A Cautionary Observation
It is fashionable there days to let opinion dominate fact. The most obvious place that happens is in our Congress. I don’t usually object because gridlock and ineptitude rule and nothing much happens. That changed recently, when Congress desperate to prove they could do something, cobbled together a tax bill that, if enacted, hurts me personally. It turns out that it hurts most other New Jersyans also.
I’ll let others barrage you with facts. I’d like you to follow a simple logical exercise that examines the issue. It depends on whether you agree with someone else’s opinion. Einstein (the genius physicist, not the bagel guy) is supposed to have defined insanity as “doing the same thing over and over again and expecting different results.” I don’t know about you, but when I keep pushing the elevator button again and again and nothing happens, it makes me crazy.
If you agree with Einstein’s opinion, let’s examine a basic tenet of the proposed tax bill that gives 1.5 trillion dollars to the wealthy and pays for it from, among other things, reductions to Medicare and Medicaid, and screws New Jersey taxpayers by either eliminating or reducing deductions for taxes paid to Trenton. The belief that I speak of is that huge gifts to the wealthy “trickle down.”
I don’t rub shoulders with the proposed recipients of all the money they are supposed to let trickle down, but I haven’t noticed that they have a powerful urge to dispense their gains to people down the chain. David Stockman, President Reagan’s budget director, invented the trickle-down idea, but disavowed it a few years later when he realized it didn’t work. Reagan’s Tax Reform Act of 1986 reduced nominal rates on the wealthy and eliminated tax deductions, while raising tax rates on lower-income individuals. Sound familiar?
As it happened, government tax revenue plunged, and, over the course of his administration, Reagan had to raise taxes to take back half of the cuts so the country wouldn’t go bankrupt. There was no trickle down.
Economists refer to numerous other instances where reducing taxes resulted only in reduced revenue for the government. My favorite recent example occurred in Kansas, where Gov. Sam Brownback (great name for a GOP governor) persuaded his legislature to approve a large tax cut in 2012. The tax reductions he initiated not only failed to deliver the economic growth he promised, they blew huge holes in the state’s budget. Unpopular cuts had to be made in areas such as education spending, and the state’s economic expansion slowed to a, what’s the word…trickle.
Last June, in desperation, Kansas’s GOP legislature reversed Brownback’s cuts, hoping to revive the state’s economy. Fun Fact: when Brownback was a U.S. senator, Rep. Paul D. Ryan (R-Wis.) served as his legislative director. Yup, that Paul Ryan, now the speaker of the House taking credit for copying the Kansas plan gussied up as Trump’s tax plan. Small world.
Here’s my point. The “new” Republican tax plan follows a blue print that has failed time and time again. The authors promise that things will be different this time.
In our own interest, we’ve got to resist being hornswoggled by crazy people!
Rolf Margenau – Member of the Tewksbury Area Indivisible