By Brett Linley
For the first time in over 30 years, America may see some movement on tax reform. Recently, per Politico, the House just narrowly passed their own tax plan. Soon, the Senate will vote of their own version of the bill. Both plans have faced tough scrunity, as some people may even see their taxes go up. Ultimately, however, there’s one big problem. Even if passed, we may never see spending cuts coupled with these reforms.
As Politico noted, the tax cut could add “nearly $1.5 trillion to the deficit over a decade.” For many conservatives and libertarians, starving the government of so much money is cause for celebration. Putting money back into the pockets of the people who earned it is a staple of free-market economics. What complicates the issue, however, is that these gains will only be temporary.
They will only be permanent gains, in reality, if corresponding cuts are made to spending. The unfortunate truth, as many of us know, is that the government doesn’t stop spending just because the money’s gone. If there aren’t enough taxes, they’ll just borrow instead. This is an issue on multiple levels.
The first, most fundamental, issue is that this chronic spending means taxes will be raised in the future. Most likely, on the millennials of today. Eventually the bill comes due, and the government will no longer be able to delay the suffering. Many of the people enjoying today’s tax cut will either be retired or, to be frank, deceased when the check comes. For the thousands of Americans with no real say in the matter, they shoulder the cost while realizing minimal benefits.
A Dollar Tomorrow for a Cheesburger Today
What’s more, the idea that tax cuts by themselves put more money into the economy is slightly disingenuous. As aforementioned, the deficit in funds will be borrowed. Who do those borrowed funds come at the expense of? The private sector. Instead of being put to their most productive uses, those funds will be borrowed for new government boondoggles.
Many Republicans would like you to believe that we’re all the ones making out with a tax break. In a sense, they’re correct. A code with fewer brackets and loopholes is a plus for everyone in the long run. But how will those cuts be paid for? While they may pay lip service to the idea of spending cuts, that’s far from their reality. With their hand in the pot of taxpayer money, politicians are the real beneficiaries.
All one needs to do is look at the recent budget proposal from the Trump administration. While small programs are cut here and there, the glaring problem is the $54 billion hike in defense spending. When it comes to spending, even Republicans can’t really help themselves.
This all isn’t to dismiss the GOP proposal out of hand. There are some tenants that all fiscal-libertarians can be proud of. It all has to be taken in context, though. We have to weigh what we gain now with what we pay later.
So before instinctively celebrating news of a tax cut, it’s worth while to take pause and think. It’s worth wondering whether politicians have the gall to even reduce the rate of spending increases. If they don’t, more money will be borrowed from the private sector today, only to be taken back out of your pocket tomorrow. That’s not how you make America great again.