Tax cuts sparking growth is a fairy tale

The recent government shutdown, the longest in our history, was centered on the Republicans’ refusal to extend ACA premium tax credits. Estimates were that 24 million people would be affected negatively, with ACA premiums increasing in some cases by thousands of dollars monthly, and some subscribers dropping insurance altogether. But more importantly to Republicans, it seemed, was that the total estimated cost of extending the tax credits was $35 billion per year, often shown as $350 billion for the bill’s ten-year period.

That’s a very large sum. But the Big Ugly Bill contains many very large sums. The first Trump Tax bill (2017) decreased the top marginal tax rate from 39. 6% to 37%. The BUB extend s that for 10 years. While this favorable tax break disproportionately benefits the top 1% of earners, the total cost (reduction in tax revenues) is an estimated $600 billion!

This is only one example of how the Big Ugly Bill transfers wealth upward. People without employer-provided insurance will pay more for health care while the nation’s wealthiest get to pay a lower tax. Contrary to the fairy-tale stories about lower taxes on the wealthy creating prosperity for all, American University estimates extending the lower tax rate will reduce federal revenues by 2.24% and provide no benefit in terms of GDP, investment, or wages.

When will the Republican budget hawks start squawking about the cost of the Trump tax breaks for the wealthy that they supported?

Sue Ravenscroft

Ames