As the U.S. Senate inches closer to a series of sweeping reforms to the tax code, a former White House adviser to President Ronald Regan and a Treasury official under President George H.W. Bush says the plan is bad for the economy and will only serve for political gain.
Bruce Bartlett, an economist and author from Virginia who worked under Regan and Bush, told Pure Politics this week that the main reason the Senate tax reform plan is bad, is because it will add to the deficit by a staggering $1.4 trillion.
The $1.44 trillion figure comes from the non-partisan Congressional Budget Office, which found that enacting the White House-backed Tax Cuts and Jobs Act would lead to the massive deficit among other hardships.
“…At a time when taxes are low, the economy is in good shape and there’s absolutely no justification for doing anything,” Bartlett said. “In fact, I would say it’s simply a lie to call it tax reform in any way shape or form. It’s just a giveaway to the Republican donor base and that’s about it.”
The GOP tax bill in the Senate sharply reduces the corporate tax rate and reconfigures the system under which multinational corporations pay taxes to the United States government. It also reduces the tax rate for individuals while eliminating some deductions, including those for state and local taxes, and allows non corporate businesses an additional deduction.
The corporate changes would be permanent, but individual cuts and so-called pass-through businesses would expire at the end of 2025.
U.S. Senate Majority Leader Mitch McConnell, R-Kentucky, and other Republican leaders are trying hard to pass the tax cut, but Bartlett says there are ulterior motives at play.
“It’s the first step in implementing the Republican strategy of strangling the government,” he said.
Essentially, Bartlett said once the cuts are enacted and the deficit begins to balloon then deficit hawks will begin calling for reductions to Social Security and Medicare.
“I think (Republicans) know in their heart of hearts that their hold on power is going like the sands in an hour glass and they want to make sure Democrats hands are completely tied once they get back in power, and are forced to spend all of their time on unpopular deficit reduction measures.”