There is no doubt that America very badly needs an overhaul
of its system of federal taxation. The IRS tax code currently runs to an
unbelievable 74,608 pages and includes tens of thousands of loopholes and special
deals for various special interests, so that any large corporation or wealthy
individual who can afford to hire clever tax accountants and attorneys can
manage to pay almost no tax at all.
The nominal federal corporate tax rate is 35%, but the 30
largest corporations in America paid an effective tax rate of 26.7%. General Electric even managed to pay no taxes
at all and get a $400 million rebate, for an effective negative tax rate
of -4.5%.
So certainly the tax code needs to be massively simplified
and cleaned out of all the special interest deductions and loopholes. But total
taxes don’t need to be reduced – they actually need to be increased. Democrats
ignore the fact that their programs are debt financed. Republicans make a big deal about reducing
the debt, but when in power they only increase it. Voters seem to ignore the
debt – they want more from the government but they certainly don’t want to pay
for it.
In fact the federal debt exploded 101% under the second (Republican)
President Bush who added $5.8 trillion to the debt. Then it exploded another
68% under (Democratic) President Obama, who added another $7.917 trillion
during his administration. Currently we are running an annual deficit of about
$660 trillion, yet the current Trump administration is talking about reducing
taxes, which is clearly the wrong direction to go, and Democrats like Bernie
Sanders want to add yet more wildly expensive debt-financed programs like federally
financed medical care for all.
Of course voters don’t want to give up their government
benefits like Social Security and Medicare/Medicaid, and certainly they want
things like National Parks and support of the arts, but in fact when push comes
to shove they don’t want to pay for these things.
So in fact whatever the Trump administration is proposing
for tax reform is thoroughly inadequate, and whatever Democrats are proposing
is just plain crazy.
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