Is the economy weak or strong?
Published 8:30 pm Wednesday, August 21, 2019
According to Donald Trump, “Our economy is the best in the world, by far.” That is what he tweeted on Sunday, Aug. 18. “We have the lowest unemployment rate and, because of my trade deals, money is pouring in from overseas.” The stock market is at record highs and consumers are “loaded with cash.”
So, out of one side of his mouth, Trump talks about how “fantastic” the economy is with strong growth and clear sailing for the next two years. Only he, “the stable genius” with his HUGE tax cut, could have done it! But out of the other side, he says that the economy is weakening and that the FED should cut rates (it already has) and that maybe he might have to cut the payroll tax (FICA tax) to put more money in the hands of consumers.
Folks the payroll or FICA tax is what funds Social Security and a large portion of Medicare. Payroll tax cuts would pull billions of dollars away from these programs and also add dramatically to the federal deficit. The Republicans have never liked these two social safety net programs — they call them entitlements — and once the funding mechanism (the FICA tax) is breached the next thing we will hear is “We can’t afford these programs any more.” The tax that funded them has been cut so the programs must be slashed as well.
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In addition to potentially cutting payroll taxes, Mr. Trump told reporters that he was thinking about unilaterally reducing capital gains taxes. Such a move would largely benefit wealthy investors by reducing the amount of taxes owed on profitable sales of stocks, bonds and other investments.
A cut in the already low capital gains tax rate would be another HUGE gift to his wealthy supporters. And even more unbelievably, he is now talking about yet another corporate tax cut. The tax cut in late 2017 reduced corporate taxes from 35% to 21%, for a 40% reduction, and now he is talking about cutting it even more? The national debt is well over $22 trillion and headed higher — I remember when Republicans used to be against deficit spending — but that was when Democrats were in charge. Now it’s damn the torpedoes, open the spigots, spend the money whether we have it or not! As Dick Cheney once famously said, “Deficits don’t matter.”