There are a lot of numbers that get thrown about during an Election Year. They are usually pipe dreams not rooted in reality. Most often, few of these numbers come to fruition. Those that do, are typically different from the initial campaign promise. And, considerably off the mark.
The numbers that get tossed around focus on deficit additions or cuts. These are typically from new programs, or enhancements to existing ones. American voters do their best to listen to the numbers, but few focus on the ones that matters most to them. Tax proposals.
Here’s why 2020 tax figures matter more than they have in a while. In fact, the subject of taxation hasn’t been this much in focus in a presidential election since Bush v Kerry in 2004. Remember the Bush tax cuts.
Trump has lowered tax rates for everyone, and it’s not a secret that the marginal benefit impacted major corporations and high income earners more than anyone else. Well, this is to be expected. The highest income earners will see the largest impact when their rates are cut. While the Trump administration didn’t advertise the cuts as trickle down economics, like Bush did, the concept was quite apparent.
The results demonstrate the cuts worked, and in particular, helped American businesses. The cuts were overly generous to high income earners, such as, the vilified one percent when compared with average Americans. In short, the cuts should have been more impactful for those making less than $250,000/year, but it seems this was always the strategy.
A deal maker saves his best card for last. You never show your hand, and the ace in Trump’s pocket is a tax cut proposal for the average American. It will likely prove to be the defining issue of 2020, and it’s difficult to think that Americans would vote down more money.
Here’s what will happen. Examine the tax proposals from every Democrat candidate for president. The situation is obvious. Taxes are going up. Now, taxes aren’t necessarily going up for the average household, with the lone exception being candidates like Sanders and Warren who have acknowledged that their Medicare For All plans will raise taxes for most everyone.
Trump will campaign to keep taxes low, or nonexistent. This means the numbers in parentheses on the left side of the above chart will remain intact. Trump will then propose to all Americans a slashing of tax rates for the lower income earners. The contrast will be clear. One side is supporting the raising of taxes, with the false hope that businesses and investors will continue to thrive. The other side will keep taxes low, and lower them further for voters.
The additional problem with the proposals from the left are the new additions such as the carbon tax, financial transactions tax, and the likely unconstitutional wealth tax. The increase in the corporate tax is one of the most unwise decisions any voter could support. But, the drastic increase in the investment income tax is disastrous. To up this tax from 20% to nearly 40% is catastrophic. Why? It will essentially strip off an alarming amount of returns from one’s successful investment in the stock market. Why would an investor be motivated to buy and sell stock if 40% of their potential profit would be forgone to the IRS.
The answer is quite clear. Do you want to vote for a government to take more money from those contributing to the economy? And if you do, why? Government taxes essentially every aspect of one’s life, yet still runs with a massive deficit, and an overall debt that’s ballooned to over $20 trillion. It doesn’t make any sense that the American public should entrust their elected officials with taking more of their hard-earned money. Governments from both parties have proven they are incapable of managing the money we send them. They have shown they waste the money in a wildly inefficient manner.
Americans should seriously take the numbers being presented to them with regard to taxation. They should question the addition of new programs being touted by any party. Companies, large and small operate to earn a profit. Governments should be expected to do the same. Households are expected operate in a profitable manner year after year. If not, they can’t afford to provide for their loved ones. Government should be treated the same way. Americans need to strongly consider tax figures when they decide to vote for a candidate. These numbers matter.