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Ethics & Religion
May 25, 2017
Column #1,865
Trump's Budget - A Disaster
By Mike McManus

 

The proposed Federal budget is very much like the President - packed with unbelievable lies. Four examples:

First, the proposed budget would end the estate tax, which is paid only on estates worth more than $5.45 million. However, ending that tax would add $300 billion to the deficit over a decade. Yet the Trump budget counts $300 billion in revenue from the estate tax over 10 years. Either Trump lied in saying the estate tax was ending or he is lying in saying the deficit will not grow by $300 billion!

Second, Trump says he will have a balanced budget with no federal deficit in 10 years - a commendable goal. However the federal deficit for 2017 is $603 billion, and is projected to be $500 billion a year initially, rising to $1.7 trillion by 2027 if Trump tax cuts and spending increases are approved.

A balanced budget in a decade is a HUGE lie.

Trump proposes spending increases that total $717 billion over a decade, such as a $469 billion hike in military spending; a $200 billion investment in infrastructure; and one I favor, a $19 billion paid parental leave program.

He also proposes doubling the standard deduction for individuals, essentially eliminating taxes on $24,000 of a couple's earnings. Millions would no longer pay federal income taxes.

Individual tax brackets would shrink from seven to three - 10%, 25% and 35%, further easing the tax burden on most Americans who now pay up to 39.6%. In another boon for wealthier taxpayers, it would repeal the 3.8% tax on investment income imposed by Obamacare - a tax most people never heard of.

In addition, Trump proposes cutting the corporate tax rate from 35% (which is one of the highest in the world) - to only 15%. Corporations would also not have to pay taxes on their foreign profits. They would also enjoy a special, one-time opportunity to bring home perhaps a trillion dollars that they are "parking" overseas - at a very low rate.

The Tax Policy Center estimated that the corporate tax cuts and the elimination of alternative minimum tax would cost $2.4 trillion over a decade.

However, Steven Mnuchin, the Secretary of the Treasury, said he was confident the Administration's tax proposal would "pay for itself" through economic growth. He asserted it would spur the economy to grow at 3% annually - up from the current 2%. "The economic plan under Trump will grow the economy and will create massive amounts of revenues, trillions of dollars in additional revenues," Mnuchin declared.

That's the third big lie.

Maya MacGuineas, president of the nonpartisan Committee for a Responsible Federal Budget, wrote in a New York Times column this week that the 3% growth rate is "a full percentage point above what the Congressional Budget Office forecasts. With baby boomers leaving the work force, demographics are destiny, and there is no reliable plan to increase growth that much.

She added, "Furthermore, these numbers come before what the White House has promised to be `one of the biggest tax cuts in American history,' which is conspicuously missing from the budget altogether. Indeed, the budget seems to assume tax cuts will increase revenues."

There's a fourth lie - tax cuts that are bragged about, but not counted in the budget!

The Administration is also proposing massive cuts in certain types of federal spending that would reduce the deficit. First, he would "repeal and replace" Obamacare, saving $1.25 trillion over a decade. The House bill that accomplishes that goal will force 23 million people to lose health insurance, according to an estimate by the Congressional Budget Office this week.

It would also weaken Obamacare's protection for people with pre-existing conditions, while providing large tax cuts for the upper 1%. The Administration also proposes $610 billion in additional Medicaid cuts, for a total savings of $1.85 trillion in health care.

Trump's budget would also devastate the poor. It would cut the Food Stamp program by $193 billion over a decade - more than a 25% cut. One part of that would shift the cost to states of $116 billion. Large cuts in housing vouchers would eliminate them for 250,000 poor families. The Low Income Home Energy Assistance Program which helps millions pay heating bills - would be eliminated.

The State Department would have to cut 29% of its budget, and the Environmental Protection Agency would suffer a 31% slash. Social Security's disability program would be cut $48 billion.

Hopefully, the Republican House and Senate will expose most of these lies and toss mean-spirited proposals out the window. If they don't, taxpayers will replace them with Democrats in 2018.
 

____________________________________
Copyright (c) 2017 Michael J. McManus, President of Marriage Savers and a syndicated columnist. For previous columns go to  www.ethicsandreligion.org. Hit Search for any topic.

 

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