Editor’s Note: For another viewpoint see Yes, It’s Time to Try a New Approach
The Democrats running for president have demanded the government raise taxes on income, gasoline, energy, capital gains and your life savings at death. And your retirement savings will be hit by multiple taxes that they promise will only hurt “the rich” but will first and foremost reduce the value of your savings in your IRA or 401(k) or health savings account.
Joe Biden, Elizabeth Warren and Bernie Sanders have all threatened to repeal the Republican tax cuts Trump signed in December 2017. That alone would hike taxes on smaller businesses, increase the business tax rates in the United States higher than China’s. Your child tax credit would be reduced. Your standard deduction will be reduced.
If Democrats repeal the Republican tax cuts, a family of four earning the median income of $73,000 would see a $2,000 tax increase, and a single parent with one child making $41,000 would see a $1,300 tax increase. Millions of low- and middle-income households would again be stuck paying the Obamacare individual mandate tax. Utility bills would go up in all 50 states as a direct result of the corporate income tax increase.
Small employers would face a tax increase due to the repeal of the 20 percent deduction for small business income. The United States would have the highest corporate income tax rate in the developed world. Taxes would rise in every state and every congressional district.
The death tax would ensnare more families and businesses. The alternative minimum tax would snap back to hit millions of households. Millions of households would see their child tax credit cut in half. Millions of households would see their standard deduction cut in half, adding to their tax complexity as they are forced to itemize deductions and hassle with the shoebox full of receipts on top of the refrigerator.
Federal taxes are too high. Federal spending is too high. Both should be reduced by reforming government to cost less.
To begin with, when you earn your paycheck — you earned it. Confiscation of your income is a big step and the government must justify that decision.
We know from experience that when tax rates are reduced the economy grows faster, more jobs are created and paychecks fatten. Higher taxes hurt the economy.
In the last two and a half years since Trump was elected and reduced the tax burden, the median family income has grown by $4,000 to $65,000. In the 7.5 years of Barack Obama (after the recession ended) the median household income grew only $1,000.
Calvin Coolidge, John F. Kennedy, Ronald Reagan and Donald Trump all cut taxes and the economy grew. When Obama raised taxes we had the slowest, weakest recovery in 60 years.
Last year the federal government took away $3.3 trillion from the American people, nearly 17 percent of GDP. That is more than enough for the national government to raise and spend on the limited number of expenditures allowed by our Constitution.
Defense spending, which is mentioned in the Constitution, consumes about one-sixth of the federal budget. Total spending on national defense is $649 billion, or 3.2 percent of GDP.
The problem our nation faces is that the federal (and state and local) government spends too much, not that it fails to take more of our time, our lives and our life savings each year.
Politicians begin to focus on reforming government to cost less only when we as citizens take “raise taxes” off the table. Tax hikes are the alternative to reformed and limited government.
Economic growth increases tax revenue, not by hiking taxes but by having more Americans working with higher wages. The same tax rates bring the government more money.
Some people like the idea of taxing “the other” to punish successful people. But that damages all Americans as jobs, income and growth fall. Envy leads to very bad decisions. It is a character flaw, not a political program.
Government should focus on its own failure to reform itself over the past decades rather than shove its fat hand into your family’s savings. Again.
