House GOP Budget Picture Starts to Develop: Increased Overall Spending & $2,500,000,000,000 in Additional Debt

[essentialsaltes]

House GOP nears plan for Trump’s agenda — but may not have the votes​

Republicans will attempt a tax and spending bill that will not require substantial budget cuts, but there may be serious math problems ahead.

GOP leadership earlier this week unveiled a plan to lawmakers that will cut $315 billion in spending over 10 years, but will add another $325 billion in spending on Trump’s national security and immigration crackdown, said the people, who spoke on the condition of anonymity to discuss private briefings.

Major portions of Trump’s 2017 tax cut — which lowered rates for businesses and all income brackets but concentrated benefits among the most wealthy — are set to expire at the end of the year. The House GOP plans to extend those provisions and add other business tax incentives, at a cost of $5.5 trillion over a decade.

[Speaker] Johnson laid out this framework during closed-door meetings at the GOP’s policy retreat this week at Trump’s Doral, Florida, golf resort.

The details are not finalized, the people said, and may change as lawmakers offer feedback.

The House Energy and Commerce Committee was assigned the most cost-cutting, two of the people said, at $200 billion. Much of that can be accomplished by imposing work requirements on enrollees for Medicaid

The Agriculture Committee, assigned to slash $50 billion, is eyeing limiting future expansion of food stamp benefits

It’s not clear how [or whether] the House’s blueprint accounts for some of Trump’s other campaign promises, including ending taxes on tips, overtime wages and Social Security benefits, which would add $3.6 trillion to the national debt over 10 years

 

[iluvatar5150]

Waiting for all the deficit hawks to complain about how we can’t afford any of this…

 

[BCP1928]

Waiting for all the deficit hawks to complain about how we can’t afford any of this…

There are no defecit hawks. The question is, and always has been, who gets the money?

 

[Pommer]

There are no defecit hawks. The question is, and always has been, who gets the money?

This is like 83% of politics, yes.

 

[Vambram]

Increasing tax rates never guarantees an increase with federal government revenue because raising tax rates almost invariably slows economic growth in the GDP. On the other hand, every time in modern history, lowering federal tax rates causes good economic growth and therefore history shows increases in total federal government revenue raised and collected.

 

[iluvatar5150]

Increasing tax rates never guarantees an increase with federal government revenue because raising tax rates almost invariably slows economic growth in the GDP. On the other hand, every time in modern history, lowering federal tax rates causes good economic growth and therefore history shows increases in total federal government revenue raised and collected.

lol, this is not at all true. Yes, tax increases slow economic growth and tax cuts increase growth, but, at least in modern history, there hasn't been enough resulting change in growth to counteract the effects of the tax rate changes (in either direction). If you've seen revenues increase after tax cuts, it's been in spite of those cuts, not due to them. With a growing population and a growing economy (i.e. positive GDP), revenues are going to increase year-to-year on their own.

What you're arguing is, essentially, the Laffer Curve, which isn't untrue per se, but life is more complicated than that. But even if life weren't more complicated than that and Laffer was spot on, the theory says that revenues only fall if your new tax rate puts you on the right side of the curve. If you stay on the left side of the curve (i.e. the green area in this graph), then tax hikes result in more revenue, not less. Conservatives have seemingly missed these obvious prediction of their pet theory, or they just don't care and use it as a pretext for lowering taxes that they don't like, hoping their constituents failed at junior high math.

 

[Vambram]

lol, this is not at all true. Yes, tax increases slow economic growth and tax cuts increase growth, but, at least in modern history, there hasn't been enough resulting change in growth to counteract the effects of the tax rate changes (in either direction). If you've seen revenues increase after tax cuts, it's been in spite of those cuts, not due to them. With a growing population and a growing economy (i.e. positive GDP), revenues are going to increase year-to-year on their own.

What you're arguing is, essentially, the Laffer Curve, which isn't untrue per se, but life is more complicated than that. But even if life weren't more complicated than that and Laffer was spot on, the theory says that revenues only fall if your new tax rate puts you on the right side of the curve. If you stay on the left side of the curve (i.e. the green area in this graph), then tax hikes result in more revenue, not less. Conservatives have seemingly missed these obvious prediction of their pet theory, or they just don't care and use it as a pretext for lowering taxes that they don't like, hoping their constituents failed at junior high math.

View attachment 360577

What numbers and percentages are in the details of The Laffer Curve?

 

[iluvatar5150]

What numbers and percentages are in the details of The Laffer Curve?

The x-axis is the effective tax rate. But otherwise, it doesn't matter. It just describes a (very hypothetical, idealized) trend.

 

[Vambram]

The x-axis is the effective tax rate. But otherwise, it doesn't matter. It just describes a (very hypothetical, idealized) trend.

Do you acknowledge that, in modern history, federal government revenue increases every year even when individuals and corporate tax rates are lowered?

 

[iluvatar5150]

Do you acknowledge that, in modern history, federal government revenue increases every year even when individuals and corporate tax rates are lowered?

Revenues generally increase as long as gdp increases, regardless of tax rates.

Federal government current tax receipts

Graph and download economic data for Federal government current tax receipts (W006RC1Q027SBEA) from Q1 1947 to Q4 2024 about receipts, tax, federal, government, GDP, and USA.

fred.stlouisfed.org

The only time revenues really fall is during/after a recession, or during the post-covid rebound.

 

[Hans Blaster]

What numbers and percentages are in the details of The Laffer Curve?

There aren't any and there never were. That's the point. Laffer's Curve is worth the same as the napkin it was written on.

 

[Vambram]

Revenues generally increase as long as gdp increases, regardless of tax rates.

Federal government current tax receipts

Graph and download economic data for Federal government current tax receipts (W006RC1Q027SBEA) from Q1 1947 to Q4 2024 about receipts, tax, federal, government, GDP, and USA.

fred.stlouisfed.org

The only time revenues really fall is during/after a recession, or during the post-covid rebound.

Therefore, since the GDP generally does increase, then lower income tax rates for everyone is good for all individuals and also good for our economy, the GDP, and for increasing federal government revenues. This is a win/win for everyone.

 

[RileyG]

Will our debt ever get to 0?

SMH

 

[RileyG]

Increasing tax rates never guarantees an increase with federal government revenue because raising tax rates almost invariably slows economic growth in the GDP. On the other hand, every time in modern history, lowering federal tax rates causes good economic growth and therefore history shows increases in total federal government revenue raised and collected.

Thanks for the info!

 

[Vambram]

Will our debt ever get to 0?

SMH

I doubt it.

 

[Aryeh Jay]

Will our debt ever get to 0?

SMH

Just like with credit cards, it's easy to run up debt. Not so easy to pay it off.

 

[RileyG]

Just like with credit cards, it's easy to run up debt. Not so easy to pay it off.

Absolutely! Something I learned the hard way in my early 20s

 

[iluvatar5150]

Therefore, since the GDP generally does increase, then lower income tax rates for everyone is good for all individuals and also good for our economy, the GDP, and for increasing federal government revenues. This is a win/win for everyone.

Every time discussions go in this direction, I'm reminded of this scene from The Shawshank Redemption:

No, for the third time, lowering taxes is not "good... for increasing federal government revenues."

There isn't really any argument. You're just wrong.

Thanks for the info!

lol, what info? "Trickle down economics" theory that hasn't worked as advertised in the 40+ years it's been tried?

 

[RileyG]

Every time discussions go in this direction, I'm reminded of this scene from The Shawshank Redemption:

No, for the third time, lowering taxes is not "good... for increasing federal government revenues."

There isn't really any argument. You're just wrong.



lol, what info? "Trickle down economics" theory that hasn't worked as advertised in the 40+ years it's been tried?

Hey! I'm always learning

 

[Pommer]

2025 and we’re still debating trickle-down economics?
Sure, why not!?