cuts, deep cuts to public investment, unchecked corporate concentration, and active measures to undermine the labor movement that initially built the American middle class. Efforts to take a different approach during the Obama Administration—including efforts to pass policies to address climate change, invest in infrastructure, expand the social safety net, and protect workers’ rights to organize—were stymied by Republican opposition. Note that Sullivan mentions the problem of “regressive tax cuts” but he does not focus on it. He spent most of his time discussing the failure of trade policies over the past half century, and the need to defend and strengthen a “fair” world trade system. Sullivan’s avoidance of a deep consideration of “regressive tax cuts” indicates the problem, that we, as activist Democrats must solve — and the political dynamic we must change. Tax increases are simply a political minefield most Democratic Party leaders don’t want to walk into, even though there is landslide popular support for raising taxes on the rich, especially billionaires. So long as the right wing noise machine continues to be “richly” funded, most Democratic politicians are going to avoid talking about the need to raise taxes. We need to change that. We need to be telling everyone that the deficits and the debt are mostly the result of Republican tax cuts, and that the clear history is that tax cuts do not pay themselves, but gives more money to those who are least willing to use it in economically productive ways. Why is there over $32 trillion hiding in offshore hot money centers, while we debate whether to make work requirements for the poor’s medical treatment even more onerous? We need to move society to the point that every time a reporter and journalist interviews a Republican politician on the issues of the budget, the deficit, and the national debt, the first questions that come out are: “What about all those tax cuts that caused the deficit in the first place? Why aren’t you talking about raising taxes?” [END] --- [1] Url: https://www.dailykos.com/stories/2023/4/28/2166412/-It-s-the-tax-cuts-stupid Published and (C) by Daily Kos Content appears here under this condition or license: Site content may be used for any purpose without permission unless otherwise specified. via Magical.Fish Gopher News Feeds: gopher://magical.fish/1/feeds/news/dailykos/