DawgTalkers.net Forums DawgTalk Palus Politicus GOP Tax Architect says Tax Cuts may not pay for themselves as Deficit Grows

GOP leader concedes tax cuts may not pay for themselves as 2019 deficit grows


By Heather Long June 11
Rep. Kevin Brady (R-Tex.), a lead architect of the GOP tax bill, suggested Tuesday the tax cuts may not fully pay for themselves, contradicting a promise Republicans made repeatedly while pushing the law in late 2017.

Pressed about what portion of the tax cuts were fully paid for, Brady said it was “hard to know."

“We will know in year 8, 9 or 10 what revenues it brought in to the government over time. So it’s way too early to tell,” said Brady at the Peterson Foundation’s annual Fiscal Summit in Washington D.C.

The federal government’s deficit typically shrinks during strong economic times, but the deficit is up nearly 40 percent so far this fiscal year, according to the latest Congressional Budget Office report released Friday.

[Trump vowed to eliminate the debt in 8 years. He’s on track to leave it at least 50 percent higher.]


Spending is up $255 billion for the first eight months of the fiscal year, the CBO said, while revenues are up only $49 billion. Corporate tax receipts are down after Republicans enacted the largest reduction in business taxes in U.S. history. Individual income taxes are basically flat this year (they are growing less than the rate of inflation). Most of the revenue increase is coming from President Trump’s tariffs and more payroll taxes, which were not cut in the tax bill.

“Revenue fell, it didn’t rise, after the tax cuts,” said Marc Goldwein, senior policy director for the Committee for a Responsible Federal Budget.

Brady’s comments are a marked departure from the claim many Republicans made during the tax bill debate that the tax cuts would be fully paid for by additional economic growth that would, in turn, spur additional tax revenues for government coffers.


Numerous independent analyses concluded that the tax bill would add substantially to the U.S. debt, which currently stands at $22 trillion. CBO estimated the total cost of the Tax Cuts and Jobs Act is $1.9 trillion — after taking into account additional growth and interest payments.

[Have tax cuts ever paid for themselves?]

“Anybody who tells you the fact the tax cuts are going to pay for themselves. It’s not true. It’s nonsense. You can use the full words of B.S.,” said House Speaker Nancy Pelosi (D-Calif). in an appearance at the Fiscal Summit shortly after Brady.

But Brady said it was important to consider whether the tax cuts were a good investment. He argued there are “very encouraging” signs that the economy is performing better after the tax cuts with strong job growth, improved wage growth and higher business investment.


“I don’t think anything could have been worse for the deficit than to stick with the old economy and stick with the tax code that was so outdated,” said Brady, who pointed to higher payroll tax collection as a sign more people are working now.

The economy expanded at a rate of 2.9 percent last year, up from 2.2 in 2017 and 1.6 in 2016, according to the Commerce Department. The White House predicts 3 percent growth for years to come, but nearly all independent economists expect growth to be closer to 2 percent for much of the next decade.

Republicans say the federal government has a spending problem and needs to scale back while many Democrats want to see higher taxes, especially on wealthier households.

The GOP-controlled Senate, the Democrat-controlled House and the White House are currently in the midst of tough negotiations on the 2020 budget plan that is supposed to take effect on Oct. 1. If no agreement is reached, automatic caps will take effect that reduce both domestic and military spending by a total of $125 billion, a scenario few want in the run up to an election year.


House Budget Chair John Yarmuth (D-Ky.) said the negotiations are “not going very well” so far.

“I don’t think there would be any problem at all getting Senate and House agreement on funding levels,” said Yarmuth, but he called the White House “unpredictable.”

The expectation is that Congress and the White House will eventually agree to lift spending even higher than it is now for both military and domestic programs. Yarmuth’s proposal would raise spending by about the same amount as the GOP tax cuts for the next decade, according to the Committee for a Responsible Federal Budget.

“There is no center of gravity to reduce spending in this town,” said Mick Mulvaney, Trump’s acting chief of staff at the Fiscal Summit.

Mulvaney, a former GOP congressman who pushed back aggressively against President Obama for smaller budgets, called Trump’s budgets the “most fiscally responsible budgets that have ever been drafted.”

But experts disagreed, pointing out that the president’s budgets relied on very optimistic growth assumptions and hefty cuts to domestic programs that were a non-starter in Congress. The budget deficit is up more than 80 percent so far this fiscal year over the same period in 2016 before Trump took office.

May deficit surges to $208 billion, 42% higher than last year
BY NIV ELIS - 06/12/19 03:41 PM EDT 1,458
9,963



The federal deficit in May reached $208 billion, surging 42 percent over last May’s monthly deficit figure, according to new Treasury Department data released Wednesday.

The figure put the cumulative deficit for the eight months of fiscal 2019 at $739 billion, within range of the full 2018 deficit, which amounted to $779 billion, according to the Treasury figures. Treasury estimates that the full deficit will exceed $1 trillion by the time the fiscal year wraps up at the end of September.


The deficit's precipitous rise follows the 2017 GOP tax act, which the Congressional Budget Office projected would add some $1.9 trillion to the debt over a decade, as well as bipartisan plans to increase spending on both the defense and domestic sides of the ledger.

Wednesday’s figures showed individual income taxes roughly on par with where they were at the same time last year, while corporate income taxes were down some $10 billion. Customs duties were up some $20 billion, as new tariffs have taken effect.

Spending, in the meantime, rose some $250 billion in comparison with the same period last year, largely in the categories of Social Security and health.

https://thehill.com/policy/finance/44822...-than-last-year

There are no fiscal conservatives any more..

Every statement out of Washington starts with.. "This is the richest nation in the world, why can't we afford to.... " fill in the blank with whatever program or spending initiative you want..

Ds and Rs, both found out it's easier to buy votes than earn them through honesty and tough decisions..

Oh well. Put it on the tombstone with Mitch McConnell's name.

I don't recall many Republicans using that statement. Democrats for sure. This reads as enlightened centrism and offers no helpful commentary.

Taxes, or tax cuts, rarely if ever 'pay for themselves'. Gov't. agencies, from local, city, county, state, and federal are constantly "needing" more money. Pass a tax? it's not enough. They need more.

Take Colorado for example. Over the last 5 plus years, they garnered $1 BILLION in taxes from weed. They still don't have a balanced budget. What did they do with some portion of it? Added a new governmental agency. Some of the money no doubt went to good things...........

The gov't. agencies never have enough money. I'd prefer that instead of ME cutting back on my spending, THEY cut back.

As DC said, years ago the Ohio Lottery was going to fund schools. Yet, almost each year, I hear of schools that are going to cut this, and that, without more money.

So much is unreported in unfunded future benefits. The OTRS is learning, as they are cutting benefits because they know they don't have the money to pay what they promised.

Fed. gov't. is the same - in unfunded future benefits. I don't believe they are cutting them though.

Well, you remind me of a blind squirrel that can't read. You should go back and read the entire thread or take reading comprehension 101 again, maybe that would help you. And you should get counselling for your TDS which has clearly clouded your judgement beyond repair.

These tax cuts are the greatest thing ever, savior of us all.. until they grow the deficit, then they are the worst thing ever, will be the downfall of us all.

Trump is a genius, also the devil if the devil was a fascist racist..

There, that's some commentary very much in line with what I typically read in here, hope you find that more appropriate and helpful to the conversation.

For some reason this reminds me of the conversation you've been keeping count of. I think you said we had discussed it four times?

Brilliant DC

I apologize for picking on you, as you're absolutely correct that this entire forum is almost completely devoid of rational thought.

I wouldn't say that.

Everyone knows that fiscal conservatives hide under a rock with a republican in the White House...

Deficit spending floats the economy, stupid....(paraphrasing)

It's all good.

There are almost no fiscal conservatives any more...

They make a public appearance every once in a while, kind of like Haley's Comet, to take a stand and hold up an important Democratic sponsored bill over some meaningless pocket change so they can parade their "noble stand" in front of the base... but in reality, they want to spend the money too, just on other stuff.

HEY you left out us guys who complained about our tax increase from the beginning.

Besides the military and a useless wall, where is all that stuff? Because it’s proven they don’t want to be spending it on useful things like education, healthcare, and infrastructure.

How rational is it, really, to waste keyboard keystrokes on this forum? I'm questioning my time use right now.

Lot's of people complain about tax increases.. but then they simultaneously complain about spending cuts... not for other people, you can cut their spending, just don't cut mine.

We need that bridge, that dam, those tax incentives for factories.... we need to increase the size of our local military base... our farmers need relief... we need storm damage assistance... we need that new interstate..

Take it from somebody else who doesn't need it.

Well, I don't think I'd go that far.

The thought that giving a tax cut of this type to the wealthy would actually help us is great, IF they plow the tax savings back into the economy... They didn't and aren't doing that.

They are hoarding cash, Buying back stock and in some cases, closing factories, laying off employees and actually causing more harm than good with the savings.

If anyone actually expected corporations to do the right thing by America, they were dreaming.

You want to help America, Give a tax cut to everyday working men and women. They'll spend it at grocery stores, restaurants, buying cars and clothes.

They'll spend it at WalMart and Joe's corner bistro as well.

If Corporations want tax cuts, fine, we can do that, but damn it, put some caveats in place.. To receive the cuts, they must agree to create X number of jobs, open x number of factories, pay Wages of value...something a man/woman can raise a family on.

Then audit them on it. If they don't perform as agreed, they owe the higher tax rate.

People (conservatives mostly) seem to always complain about how we give away medicare/medicaid and SS and how it's killing out budget..

Well what the hell do people thing giving away tax breaks are doing?

They also want tax cuts, just not on the people that need to pay more.

When a corporation like Amazon makes 11 billion dollars profit and pays zero in income taxes, the argument that some don't need to pay more doesn't hold much water.

Bro I do that every day. SMFH. No idea why I come back in here all the time other than the few posters I get along with well. Team BLUE maybe?

But every now and then you will read a posts that is more than rational thoughts, it lends new perspective or common sense to an issue. They are far and few between.

Yea there are posters I've come to talk to alot in PM and just on the forum, it's why I stay too. I do think the time here is wasted though. Thankfully there's no requirement that we can't waste our time on whatever we wish.

Talk to the people that write the tax laws.

Problem is they’re ‘owned’ by the companies that pay no taxes. The Ouroboros. (The snake that eats its own tail... the never ending cycle... into infinity.)

I agree. Although I never heard the term 'ourobors' before.

It’s like thinking the man that spent his entire life exploiting corporate loopholes to his own benefit was going to change the laws to close said loopholes once elected president.

I agree. But wouldn't it actually be nice to have a leader of our country who spoke out against it and pushed for such changes?

Nah, we can't have that.

Okay.

Why didn't Obama change it? Why didn't Bush change it? Why didn't Clinton change it? Why didn't Bush H.W. change it?

How tax cuts helped my business grow

In 1989, my mother and I started a business out of my garage. We raised money to get started, worked hard, and developed an office chair based on my dad’s expertise in ergonomics. Two years later, as our business was gaining steam, we discovered an unwelcome surprise. We owed an additional $86,000 in taxes on top of what we had already paid because the tax code was too complex and rigged against small businesses.

Today, Neutral Posture continues to thrive and create jobs in our community. We employ 150 workers, including 90 at our headquarters in Bryan, Texas, and another 60 across the U.S., Canada, and Puerto Rico.

But until recently, the tax code was holding Neutral Posture back from further growth, and for a small manufacturer like us, it was clear it was broken for decades. American job creators were due for a complete overhaul. The outdated, complex tax code and its sky-high rates needed to move aside in order to allow our company — and others of all sizes across the country — to keep growing by creating even more jobs and investing more in our hardworking employees.

After years of falling behind, Washington got serious about strengthening the American economy and enacted a tax plan in 2017 that levels the playing field for American businesses by encouraging investments and job creation in the U.S.

Comprehensive tax reform, the Tax Cuts and Jobs Act, cut tax rates for American families at all income levels and for job creators of all sizes.

As with many businesses in the U.S., Neutral Posture used our tax cut savings to raise wages, hire more workers, expand our product line, and make needed investments into our business and community. We have a new joint venture that will generate new sales for our company, which was partially funded with these savings.

https://thehill.com/blogs/congress-blog/economy-budget/438825-how-tax-cuts-helped-my-business-grow

Thank you Mr.President and Republicans of Congress.

Your post says it was intended for Portland but I'm pretty sure that your zealousness you just got carried away.

I don't know arch. Before Trump why wasn't anyone screaming for a wall?

They should have. They didn’t. They’re no longer in office.
#Whatabout_trump.

I don't think anyone has a problem with tax cuts helping small business. Once again you go off the rails.

So, when O didn't do anything about it, it was fine? What about, what?

Before Trump a lot of people (even a lot of the much loved democrats) are on tape talking about the border crisis and how we need to clamp down on illegal immigration and the crime it brings, etc... they may not have specifically talked about "a wall" but they were making all of the same accusations.

Indeed - the idea Dems want open borders is simply a lie.

The reason I believe the Dems don't want a wall - is that study after study has shown they don't work. Trump campaigned on a Wall - but then back tracked and said it was just for a short section of the border .... well if Walls don't work in general - having a short section of the border protected by a wall sure as heck aint going to do diddly. It's a waste of money.

Where did I defend any of the past presidents in this conversation? I’m not sure I defended O very often when he was in office. I wasn’t a big fan.
My point was, it’s trump’s turn. Nothing can be done about the past. At this point dragging it up as an argument is whataboutism.
What about now? What about trump?

So it seems that everything Trump keeps saying about "democrats want open borders" is another lie. Thanks.

I have said on here for years now and so have the Democrats they want to secure the border. But they haven't said things like "When Mexico sends them, they're not sending their best." Which we know Mexico doesn't "send" anyone. Or labeling immigrants as "criminals, drug dealers and rapists".

I'm not sure why in hell you're even trying to defend this clown. You know as well as I do he ramped up the hatred and vitriol unlike anything we've ever seen from a presidential candidate.

How in the hell did they get surprised by an $86,000 tax bill? Who did they hire to do the accounting and which CPA did they use? Whoever they used needs to be fired.

These are probably good people but idiot business people...

Oh stop dawg ...you know they still want to see Hillary’s personal emails and Barrack’s original Kenya birth’r certificate. It’s hopeless.

Well those idiots started a business out of their garage.

Today, Neutral Posture continues to thrive and create jobs in our community. We employ 150 workers, including 90 at our headquarters in Bryan, Texas, and another 60 across the U.S., Canada, and Puerto Rico.