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Everything You've Always Wanted to Know about the Trump-Republican Tax Plan

By   Follow Me on Twitter     Message Robert B. Reich       (Page 1 of 3 pages)     Permalink    (# of views)   2 comments

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From Robert Reich Blog

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Have you noticed that there's no Trump tax plan and no Republican tax plan? All they've come up with so far is a bunch of platitudes about how nice it would be to cut taxes, simplify the tax code, and spur economic growth.

Who doesn't support these nice goals?

The reason there's no tax plan is congressional Republicans are hopelessly divided on it.

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Right-wing Republicans (the "Freedom Caucus" along with what's left of the Tea Party) are most interested in reducing the size of the government and shrinking the federal deficit and debt.

Corporate and Wall Street Republicans -- along with Donald Trump -- are most interested in cutting taxes on corporations and the wealthy. They have the backing the GOP's big business donors who stand to make a bundle off tax cuts.

Here's the problem. You can't have a giant tax cut for corporations and the wealthy, and at the same time shrink the federal deficit and debt -- unless you make gigantic cuts in government spending on things the American public wants and needs.

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According to the Congress's own Joint Committee on Taxation, Trump's proposed corporate tax cuts alone would reduce federal revenue by $2 trillion over 10 years.

Cuts of this size inevitably have to come out of the federal government's three biggest expenditures, together accounting for over two-thirds of total government spending -- Social Security, Medicare and Medicaid, and defense.

Even if you eliminated everything in the rest of the federal budget -- from education to meals on wheels -- you're not going to get nearly enough to pay for the giant tax cuts Trump and his corporate and Wall Street Republicans are talking about.

But they wouldn't dare shave a hair off Social Security. Americans who have paid into it for their lifetimes expect that it's going to be there when they retire. Social Security is already facing some financial strains, and no politician with half a brain is going to slash it.

Medicare is almost as popular. Recall the Republican signs at Obamacare rallies that read "Don't Take Away My Medicare."

As to Medicaid, well, if Republicans learned one thing from the buzzsaw they ran into over the Affordable Care Act, it's that they better not mess with Medicaid because a huge percentage of America's elderly depends on it.

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Which leaves defense spending. But wait. Donald Trump is on record as pledging to expand defense spending by 10 percent -- $48 billion.

Then there's the cleanup from Hurricane Harvey, estimated to be at least $150 billion. And more cleanup from Hurricane Irma, or any other of the hurricanes being dredged up by hotter oceans. There's also Trump's "wall" -- which the Department of Homeland Security estimates will cost about $22 billion.

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Robert Reich, former U.S. Secretary of Labor and Professor of Public Policy at the University of California at Berkeley, has a new film, "Inequality for All," to be released September 27. He blogs at www.robertreich.org.

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