The new Trump/Republican tax plan is now law. They have told us that those cuts (which go mainly to the rich and the corporations) will not increase the national debt, but will pay for themselves by massively increasing economic growth. They say this growth, by producing more taxable profits from business and more workers employed and paying taxes, will actually negate the amount of revenue lost by cutting taxes (or magically increase government revenues).
This is not the first time we've heard this from the Republican. It's just the old "trickle-down" argument they have been trying to sell for decades. We were told the same thing when Reagan made large tax cuts, and again when Bush II made large tax cuts -- both of which mainly benefitted the rich.
It didn't work. Note in the chart above, the Reagan and Bush II administrations had the largest increases in the national debt of any presidents since World War II. Both administrations more than doubled the national debt -- Reagan increasing it by 186%, and Bush II increasing it by 101%. They were the only presidents increasing the debt by a triple figure percentage.
Tax cuts can stimulate the economy if done correctly -- aimed at lower income workers who will spend that money. But it's just silly to say that tax cuts in general, especially those aimed mainly at the rich and corporations, will increase government revenue or be revenue neutral. That was not true in the past, and it is not true today. Tax cuts do NOT pay for themselves.
Don't be fooled by this same old lie now that it's being told by Donald Trump and the current crop of congressional Republicans. This new tax cut law will decrease government revenue, and combined with their wish to spend more for an already bloated defense budget, will increase the national debt massively.
And the increase under Trump is likely to be the largest increase we have seen. Thanks to the loss of revenue from those cuts, the government will be borrowing an additional trillion dollars this year -- an 84% increase over last year.
It's amazing to me that when a Democrat is in the White House, the Republicans scream long and loud about budget deficits and the national debt. But when a Republican is in the White House, spending more money and increasing both the deficit and national debt is of no concern to them. It is hypocrisy on steroids.
