It's Big, But Is It Beautiful or Ugly?

Dueling political narratives have flared up with the passage of President Trump's so-called Big Beautiful Bill.  Democrats argue it doles out tax breaks for billionaires and penalizes the poor.  Republicans retort it boosts paychecks for working families and cuts waste and fraud.   

The 887-page bill hashed out between the Republican controlled House and Senate was signed into law on July 4 after days of intrigue, party in-fighting, partisan rancor, arm-twisting and all-night voting sessions. The political war of words is becoming a flashpoint for next year's mid-term elections.

Democrats have lifted the curtain on their tactic for next year's attack ads aimed at building a majority in both houses of Congress.  Here's an early preview of criticisms of the bill along with the specific provisions in the mega package: 

• The bill is just a tax break for billionaires.    Tax rates on every person--from the poorest to the richest--will remain where they are. The legislation makes the tax cuts permanent, with annual inflation adjustments for those in the 10, 12 and 22 percent tax brackets.  It also increases standard deductions from $15,000 to $15,750 for individual taxpayers and from $30,000 to $31,500 for married couples filing jointly, subject to income limits. Taxes on businesses remain at 21%.  Prior to the 2017 law businesses were taxed at 35%. There are also reduced limits on business expensing and deductions. 

• But billionaires are getting the biggest tax break.  Households making under $50,000 receive a 14.9% tax cut in the legislation.  Households earning under $100,000 got a 12% tax break.  The top 1%--the billionaires and millionaires--received a 2.4% tax cut from the rates they paid prior to 2017.  

• The bill does nothing for the middle class and poor. New deductions for tips, overtime and car loan interest support hourly workers. The new law increases the child tax credit to $2,200 from $2,000 starting in 2026. The credits are adjusted annually for inflation.  The bill will allow individuals to deduct tips on wages and overtime pay for tax years 2025 through 2028. The bill caps the deductions on tips at $25,000 per year.  Under the legislation, no taxes apply to overtime up to $12,500 per individual. The tax benefits phase out for individuals making $150,000 or more. It also allows borrowers to deduct up to $10,000 in car loan interest payments for the next four tax years, if final assembly for the car was in the U.S. Eligibility is tied to income: Those earning $100,000 or less ($200,000 for joint filers) qualify. The mortgage interest deduction remains capped at $750,000 for joint filers.   

• The law does not eliminate taxes on Social Security as promised.  Indeed, taxes on Social Security remain the same, despite the President Trump's campaign pledge.  However, the bill allows individuals 65+ with up to $150,000 in household income (joint filers) to subtract $6,000 from their income. Taxpayers earning more than $250,000 jointly or $175,000 individually are not eligible to receive the benefit. The standard deduction for Americans 65+ has been raised by $2,000 for individuals and $1,600 for households. An estimated 64% of seniors receiving Social Security will benefit from the changes.These deductions will expire at the end of 2028.The bottom 20% of taxpayers remain exempt from taxation on SS benefits. They pay no tax today.  Eliminating taxes on Social Security would have lowered federal revenues by $1.5 trillion over ten years, raising the federal debt.

• People will die because of Medicaid cuts. There are no cuts in Medicaid payments to eligible recipients. The law stipulates new requirements in 2027 for those who enroll in Medicaid.  Abled-bodied recipients will no longer be eligible unless they meet certain requirements, primarily working 20 hours a week.  The legislation exempts the disabled, pregnant women, those enrolled in school, anyone caring for a child younger than 14 or persons who volunteers at least 20 hours a week.  The Congressional Budget Office estimates there are 4.8 million of the 84.6 million people on Medicaid who will no longer qualify. Medicaid costs have spiraled out of control since 2019, rising 60%.  

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• People will go hungry without food stamps. There are 42.6 million people receiving benefits under Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps.  Despite fewer unemployed persons today, those receiving benefits remain the same as 2012. Under the Clinton Administration, there was a work requirement for food stamps.  The Biden Administration waived work requirements for able bodied people.  The new legislation adopts work requirements and requires states to contribute to SNAP benefits, which are now 100% funded by federal government. The bill specifies able-bodied adults without dependents must work 80 hours per month (or 20 hours per week) to qualify for food stamps. Exemptions are made for physically or mentally handcapped, pregnant women, those caring for young children and individuals enrolled in certain educational and training programs.  Additionally, veterans, the homeless and foster care youth under the age of 24 are exempted from work requirements. SNAP payments will continue at current levels.  It is unclear when the new work requirements will take effect.  The Agriculture Department is charged with issuing the final guidelines.                                         

• People will lose their healthcare coverage. The legislation imposes stricter income verification requirements while enhancing premium tax credits for purchasing Obamacare (Affordable Care Act).  The credits will lower out-of-pocket costs for Americans who enroll in ACA plans, which may lead to increased enrollment, particularly among low-to-middle-income facilities. Critics claim the eligibility verification will add more red tape for enrollees, causing some to drop out of the program. A total of 6.4 million individuals were fraudulently enrolled in ACA plans in 2025 alone, costing taxpayers an estimated $27 billion. In addition, the legislation excludes illegal immigrants from enrollment.   

• Medicare benefits are at risk.  Medicare benefits and spending are not changed under the legislation. However, about 1.3 million people who qualify for both Medicare and Medicaid may have an increase in out-of-pocket costs. Some illegal immigrants may potentially lose their coverage, depending on the final rules adopted by Medicare.   

• The BBB will increase the national debt and produce budget deficits.  The Congressional Budget Office estimates the legislation will reduce tax revenues by $3.7 trillion over the 2025-2034 period, hiking the deficit by $2.4 trillion.  The estimate does not account for how the tax reduction will impact economic growth. The Tax Foundation puts the estimated federal budget deficits at $2.9 trillion covering the years 2025 through 2034.

• The bill negatively impacts the environment and eduction.  The bill ends the $7,500 tax credit for electric vehicles on September 30.  It maintains tax credits for hydrogen, carbon capture, nuclear energy, geothermal energy and boosts oil drilling. Individual tax credits for residential energy projects, such as solar panels, expire after 2025. Tax credits for commercial wind and solar projects will continue as long as construction begins by June 2025 and facilities are placed in service by 2027. College endowments with more than $2 million in assets per student will pay an 8% tax on investment income. Institutions with fewer than 3,000 tuition paying students are exempt.  Under the legislation, student loan interest payments will resume this year after being suspended by the Biden Administration under a loan forgiveness program that was blocked by a federal appeals court. 

Federal Taxes: Debunking The Democrat Narrative

Political theater is hogging the spotlight as Congress grapples with the issue of federal income taxes. The actors in Washington are repeating familiar lines.  Tax cuts benefit the oligarchs and billionaires. The wealthy don't pay their fair share. The tax burden falls on the shoulders of the little guy.

Leading roles are being played by Sen. Bernie Sanders and Rep. Alexander Ocasio-Cortez. The Democrat duo are barnstorming the hinterland braying about a "government of the billionaires, by the billionaires and for the billionaires."  The rich are to be scorned and their earnings confiscated. 

The truth is without millionaires and billionaires the federal government would run out of money.  But class warfare has always been viewed by Democrats as a winning political strategy.  Personal success is permissive as along as your income doesn't cross the border into seven figures. 

Taxes are on center stage because of the impending expiration of key provisions of President Trump's 2017 Tax cuts and Jobs Act. Republicans are pushing legislation to make the current taxes permanent, while Democrats are characterizing the package as a pay off to the wealthiest.

Facts are stubborn reminders of the progressive nature of America's tax code.  The more money you make, the federal government takes a larger share of your income.  The 2017 legislation reduced taxes for most Americans, including those in the top 1% of the income bracket.

What Democrats and their media allies are loath to admit is the Trump tax cuts benefited most those in three of the bottom four income brackets. Included are Americans who earn $12,250, $49,750 and $106,000.  Raising their tax rates would hurt the middle class. 

If the current tax cuts are not renewed and rates revert to 2016 levels, 62 percent of tax filers would experience increases in their personal income taxes in 2026. 

Those who rail about reductions in taxes for high earners ignore history's lesson.  Even as taxes have been reduced for the top tax bracket, their share of the income tax burden has grown.  Conversely, the bottom half of earners share of the tax burden has sharply declined. Those are indisputable facts.

In 1980 the top marginal rate was 70% for the wealthiest 1%.  They paid 19% of all federal income taxes.  Since then, their share of the tax burden has grown, even as the top marginal rates were lowered.  At the same time, the tax share of the bottom 50% has declined from 7% in 1980 to 2.96% in 2022.

The latest Internal Revenue Service data from 2022, shows the top 1%--those with incomes over $663,164--paid 40.43% of all federal income taxes. The current tax rate is 39.6% for top earners.The top ten percent of taxpayers--those earning $261,591 and above--paid 76% of personal income taxes.

Including the top 25%, the percentage of taxes paid reaches 89%.  The IRS collected 97% of all personal income taxes from the top 50%. Of the 161.3 million returns filed for the tax year 2022, a total of 50.7 million individuals paid no federal income tax.  

Liberals are quick to point out that taxpayers whose income are in the bottom 50% pay more in payroll taxes than income taxes.  Employers collect these taxes from wages and pay the money directly to the IRS. Payroll taxes fund Social Security and Medicare. 

But that doesn't change the fact that the top 1% paid $855 billion dollars in personal income taxes in 2022, by far the largest share of any marginal tax rate group.  The wealthiest earned 22.4% of all the personal income yet paid nearly twice that percentage in taxes: 40.43%.

Tax fairness depends on your definition of what is equitable.  For historical perspective, the highest marginal tax rate was 94% during 1944.  From 1945 until 1963, it was 91%. By 1964, the rate fell to 77%. For the tax years 1991-1992, the rate dipped to 31%.  

Throughout those years, the top earners always paid the lion's share of taxes to Uncle Sam. 

The Trump tax cuts also lowered the corporate tax rate from 35% to 21%.  Reverting to the higher rate would risk increasing inflation. Consumers ultimately pay corporate taxes.  Firms price their goods and services based on all their costs, including taxes.  Demagoguery doesn't change that fact. 

America does not have a revenue problem.  Spending is the chief issue. In the fiscal years of 2020-2024, the federal government spent $38.35 trillion. The gusher created a deficit chasm of $10.78 trillion over the same period. The national debt has ballooned to $36.22 trillion and counting. 

But even a suggestion of budget cuts triggers caterwauling throughout the halls of Congress.  People will go hungry if a smidgen is sliced from the federal government's budget.  But unless the federal budget growth is halted, taxes will need to be raised every year to avoid runaway deficits.

As the Washington drama unfolds, ignore the rhetoric.  This play acting is all about politics.  Democrats want to wreck the Trump presidency by raising taxes which will sink consumer confidence and rattle the  economy.  Winning the midterms is the goal without regard to costs to American household budgets.    

Trump: More Than Tweets, Bathrobes And Soda

The New York Times, The Washington Post and establishment media have conjured the image of President Trump spending his days tweeting, guzzling Diet Cokes and stumbling through the White House in his bathrobe.  This burlesque portrayal is a deliberate attempt to demean his presidency.

In particular, the Times and the Post have used anonymous sources for the most scandalous, outrageous stories lampooning Mr. Trump.  To be clear: this is not a blanket endorsement of everything Mr. Trump has uttered or tweeted, but the media has painted a one-sided picture.   

Consumers of exclusively mainstream news have become so biased by this reporting, many refuse to believe the president has any redeeming qualities.  Viewed through their prejudiced lens, Mr. Trump's achievements include dividing America, throttling minorities, suppressing females and immigrants.

However, facts have a stubborn way of interfering with this deceptive narrative.  The president has spurred economic growth, created record numbers of jobs, boosted median income, slashed red-tape regulations, improved security at the border and raised America's foreign policy prestige.

For the skeptics, here is a list of accomplishments in just 20 months for the Trump Administration supported by facts and figures, most of which were gleaned from The Bureau of Labor Statistics, Internal Revenue Service, Council of Economic Advisers and Commerce Department:

The Economy

Four million new jobs have been created since the presidential election.  More Americans are now employed than ever before in our history.  Unemployment claims are at a 50 year low. African-American and Hispanic unemployment rates have reached historic troughs.  Female unemployment has plunged to its lowest level since 1953.  Median household income has risen to $61,372, a post-recession high water mark.  American workers enjoyed the biggest leap in pay since 2009 as the average hourly earnings for private workers advanced 3.1 percent this quarter, compared to 2017. Nearly four million Americans dropped off the food stamps rolls. In the latest quarter ended in September, the American economy grew a robust 3.5 percent, exceeding analysts projections.  Most economists credit the Trump tax cuts for the boom.

Business

Investment is flooding into the U.S. after Congress lowered tax rates for businesses.  America's corporate tax rate was the highest in the developed world.  More than $450 billion has pored into the country from overseas businesses owned by American companies. Manufacturing has bounced back after decades of decline, reaching its highest level in 14 years.  More than 400,000 manufacturing jobs have been added since the election. Retail sales have surged 6.4 percent since July of 2017, reflecting rising consumer confidence and increased disposable income.  Last year job satisfaction among American workers hit its peak since 2005. Real wage compensation paid by businesses has risen 1.4 percent over the past year after eight years of stagnation.

Health Care

This ranks as the most under reported area of improvement for Americans.  Mr. Trump enacted changes to the Medicare program, saving seniors an estimated $320 million on drugs this year.  The Federal Drug Administration, under prodding from the president, set a record for generic drug approvals, saving consumers an estimated $9 billion. The administration enabled small businesses to join together to offer affordable health insurance to their employees by removing restrictions to form Association Health Plans.  Legislation signed by the president repealed the infamous "death panels" created by Obamacare.  The Department of Agriculture funded more than $1 billion in initiatives to improve access to health care in rural areas for 2.5 million people.

Border Security

Stopping drugs, human trafficking and violent gang members from flowing into the country has been a priority of the administration.  Statistics document the success: Arrests of 796 members of the Central American gang MS-13 in 2017, an 83 percent increase from 2016. ICE rescued or identified more than 500 human trafficking victims in 2017 and more than 900 child exploitation victims.  ICE agents seized more than 980,000 pounds of narcotics in 2017, including 2,370 pounds of fentanyl and 6,967 pounds of heroin. In a related area, the administration secured $6 billion in new funding to fight the opioid epidemic, arrested 28 medical professionals and revoked 147 registrations for physicians over prescribing opioids.

Foreign Policy

President Trump withdrew from the Iran nuclear deal and imposed tough sanctions on the rogue regime.  In the wake of sanctions, Iran's currency has plummeted, international companies have pulled out of the country and the Treasury Department has levied sanctions against key regime individuals.  The president opened negotiations with North Korea in an effort to denuclearize the totalitarian nation. Despite the media influenced image of Russian coddling, the administration has expelled dozens of Russian intelligence officers, sanctioned oligarchs and their companies and enhanced support for Ukraine's Armed Forces to defend against Russian aggression.  In addition, Mr. Trump demanded European countries increase financial support for NATO, the military alliance between Europe and North America.  The result was a hike in 2017 of 4.8 percent in defense spending by member states, amounting to $42 billion. Of course, the piece de resistance was the renegotiation of the flawed NAFTA agreement.

Mr. Trump is constantly savaged because he doesn't stick to the script of past presidents.  The media and Democrats are aghast at his nonconformity.  Many elitists believe a president should be measured on style not substance.  Being "presidential" matters more than getting things done for Americans.

The U.S. had eight years of presidential style.  The country was hungry for  change.  The media has never gotten over the fact American voters chose an outsider over its favored career politician.  Irregardless, the media has an ethical obligation to report good news along with the bad.     

CBO: Too Often The Numbers Do Lie

Your local weather forecaster has better odds of being right than the Congressional Budget Office (CBO).  Despite its lousy prediction record, the media continues to tout the CBO's estimates as unimpeachable numbers not subject to skepticism.  Even a meterologist knows better. 

The budget office issues an annual deficit prediction 12-months ahead of the fiscal year, yet it errs by billions of dollars.  Its yearly economic growth models are just as inaccurate. CBO predicted 3.2 percent GDP from 2010-2016.  Actual GDP performance was 2.1 percent, a yawning disparity.

Notwithstanding its slipshod record, the CBO claims to be "strictly objective and impartial" in its role of producing 'independent' analysis of issues to support the Congressional budget process. Lawmakers are supposed to look to the CBO to provide the cost to taxpayers of proposed legislation.
 
From its beginning in 1975, the CBO has clung to antiquated scoring methodologies that skew the results and raise questions about the accuracy of its forecasts.  Like many government agencies, the CBO has resisted calls to change its calculus to fit today's economic realities. 

Many of the CBO's problems can be traced to its founding.  The creation of the CBO was a Democratic political ploy to wrest control of the budget process from the Office of Management and Budget (OMB) which reported to President Nixon at the time.

With lopsided majorities in the House and Senate, Democrats passed the Congressional Budget and Impoundment Control Act of 1974 birthing its own budget agency to weaken the OMB and to jigger cost estimates to fit its agenda.  Democrats named a director, who built a team of party loyalists. 

Since its infancy, the CBO has been the epitome of the Deep State, a reference to government employees who influence federal agency policies to reflect their own political views.  Even if the media uses the words "non-partisan" to describe the CBO, it serves its masters in Congress.

By its own admission, the CBO "consults" with members of Congress before it produces its estimates. Lawmakers can and do manipulate assumptions that the CBO bakes into its projections and forecasts on legislation. So much for an unbiased, nonpartisan estimate. 

Take the CBO's infamous forecast of the 10-year price tag of Obamacare.  Shilling for the proposal, President Obama vowed the legislation's price tag would be $940 billion. Magically, the CBO crunched the numbers and guesstimated the cost would be $938 billion.

That was in 2010.  Two years later the CBO did a "whoops" and restated its estimate.  In 2012, the ten-year cost had escalated to $1.76 trillion.  It turned out many of the original assumptions in the formal estimate were provided by one of Obamacare's architects, Jonathon Gruber.

When Republicans launched a legislative battle to repeal Obamacare this year, the CBO stepped in and effectively handed the Democrats a sledgehammer to smash the effort.  The CBO calculated 23 million people would lose health coverage in the insurance exchanges under the GOP plan.

The media used the figures to tar Republicans and scare Americans. No journalists bothered to look at the CBO assumptions. Agency bean-counters inflated the forecast for enrollment in Obamacare exchanges to make the losses appear larger than realistically expected over a 10-year horizon.   

With tax reform blinking on Washington's legislative radar, the CBO has dredged up findings that match the Democrat narrative of exploding deficits.  After examining the House and Senate tax plans, the CBO has projected 10-year deficits totalling $1.4 trillion and $1.7 trillion, respectively.

The same Democrats who applauded President Obama's $1 trillion budget deficit in a single year, are appalled and shocked at the estimated shortfall caused by tax reform.  However, the CBO's flawed analysis does not assume the reforms will fuel economic growth that will increase tax revenues.

The charade has lasted too long.

Virginia Representative Morgan Griffith and two of his colleagues recently offered legislation to abolish the Budget Analysis Division at the CBO.  "Too often predictions made by the CBO turn out to be far off the mark," Griffith told the House in pleading his case. 

Hidebound members of the House rebuffed the measure.  The swamp takes comfort in sustaining bureaucracies, particularly those that serve its purposes at the expense of taxpayers.

The CBO and its 250 analysts, economists and budget specialists have failed to publish accurate forecasts Congress can rely on in making decisions.  Axing the CBO will remove an obstacle to Washington reform. And it will have the added benefit of lowering the water level in the swamp.

Tax Scam: Don't Be Fooled By Tax Cuts

Washington is buzzing about tax cuts as Congress prepares to tackle one of the president's top agenda items.  As expected, both political parties have engaged in a propaganda war with little attention paid to the American taxpayer's No. 1 villain: the indecipherable federal tax code. 

The tax code is a government document of more than 10 million words that details the rules individuals and businesses follow in computing their federal taxes.  Over the past 60 years, the instrument has grown nearly 144,500 words annually, according to the Tax Foundation.

This complexity creates migraine headaches for taxpayers.  Americans spend about 6.1 billion hours to comply with the onerous tax code.  Ninety percent of taxpayers hire a professional to prepare their taxes at a cost of $233.8 billion annually.  

No wonder a Pew Research poll in 2015 found that 72 percent of Americans are confounded by the incomprehensible code.  Even today, as Americans grapple with the new tax plan details unveiled by the House and Senate, it's impossible to discern the dollar impact on the average household.

Even if rates of tax are lowered, it may not translate into an individual household owing less money to Uncle Sam.  That's because the tax code contains guidelines for deductions and exemptions that lower the taxable income.  The rate applies to adjusted taxable income not the total income.     

Some deductions are well known.  For example, the write-offs for interest on home mortgages, charitable donations and medical expenses.  Others are not so well understood. Income may be taxed at different rates depending on the source.  Some income may be excluded from taxation.

In many ways, that renders the tax rate meaningless.  For instance, what if tax deductions for child care and educational expenses are abolished, but the tax rate is lowered by five percent.  Depending on the dollar amount of the lost deduction, it may mean a higher tax bill for some.

If you include businesses in this discussion, the code takes on even more importance.  The code includes a legion of business offsets and credits, referred to erroneously as loopholes.  Although the official business tax rate is 39.1 percent, most corporations pay only to 10 to 15 percent in taxes.

Individuals also game the tax code.  In theory, households earning over $200,000 are supposed to pay around 40 percent in taxes.  In practice, studies show that the effective rate is 23 percent because they are armed with tax planners and lawyers paid to legally reduce their tax bill.

That's why tax rates distort tax fairness.  To rectify this imbalance, Congress needs to quit fiddling at the margins on the tax issue.  If lawmakers and the president are serious about tax reform, the first step should be to scrap the arcane tax code.  Blow it to smithereens. 

In its place, Congress should adopt a simple flat tax for all Americans, regardless of income.  No individual deductions.  No business loopholes.  No special treatment for income based on the source.  Whatever money you make, no matter how it's earned, it is taxed at the same rate.  Period.

Some will scream "Unfair!"  They want a regressive tax system that punishes the rich.  The top 10 percent already pay two-thirds of the taxes collected from individuals.  Mount Everest taxpayers--those in the 0.1 percent echelon--make up 16 percent of all household taxes.

Pandering politicians, who don't give a wit about fairness, demonize those with personal fortunes and foster class envy. That's why brainwashed Americans believe the wealthy do not pay their fair share. The bottom 50 percent of taxpayers contribute 2.8 percent of federal tax revenue. Talk about unfair.

If the object of the tax code is to inflict pain on the wealthiest Americans, then perhaps it would be better to just toss the filthy rich in jail and confiscate all their wealth. (Insert tongue in cheek here.) Under a flat tax or virtually any other system, the wealthy will always pay the largest share of taxes.

Once Congress passes a flat tax, then it must address payroll taxes.  For many Americans, payroll taxes ( Medicare, Social Security, etc.) take a larger bite out of their paychecks than federal income taxes.  All but the top 20 percent of Americans are in this tax pickle.

That would crack open Pandora's box because Congress would have to wrestle with fixing Medicare and Social Security.  Too many seniors would howl.  For similar reasons, Congress avoids dealing with the tax code.  Accounts, lawyers and tax preparation firms would throw a tantrum. 

Real tax reform requires political courage and a honest debate instead of political grandstanding.  For that reason, it won't happen.  Not in Washington.  Not this year.  Not ever.  Swamp creatures prefer tax favoritism over fairness because that's what the lobbyists and special interests want.

And these same deep-pocketed lobbyists and special interest groups pay for the re-election campaigns of those who inhabit the swamp. They are the masters most lawmakers serve, not average American taxpayers.    

Democrats' Mantra: Tax Cuts Are Evil

From the second President Trump unveiled his plan to reduce federal income taxes, the Democrat clucking began.  The party of Resistance discharged a stream of negatives.  The plan will enrich the wealthy.  It will rob the poor.  The middle class will get shafted.  Tax cuts are evil, evil, evil.

If all this sounds familiar, it's because Democrats dip into their bag of class warfare tricks and pull out the same arguments every time the GOP floats the idea of tax cuts. Their thesis becomes the media narrative, creating an illusion that not a single American wants lower taxes, except the fat cats.

The Tax Policy Center, an virtual arm of the Democrat Party supported by Brookings Institution and the Urban Institute, rushed to judgment on Mr. Trump's plan.  Without waiting for the details to be hashed out in Congress, the center howled the government would lose $6.2 trillion in revenue.

That last counterfeit claim is a hackneyed favorite of Democrats.  It is factual that not all tax cuts hike government revenues.  However, evidence exists that many have lined the government's coffers.Those are never mentioned by demagogue Democrats in their anti-tax sermons.

For instance, the federal tax rate for the top one percent was reduced in 1997.  Despite the drop, individual tax revenues rose 9.8 percent that year.  In the following year, tax receipts climbed 10.6 percent.  Tax rates fell but the government took in more money.  Amazing.

The same scenario played out in 1997-1998 when corporate income taxes were sliced.  During the period, income tax revenues actually increased by 28.3 percent the first year and 8.2 percent the following year.  Jobs and investments grew.  Corporations and individuals benefited.

The Mother of All tax cuts occurred in 1981 when President Reagan wielded a meat axe to the federal tax tables. The jobless rate was 9.6 percent when he took office.  When he left, it had dipped to 5.3 percent. Government revenues soared 82 percent from 1981 to 1989. The economy roared.

In every one of the instances cited above, the Congressional Budget Office's (CBO) predictions about tax revenues were off the mark.  Keep that in mind when you start reading and hearing about the CBO's dire predictions about revenue shortfalls and soaring deficits triggered by the Trump plan.

The CBO, which supports Congress' budget process, has a long history of being wrong.  The bureaucrats are experts at crunching numbers, but their assumptions often fail to correctly gauge the economic activity fueled by reducing taxes for individuals and corporations.  

Mr. Trump's tax plan needs to be fleshed out in Congress before it can be fairly assessed.  The basic outline requires added specificity.  But it is a step in the right direction.  Americans will benefit from simplification with fewer tax brackets.  Many will pay less in federal taxes.

There will be increased child care tax breaks for couples.  The tax marginal tax rate will drop for upper income earners who pay the lion's share of revenues collected by the government.  Despite the benefits, don't expect the Democrats or the lapdog media to embrace the plan.

The Resistance is banking on Americans' ignorance and gullibility about taxes to win the argument. Class envy is their weapon of choice.  Soak the rich is their battle cry.  Lost in all the rancor will be a rational discussion of how tax policy can jump start America's weakling economy.

Middle Class Malarky

Even for a man with a penchant for political exploitation, President Obama's rhetoric on the extension of the Bush tax cuts has plumbed new depths of demagoguery.  In a desperate gambit, the White House warned that failure to reach a tax deal would sack middle class families' Christmas shopping plans.

"The president believes Democrats and Republicans should come together to renew middle class tax cuts,"  the White House said in a statement that predicted retailers' Christmas stockings would be stuffed with lumps of coal if the Republican-authored tax cuts were allowed to expire.

The crass appeal from the White House painted the president as a champion of the middle class, a favorite theme of the Obama campaign during the election.  What makes the empty oratory so odious is the fact that the Obama presidency has been no friend of the middle class.

On practically every economic measure, middle class Americans are worse off than four years ago.

Annual incomes for the middle class have plummeted an average of $4,520 since President Obama took office in 2009, the year the recession officially ended.  The Census Bureau reported that median income has belly-flopped to $50,054.  That's a 4.1 percent decline from 2009.

The median income level is the lowest it has been since 1995, nearly two decades ago.  The president and his economic policies have failed miserably to deliver a recovery for the middle class.  In fact, the middle class has fallen further behind under Obama.

During the Obama presidency, the ranks of the middle class have shrunk.  Pew Research found that 51 percent of all adults fell into the middle income tier in 2011.  In 1971, more than 60 percent of Americans were included in the middle income echelon.

Middle American earners' share of the household income pie also has diminished.  Middle income households account for 45 percent of all earnings.  Just two decades ago, middle earners' share of total income was 62 percent, according to Pew Research.

Meanwhile, health care premiums have skyrocketed $3,000 since Obama assumed the presidency.  Inflation has hijacked 6.62 percentage points of purchasing power from the middle class in the last four years.

Obama has saddled Americans with national debt that stands at $51,972.66 for each middle class man, woman and child. Appallingly, that means Greece's national debt per person is now 35 percent lower than the United States, according to the International Monetary Fund.

Yet Obama has the audacity to claim the tax extension will save the middle class from financial ruin.   Who is he kidding?  Obama's real agenda isn't to lift the middle class.

The president wants to stoke the fires of class warfare, pitting the middle class against the wealthy in an effort to create divisions that will promote income redistribution.  The rich are Obama's bogeymen, blamed for everything that can't be pinned on former President George W. Bush.

Another year of Bush's tax cuts will not cure what ails the middle class.  Economic growth across every industry is the shining hope for the middle class to recover from the losses suffered under the current administration.

Without a robust economic rebound, even Santa Claus won't be able to rescue the middle class.