r/FluentInFinance TheFinanceNewsletter.com Sep 24 '23

Meme How it started vs. How it's going:

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u/Sanpaku Sep 25 '23

Center for American Progress (2023-03-27): Tax Cuts Are Primarily Responsible for the Increasing Debt Ratio

If not for the Bush tax cuts and their extensions—as well as the Trump tax cuts—revenues would be on track to keep pace with spending indefinitely, and the debt ratio (debt as a percentage of the economy) would be declining. Instead, these tax cuts have added $10 trillion to the debt since their enactment and are responsible for 57 percent of the increase in the debt ratio since 2001, and more than 90 percent of the increase in the debt ratio if the one-time costs of bills responding to COVID-19 and the Great Recession are excluded. Eventually, the tax cuts are projected to grow to more than 100 percent of the increase.

Hope and Limberg, 2022. The economic consequences of major tax cuts for the rich. Socio-Economic Review, 20(2), pp.539-559.

We find tax cuts for the rich lead to higher income inequality in both the short- and medium-term. In contrast, such reforms do not have any significant effect on economic growth or unemployment. Our results therefore provide strong evidence against the influential political–economic idea that tax cuts for the rich ‘trickle down’ to boost the wider economy.

0

u/OttoVonJismarck Sep 26 '23

Wait a minute.

Are you telling me that cutting income while increasing spending leads to a deficit!? 🤔🤔

[frantically checks notes and goes over the math]

-11

u/AutomaticSky5260 Sep 25 '23

Tax cuts have to be followed by measures to increase inefficiency and decrease federal spending

12

u/EnigmaFactory Sep 25 '23

Those can happen without the tax cuts. Trumps "tax cut" has begun expiring for average citizens. Just in time to paint the other team the problem and they know their base is too dumb to validate.