News Journal; The Republican tax cut is a deficit-exploding bust, and America knows it

I’m not claiming cause and effect, but there may be a sad connection between the general reaction to Speaker Paul Ryan’s Feb. 4 tweet and his retirement announcement last month.
Speaker Ryan has devoted his entire 18-year career in the House of Representatives to making significant changes in the tax code. The massive tax cut President Trump signed into law last December was viewed at the time as the crowning achievement of Ryan’s career.
And then came his tweet: “A secretary at a public high school in Lancaster, PA, said she was pleasantly surprised her pay went up $1.50 a week … she said (that) will more than cover her Costco membership for the year.”
Twitter went wild with mocking responses, and Ryan deleted the tweet soon after. It had exposed his tax reform bill for what it actually delivered: a buck and a half for middle-class taxpayers compared to billions for corporations and millionaires. Rumors of his retirement soon went viral.
The ramifications of the tax cut Ryan championed are becoming clearer to more Americans every day.

The Congressional Budget Office normally publishes its report on the budget and its 10-year economic outlook every January. It waited until April this year so it would be able to analyze the effects of the 2017 tax act.
Its three major conclusions:
“Over the next decade the gap between outlays and revenues is projected to be persistently large.” “The imbalance would cause federal debt held by the public to rise to nearly 100 percent of GDP.”
“The growth of GDP is projected to be relatively strong this year and next and then to moderate.”
Those conclusions, coming from what I and many others consider to be the gold standard of budget forecasters, directly challenge the claims of the supporters of the tax act that cutting taxes on the rich would so stimulate growth that it would not lead to an increase in our deficits and debt.
You really have to wonder how many times the same snake oil can be sold, when it has never worked in the past. The major tax cut bills passed under President Reagan and George W. Bush led to huge budget deficits. The only budget surpluses in recent history occurred in the late 1990s, after tax increases passed under Presidents George H.W. Bush and Clinton.
We are seeing the direct results of a bill written totally behind closed doors, without open or bipartisan hearings, but with plenty of input from bank and corporate lobbyists.
Just one example: The Associated Press just reported that the six major U.S. banks announced savings of $3.6 billion in the first three months of this year, all due to the tax act. Before the act, banks paid between 28 and 31 percent of their income in corporate taxes. That is now down to between 17 and 24 percent.
Statistics like that are hard to reconcile with the final commercial of the Trump campaign in 2016, in which he promised to go after the “global power structure that is responsible for the economic decisions that have robbed our working class, stripped our country of its wealth, and put its money into a handful of large corporations and political entities.”
Back in December, Republicans were planning on campaigning in 2018 on how great the tax cut was for ordinary Americans. Tax cuts are always popular, right?
Not this one. In fact, the Republican candidate in the special congressional election in Pennsylvania pulled the ads about the tax cut shortly before he lost in a district that Trump has won by 21 percent.
A recent NBC/Wall Street Journal poll shows that just 27 percent of Americans call the tax cut a good idea while 36 percent call it a bad idea. Fifty-three percent believe there will be a negative impact from higher deficits and the disproportionate benefits for big corporations and the wealthy.
If the CBO is right, which it usually is, and we are facing debt levels that approach 100 percent of GDP, there is no way we can safely allow the tax act of 2017 to stand. Look for a lot of Congressional action to repeal and replace it after the November elections.

Ted Kaufman is a former U S Senator from
Delaware