How To Pay For Tax Cuts By Laurence M. Vance!!
(2017-08-19 at 13:37:51 )

How to Pay for Tax Cuts By Laurence M. Vance

Now that they have failed to repeal or repeal and replace Obamacare, Republicans are once again turning their attention to tax reform. And so are Democrats.

Senate Democrats recently issued a letter to President Trump and Senate Republican leaders outlining "three key principles that we believe are prerequisites to any bipartisan tax reform effort":

-First, we believe that tax reform should not increase the tax burden on the middle class. In addition, any tax reform effort should not benefit the wealthiest individuals.

-Second, we believe it is crucial that tax reform legislation go through regular order and not reconciliation. Using a fast-track process like reconciliation would undoubtedly result in outsized political influence on the process and significantly hinder lawmakers ability to close loopholes and end special interest favoritism that plagues our current tax system.

-Third, tax reform should be focused on providing a revenue base that meets the needs of our country. Deep cuts to our corporate, individual, and other tax rates are very costly.

Said Senate Minority Leader Charles Schumer: "We will not support any effort to rewrite the tax code to give another tax break to the top 1% or add even more to the deficit and debt."

Only 43 Senate Democrats (and two independents) signed the letter. Three Democrats facing reelection next year did not sign.

Republicans are in favor of tax cuts, but are divided on how any tax cuts should be "paid for." This is because Republicans (just like Democrats) are committed to the principle of revenue neutrality; that is, any revenue loss from tax cuts must be offset by revenue gains either from tax increases, broadening the tax base, or eliminating deductions or from additional revenue that flows into the federal treasury from economic growth as a result of tax cuts.

God forbid that government revenue should be reduced. This is because members of Congress-Democrat and Republican alike-have an insatiable desire to spend the taxpayers money.

The only alternative is seen to be "deficit-financed" tax cuts; that is, any tax cuts that are not revenue neutral are to be "paid for" by increased budget deficits.

The only real way to "pay" for tax cuts is by cutting spending. In their letter, Democrats maintained that they would "not support any effort to pass deficit-financed tax cuts, which would endanger critical programs like Medicare, Medicaid, Social Security, and other public investments in the future." Okay, fine. There are plenty of other things in the federal budget that could and should be cut.

For example, for the past two years, Senator James Lankford has published "Federal Fumbles: 100 Ways the Government Dropped the Ball." His report is a collection of specific examples of wasteful, duplicative, and inefficient federal spending, Here are just ten of them:

-The NIH funded a $2 million, multi-year study about how kids do not like to eat food that has been sneezed on.
-The NSF paid more than $2 million to assess the impact of climate change on giant pandas in China.
-The NIH provided $1.3 million to fund a social media campaign aimed at encouraging mothers to tell their teenage daughters not to use tanning beds.
-Medicaid made improper payments of $38.9 billion in 2016.
-The NIH provided nearly $500,000 for a program to send text messages to discourage chewing tobacco.
-The GSA awarded an almost $1 million contract to provide one photograph of Yosemite Falls to be cut into six pieces and hung in a new federal courthouse.
-The NIH provided more than $10 million for a series of studies to learn that stress plays a role in illegal drug use.
-The NSF invested more than $412,000 in research on a paper arguing that glaciers are best studied using feminist theories.
-The NEH spent $250,000 for a traveling classroom about prison life.
-The BLM announced a $750,000 funding opportunity for a five-year study of how the removal of the invasive juniper plant may impact the habitat of the sage grouse in one Idaho county.

(The NIH is the National Institutes of Health, the NSF is the National Science Foundation, the GSA is the General Services Administration, the NEH is the National Endowment for the Humanities, and the BLM is the Bureau of Land Management.)

We can all get a good laugh out of these and other examples of ridiculous government spending found in Senator Lankfords "Federal Fumbles." Other members of Congress and organizations that monitor government inefficiency and waste have issued similar reports over the years.

But this is no laughing matter as far as American taxpayers are concerned. And these things are chump change compared to the $4 trillion annual federal budget.

The problem is that members of Congress will not cut spending. They may propose cutting waste, fraud, and abuse. They may propose limiting the rate at which spending increases. They may propose spending cuts in some programs or agencies that are offset by spending
increases on "national security" or on some new program. They may propose cutting the budget of a program or agency because it spent money on or did something particularly egregious. But they will not actually cut spending.

The Republicans are the worst offenders. They claim to be the party of the Constitution. They claim to be fiscal conservatives. They claim to be in favor of limited government. They claim to be advocates of federalism. They claim to be supporters of the free market. But their claims ring hollow.

Under President George W. Bush, when the Republicans had majorities in both Houses of Congress, they practically doubled the budget and the national debt and massively increased government spending.

Republicans have controlled the House since the third year of President Obamas first term. They controlled both the House and Senate during Obamas last two years. They control the presidency and the Congress right now. Yet, no cuts of any substance have been proposed let alone enacted. And yet, finding spending to cut is certainly not a difficult thing to do. Not when the vast majority of things the government spends money on are either immoral wealth-redistribution schemes and income-transfer programs or unconstitutional foreign wars and government programs.

Any tax reform plan that does not "pay" for tax cuts with cuts in spending is just a waste of time.

As former congressman Ron Paul has well said: "The real issue is total spending by government, not tax reform."

Reprinted here with the permission of Mr. Laurence M. Vance and the Future of Freedom Foundation!! Please visit "Mr. Vances blog" at Lewrockwell.com and please visit his website "Vance Publications"!!