Once again it is time to revisit the topic of tax cuts and the deficit. Heated rhetoric and misleading claims are increasing because threats of a government shutdown are occurring while we head into another election year. Fortunately, Guy Benson tries to provide a reality check to so much misinformation.
He begins by talking about something that has bothered me for decades. When Democrats are in office they talk very little about deficits and the national debt. But deficits become a major concern if Republicans control Congress or the White House. The opposite is also true. Republicans turn in their “fiscal hawk cards” if their party is in control, but loudly complain about deficits if they are out of power.
But the falsehood being spread these days (especially on the campaign trail) is that tax cuts for “the rich” have been blowing giant holes in the budget. First, let’s remember that the 2017 legislation provides tax cuts for every income group.
Second, the tax cuts actually result in increased tax revenue. Guy Benson provides the latest updated data to show that tax revenue went up for 2019, but spending increased by over $200 billion. The largest increases came from Medicare, Medicaid, and Social Security. The rest of the increase came from additional spending on interest payments on the national debt and a smaller increase in defense spending.
Here’s another way to look at this. In 2019, federal tax revenues increased by four percent, reaching the highest level in American history. The tax cuts of two years ago grew the economy, lowered unemployment to its lowest levels, and increased federal tax revenues to its highest level.
If you look at these numbers, you would have to conclude that we run deficits not because we tax people too little. It is because government spends too much.