The Republican Tax Plan will Balloon the Deficit

I think we all know what’s really in the Republican tax plan that President Trump talked about today.   It gets rid of the tax deduction for state and local taxes.  This most hurts people in blue states with higher tax rates and the Republicans know that.  There is also a “childless” penalty.  Because people with kids can offset the higher expenses in this tax plan with an increased deduction.  However the earned income tax credit is gone.  Trump didn’t mention this today.  This whole scheme is a synical plan to punish liberals who tend also to be poor and reward rich Republicans with a lot of kids.  Also there is a repatriotation of overseas funds for business who have been evading taxes to bring their money back to America with no repercussions.  But Norman Goldman states that all of these provisions aren’t even written up in a bill yet, so maybe we don’t have as much to fear as we think.  This tax plan will balloon the federal deficit. 

President Trump chose to give a major speech on tax reform carried only on radio.  It was kind of a wish list of tax favors.  He claims he gives the middle class and poor breaks that he won’t give the upper classes.  He’s increasing the child deduction but eliminating the earned income tax credit.  Of course that’s one thing he neglected to tell us.  He’s doing away with a minimum income tax on the very rich.   And of course he’s doing away with the dreaded estate tax.  By the applause he got there must have been a lot of very rich people in the crowd.  I don’t know how much of this was already known.  Perhaps everything in the speech was already known but the President implied that what he was saying was something new.  It won’t spur the economy.  The economy is on the verge of topping out and it will top out regardless of whether this tax bill is passed or not.  

That Alabama judge who was kicked off the court twice for being unconstitutional was elected last night for the republican nomination for US Senate.  That Bannon guy supported him.  He thinks God ought to be invoked in all of our laws and says the God is the foundation for all moral goodness.  This judge also believes that homosexual ought to be made illegal again.  The thing is he was elected judge by popular vote even after being forced to resign once.  And now the people of Alabama are still so beyond the pale right wing that this guy will be elected.  There have been four special elections for political office since Trump has been in office and the Republicans have won all four. 

This economy is going good now but it isn’t going to keep up forever.  It’s almost unheard of to have ten years of uninterrupted growth.  This time in 2007 we were seeing early signs of the oncoming recession.  This one was the real estate bubble and the one before that in 2000 was the Dot Com bubble.  I don’t know of any equivelant bubbles occurring this time.  But it’s foolhardy to think that this cut in corporate taxes and repatriation of overseas corporate funds is going to pump up this economy to new unexplored heights.  More likely somehow, somewhere, cracks are going to form in this economy and the whole thing is going to collapse.  It might occur as late as 2020 and in that case President Trump may choose not to run again.  He’s getting pretty old anyhow.  And so the next democrat will have a total economic mess on his hands, and of course this will be just the way the Republicans planned it.