Get Ready for the Trump Boom
President Trump’s “massive tax cuts” move closer to reality.
The U.S. House of Representatives kick-started President Trump’s ambitious $1.5 trillion tax cut plan yesterday as it approved the proposed budgetary blueprint for the federal fiscal year that began almost four weeks ago.
“Big news — Budget just passed,” the president tweeted at 11:05 Thursday morning.
Now Republicans can get to work on personal and corporate tax cuts without worrying about Democrat obstructionism. Their goal is to get a bill to the president’s desk next month, giving Trump and congressional Republicans their first major legislative win this year after their humiliating failure to repeal Obamacare.
The Trump administration is eager to shift the economy into high gear and isn’t shy about blaming the Obama administration for the nation’s current economic woes.
The previous administration’s economic policies resulted in a near doubling of the national debt from $10.6 trillion in 2009 to nearly $20 trillion in 2016. … This run-up in debt over the last eight years brought it to a level that we have not seen since shortly after World War II.
Obamanomics was a cruel joke, according to the Trump White House.
While our national debt has soared, our economic growth has been historically abysmal. Stagnant economic growth has severely weakened our Nation’s capacity to pay off the debt in the future, especially as measured against historic norms. Overall growth of the economy was subpar even before the last recession and recovery from that recession has been weak. From World War II to 2007, the average fourth quarter-over-fourth quarter growth rate was 3.5 percent. Over the last nine years, average growth has been 1.3 percent.
Many details of tax reform have yet to be worked out. For example, House Ways and Means Committee Chairman Kevin Brady (R-Texas) wants to curb tax-free deposits in 401(k) retirement accounts to boost federal revenues, but Trump is squarely against the idea.
Tax reform is moving forward after House members narrowly approved on a vote of 216 to 212 the $4.094 trillion budget outline President Trump proposed for the U.S. government for fiscal 2018, which began Oct. 1. The initial $4.094 trillion request is down from the $4.147 trillion President Obama initially requested for fiscal 2017. The measure approved by the House on Thursday was identical to the version that squeaked through the Senate Oct. 19 on a vote of 51 to 49.
After losing the House vote, Democrats spewed the same old hateful class-warfare rhetoric and fear-mongering.
Economically illiterate Rep. Brad Sherman (D-Calif.) raged against “a tax bill that’s going to cost millions of jobs.”
“These tax cuts will not create an economic boom, but will instead lead to a higher concentration of wealth among the rich, while dramatically increasing deficits and debt,” whined Rep. John Yarmuth (D-Ky.).
Twenty GOP lawmakers broke with leadership to vote against the budget resolution, largely over concerns about Trump’s plan to eliminate the deductibility of state and local tax payments. Lawmakers in high-tax states like New York and New Jersey are upset that state and local taxes would cease to be deductible at the federal level if the Trump proposal passes intact.
Others were concerned the budget does little or nothing to reduce annual deficits and the ballooning $20.4 trillion national debt.
“I am voting NO,” Rep. Frank LoBiondo (R-N.J.) tweeted Wednesday night, before fulfilling that promise the next day. The lawmaker was answering a constituent who asked him to oppose the budget and “a tax plan that favors the wealthy.”
The budget in its present form envisions $5 trillion in hypothetical spending cuts over the decade, including cuts to Medicare, Medicaid, and Obamacare. Republicans reportedly don’t intend to enforce that spending discipline by offering implementing legislation.
And all claims of spending cuts in the nation’s capital need to be taken with a grain of salt because Congress uses bizarre accounting principles. So-called cuts are generally reductions in the rate of increase in spending. Official Washington operates in the make-believe world of “baseline budgeting,” according to which both a cut and an increase may count as cuts. This is because baseline budgeting assumes automatic future spending increases, which in itself puts upward pressure on spending.
In other tax-related news, the widely hated John Koskinen will finally be leaving his post as IRS Commissioner, though he won’t be fired by President Trump as many conservatives had hoped.
Koskinen’s term of office will lapse at the end of next month at which point David Kautter, who was confirmed in August as assistant secretary for tax policy at the Department of the Treasury, will become acting IRS Commissioner. Secretary of the Treasury Steven Mnuchin said Kautter “has had an illustrious 40-year career in tax policy, and I am confident that the IRS and the American people will benefit from his experience and insight.”
Koskinen angered lawmakers and conservatives across the nation when he said that the IRS had nothing to apologize for when emails from IRS targeting scandal ringleader Lois Lerner went missing. While thumbing his nose at Republicans, he apparently presided over the illegal destruction of IRS files and computer hard drives.
Jason Pye, a vice president at Freedom Works, said Koskinen covered up illegal activity at the IRS. “We’re glad to see him go,” Pye said. “He did not earn his salary or his big pension.”