Tax Reform and Spending
Tuesday, November 07, 2017
I have to admit that I violated my news blackout earlier today. I made the decision to have my underground sprinkler system winterized and had the pleasure of being given a three-hour window of opportunity. I had to make a decision to watch an episode of "Law and Order" or have the news on in the background.
I chose the news and the topic of the moment was President Trump's lunch with the Republican Senators to discuss his tax cut and reform plan. Just to add to the entertainment value of the news program the President and one of the senators had exchanged several comments back and forth on Twitter prior to the scheduled lunch.
During all of the banter back and forth on the news channels, one thing in particular caught my attention and, frankly, I was just a little upset when I realized how much our elected officials continue to fail us. The item was the demand or idea that a tax cut must be revenue neutral.
The argument was that our government can't afford the tax cut unless our government could find savings in other areas of the budget to pay for the tax cut. This is our same government that is approaching a $21 trillion deficit ($21,000,000,000,000)!
I found it very upsetting that our politicians have no problem spending money on their pet projects. When it comes to returning some of my tax dollars back to me, however, all of sudden they find religion and are suddenly concerned about the budget.
The question of can we afford a tax cut or should our politicians return some of the American public s money back to us after we have spent trillions of dollars rebuilding other countries in the last 20 years is simply mind-boggling.
Our federal government has not had a balanced budget in more than 20 years. It is not our government's money, it is our money.
Do you know that if our government just froze spending at the current level and tax revenues remained at their historical 65-year average, the federal budget would balance in 6 years, or by 2023?
If fewer regulations and tax cuts boost nominal growth, in my opinion the budget would be balanced even sooner.
Current tax receipts are above their historical long-term average, but our politicians will still spend more than $650 billion above what they take in this year. There is a lot of fat to trim within the government.
In my opinion, if the private sector were running Washington, spending would fall drastically. If President Trump froze spending, our government would be forced to become more efficient. No more spending $283,000 on a hammer, $150,000 on a toilet seat, or whatever crazy cost we have all heard about over the last several years.
Don't get me wrong, our politicians will have to make some very difficult decisions, but that is what business professionals do all day long.
The majority of the federal budget goes to the military, social security, Medicare, and Medicaid. The actual percentage is approximately 86 percent and the other 14 percent is discretionary. Hence the problem!
We are not going to cut the military and if a politician even mentions cutting back on social security, Medicare, or Medicaid the television ads start running showing a grandma in a wheelchair being pushed off a cliff. So the first step - since no politician will cut any program - is to simply freeze all government spending at its current level. The average working American has not had a pay raise in 20 years; maybe it's time for the government to do what the majority of its citizens have had to do over the last two decades.
As always, keep calm and carry on!