It doesn't take a rocket scientist to understand why the Republicans and Trump created a $1.5 trillion hole in the deficit with their tax cuts to their rich buddies. The idea came from Texas.

In 2005, the Republicans in Texas created a $27 billion deficit with their grand tax cuts for the business community. The Texas comptroller at the time warned lawmakers that the deficit will have to be addressed in the next legislation session.

Creating a hole in the budget was all part of the plan because it justified massive cuts to education and services. Texas, by law, requires a balanced budget, so, what better way to cut education than to create a massive debt then blame education?

So now with a newly created $1.5 trillion hole in the budget created by the Republican tax plan, look for massive cuts to Social Security, Medicare, education, environment protection, because "We can't afford it anymore."

It's a perfect plan. No place but Texa ... Washington.

John R. Cobarruvias

Clear Lake

Locations

(37) comments

Carlos Ponce

"newly created $1.5 trillion hole in the budget"

There's a hole in the budget, dear readers, dear readers
There's a hole in the budget, dear readers,
There's a hole.

Then we'll fix it dear John, dear John, dear John,
Then we'll fix it dear John, dear John, we'll fix it.

With what should we fix it, dear readers, dear readers,
With what should we fix it, dear readers, with what?

With a growing economy, dear John, dear John, dear John,
With a growing economy, dear John, dear John, with a growing economy!
(Note the CBO never accounts for a growing economy with reduced taxes. The CBO is often WRONG.)

Robert Braeking

FYI - John Maynard Keynes was wrong. 19th century economic models cannot apply to the 21st century. CBO is still living in the 19th century.

Emile Pope

The argument that tax cuts that balloon the deficit would be paid for by revenue from a growing economy has been proven to be GARBAGE by economists and history. And repeating the same garbage doesn't make it true...

Carlos Ponce

Not garbage, Emile. History and REAL economists beg to differ.

Gary Miller

Emile! Are you saying that if more people find jobs earning taxable income that Federal receipts will not increase? CBO never gets it right. Look at gov. income since second world war. That growth is all due to more workers earning more. Economists say it will only take 0.4 % growth to pay for the tax cuts. The economy has grown twice that much since Trump was elected. Economic growth is already paying for the tax cuts. Deficits have always been caused by spending growing faster than the economy.

Emile Pope

The tax cuts never pay for themselves. Never.

Jarvis Buckley

John please reference articles in which you talked of Obama's 8
Trillion dollar hole in our national
debt.

Emile Pope

Maybe you could reference where Bush and Reagan brought down the deficit...

Carlos Ponce

Study history, Emile, study history! The National debt did go up but why? Reagan made a deal with Tip O'Neil and the Democrats to reduce spending but the Dems did not, increasing the deficit. After a government shut down a compromise was achieved which included the sorely needed increase in in defense spending but also increases in domestic programs including Congressional pay.
The President produces a budget BUT it is Congress who allocates the spending. Spending Measures begin in the HOUSE of Representatives - Government 101.

Carlos Ponce

If the tax cuts were SOOOOOOO bad, why did President Obama extend them?????? Because they IMPROVE the economy. Problem was he did not extend ALL of them. Study the Obama extension of some of the Bush tax cuts while you're reviewing history. And before you bring up the 2008 recession, it had nothing to do with the tax cuts of 2001.

Emile Pope

The deficit went up because trickle down economics never has worked. And making up excuses doesn't change anything.

Emile Pope

And President Obama extended the tax cuts because he was being blackmailed by the Republicans. They told him that if he didn't extend tax cuts for the wealthy (he just wanted to keep the middle class tax cuts) they would not pass tax cuts for the middle class and would also eliminate programs that helped the middle class including unemployment insurance extensions. He totally opposed tax cuts for the rich. Garbage out, garbage outer...

Carlos Ponce

"And President Obama extended the tax cuts because he was being blackmailed by the Republicans." Nonsense. Obama (DEMOCRAT) had a DEMOCRAT Congress when this happened. Republicans did not have the numbers to have any influence.

Carlos Ponce

"The deficit went up because trickle down economics never has worked. And making up excuses doesn't change anything." You're the one making things up, Emile. Study history please, otherwise you sound like a...........[innocent]

Emile Pope

Garbage. "President Obama wanted to extend the tax cuts for taxpayers making less than $250,000 a year. Congressional Republicans agreed but also wanted to extend the tax cuts for those making over that amount.[15] Indeed, all 42 Republican senators joined in saying that, until the tax dispute was resolved, they would filibuster to prevent consideration of any other legislation, except for bills to fund the U.S. government"

Wiki

Carlos Ponce

Emile, believe what you want. With the economy in great shape, unemployment at all time lows for Blacks and Hispanics, overall jobs bringing in more take home pay, Isis (which emerged during the last administration) on the run, etc, etc, etc, your voice of discontent is growing faint.

Emile Pope

False Republican talking points with no basis in fact. Just like the Trump administration...

Gary Miller

Emile! Their deficits were caused by spending not tax cuts. Easy just compare tax income with gov. spending each year after the tax cuts. If there had been no increase in spending the budgets would have produced surpluses. The national debt would have been paid off and new tax cuts passed to reduce the surpluses tax cuts produced.

Emile Pope

Ridiculous argument. If the economic "growth" that the tax cuts were supposed to provide didn't cover the spending, then why have them in the first place?

Carlos Ponce

Emile, just sit back and watch. [beam] This is a good learning opportunity for you. But I suspect despite all evidence to the contrary you will still espouse the false Liberal economic dogma.[sad]
You can lead a Liberal to the land of prosperity but they will will never admit it.

Jim Forsythe

What is chained CPI? 
The new law indexes increases in tax brackets to the so-called “chained” consumer price index. That is a variant of the standard CPI that attempts to take into account changes in consumer buying habits in response to changing prices, rather than assuming that purchasing remains steady regardless of prices.
Proposals have been raised over time to use the chained CPI for a variety of programs in which payments are linked to inflation, including federal retirement benefits. Projections by CBO and others have shown that switching to that index would reduce the value of inflation adjustments on the order of a half percentage point each year.

“It’s a sneaky political move. It’s a hidden tax increase that will be invisible to voters,”
Cost-of-living adjustments are built into most of the federal budget and have been for decades. The theory is that as a dollar doesn’t stretch as far, taxpayers shouldn’t be asked to pony up as if it did — and the government needs to boost spending on benefit programs just to keep pace with consumers’ needs. This is why chained CPI is included in the new tax bill.

Compounds over time
What’s insidious about the chained CPI is that its effect is modest at first, but compounds over time. After 10 years the shortfall compared with the standard CPI is more than three percentage points; after 20 years, more than six. “Unlike proposals to repeal, say, itemized deductions,”  “people might not notice this hidden tax increase for years to come.”

"chained CPI" will be permanent and tax decrease will not.
Despite the individual cuts being temporary, Senate Republicans want to permanently switch to a new inflation measure, known as “chained CPI,” that will gradually bump middle-class families into higher tax brackets. That change alone will increase Americans’ taxes by $31 billion in 2027.

Tax rates will change until it reaches todays tax rate, plus the new chained CPI". 
Future members of Congress would face immense political pressure to renew the individual cuts when they expire at the end of 2025. But recent experience shows there’s no guarantee the cuts would be made permanent. Between 2009 and 2012, working families benefitted from a $400 per person tax credit followed by a payroll tax cut that provided about $1,500 to middle-class taxpayers. In 2011, now-Speaker Paul Ryan (R-Wis.) opposed extending the cut, saying it was a temporary provision that “simply exacerbates our debt problems.” Ryan added that temporary cuts “are proven not to work.” In 2013, Congress opened the new year by letting the payroll tax cut expire.

Reducing the value of  tax breaks, until it becomes a increases. 
 The new Republican-passed tax law deploys a new method of tracking inflation called the “chained” Consumer Price Index, a tool that will dampen future adjustments to federal tax brackets and standard deductions, reducing over time the value of touted tax breaks for individuals and companies.
This first-ever use of Chained CPI is viewed by guardians of social security, federal retirement plans, military retirement, veterans’ compensation and survivor benefits as worrisome. If the same method for measuring inflation is adopted widely, they contend, it would cut the lifetime value of most federal benefit plans.

Backdoor higher rates.
The use of the Chained CPI in the tax code will dampen inflation-based adjustments to income tax brackets, standard deductions and contributions employees can make to 401k plans.
That “means more and more money over time will be taxed at higher rates,” chipping away at the value of the tax breaks Republicans now tout.
“The Chained CPI has been an ongoing threat” to federal benefits “for a number of years so this continues if not heightens that concern,” 

Federal entitlements have been adjusted for inflation for decades using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The index tracks price changes for a market basket of goods and services bought by working-age Americans. For example, changes in CPI-W during the third quarter of 2017 versus the third quarter of 2016 justified the two percent cost-of-living adjustment (COLA) this month for social security and federal retired pay.

One example, of what will happen.12 percent less under Chained CPI
 Chained CPI would cut lifetime benefits for military retirees roughly five percent on average, with the sting felt more acutely in old age. An 85-year old enlisted retiree who left service at age 40 and received COLAs based on Chained CPI would be drawing an annuity worth about 12 percent less than if CPI-W protection is maintained, she said. That assumes Chained CPI reduces COLAs on average by .3 annually.

Switching from fixed-weight to chained CPI saves the federal government money. The Senate bill uses this money to offset the long-term costs of corporate tax cuts. But because the change is so subtle, many Americans will not realize that they are – in effect – being asked to pay from their own pockets to pad corporate profits.
Rather than addressing the problem of rising income inequality, the Senate bill manages to speed up that trend while covering its own tracks.

Kelly Naschke

Message to Jim.....if you can’t make your point in 500 words or less....you can’t make your point. Your copy and paste strategy and endless diatribes vaporize in the haze. Famous quote...”ain’t nobody got time fa dat”. But keep trying pal! You are helping sink the progressive ship.

Jim Forsythe

If you do not care about chained CPI, I understand. It is just a way to increase the amount that we pay, and still lower tax brackets. 
By 2025 most will be paying more taxes, by a hug amount . I'm not your pal.

Carlos Ponce

Jim, copying someone else's work off the internet is okay if you credit the author.
How about paraphrasing what you copied.

Kelly Naschke

Easy snowflake.....I didn't mean "pal" in the literal sense.

Jim Forsythe

Would you like the links?

Carlos Ponce

Links would be good but I would also like to read Jim's thoughts about what we're reading.

Jim Forsythe

 The new tax cut is nothing but taking money from one group , and give it to the other group. Using chained CPI, and increasing the percent of withholding of taxes, over the next few years is just a way to make it look good for the midterm elections. By  2025 they will blame it on the one's from 2018. The Republicans are depending on 7 years of unstainable growth. With the deporting of people, were are the worker's to make it happen, going to come from? If I'm a company, why would I want to bring back the money to the USA? Taxes have already been paid on it. With the passing of the new tax law, many companies will pay no tax in the USA .If that was the goal, why not change it to, no taxes on any company.


These are a few of the links I used , if you want the rest say so
http://www.faireconomy.org/trickle_down_economics_four_reasons

http://www.factandmyth.com/taxes/tax-decreases-do-not-increase-revenue

http://www.faireconomy.org/trickle_down_economics_four_reasons

The Key Spending Cuts and Increases in Trump’s Budget

https://en.wikipedia.org/wiki/Causes_of_the_Great_Recession

https://bernardgoldberg.com/bush-tax-cuts-caused-the-recession/

https://www.cbsnews.com/news/obama-signs-bill-to-extend-bush-tax-cuts/

http://www.latimes.com/business/hiltzik/la-fi-hiltzik-chained-cpi-tax-bill-20171121-story.html

https://www.salon.com/2017/12/07/the-tax-bill-would-make-chasm-between-rich-and-poor-wider_partner/

www.pnj.com/story/life/2018...

www.washingtontimes.com/new...

https://www.thebalance.com/trump-s-tax-plan-how-it-affects-you-4113968

TopTaxDefenders.com/Tax_Res...

https://www.investopedia.com/news/trumps-tax-reform-what-can-be-done/

https://townhall.com/tipsheet/guybenson/2017/11/28/no-the-gop-tax-plan-doesnt-raise-taxes-on-the-middle-class-in-a-few-years-n2414790

Carlos Ponce

Your list of sources is quite revealing - but not in a good way.

Jim Forsythe

What it reveals , is we do not use the same sources!

Carlos Ponce

You seem to use a lot of biased source material. I am referring to the authors of those sources. They are so far to the left they're miles outside the stadium.[beam]

Jim Forsythe

They are far to the left from the one's you use. Almost any author is.

Carlos Ponce

Jim, do you use Google? An investigation shows that they steer users away from any middle of the road or Conservative sources. But Google is not the only one.

Jim Forsythe

no

Jim Forsythe

Carlos, do you use Metasearch engines, Open source search engines or just the use ones such as, Tracker , Windows Search, X1 Desktop Search, Lookeen, Lookeen, ISYS Search Software, GNOME Storage, dtSearch Desktop, Foxfire, Chrome and a whole lot more?.

Carlos Ponce

I use Yahoo but filter through the Liberal websites they promote to find the truth.

Jim Forsythe

 The new tax cut is nothing but taking money from one group , and give it to the other group. Using chained CPI, and increasing the percent of withholding of taxes, over the next few years is just a way to make it look good for the midterm elections. By  2025 they will blame it on the one's from 2018. The Republicans are depending on 7 years of unstainable growth. With the deporting of people, were are the worker's to make it happen, going to come from? If I'm a company, why would I want to bring back the money to the USA? Taxes have already been paid on it. With the passing of the new tax law, many companies will pay no tax in the USA .If that was the goal, why not change it to, no taxes on any company.

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