If you haven’t been bothered by Republican presidential front-runner Donald Trump’s xenophobia, misogyny, narcissism and bankruptcy-laden entrepreneurial past, you’ll likely find merit in the economic plan he unveiled earlier this week.
Voters in Kansas will recognize the arching philosophy behind Trump’s grand approach as the same trickle-down, supply-side economics being experimented with in the Sunflower State. Rapid growth only will come about via tax cuts.
“We’re going to have growth that will be tremendous,” Trump said at a press conference Monday.
In fact, using so-called dynamic scoring, Trump estimates that growth of the Gross Domestic Product will be 6 percent over the next 10 years. That would be tremendous.
The real estate mogul believes the corporate tax rate needs to be reduced from 35 percent to 15 percent. This would take the developed world’s highest-taxing country now to one of the most competitive.
Trump also would eliminate the estate tax and reduce income taxes by roughly 20 percent. After-tax income would be affected in predictable fashion with the lowest tax brackets receiving the least and the highest receiving the most.
It never grows old. Ronald Reagan pushed the Arthur Laffer-inspired model. So did George W. Bush. In both cases, growth was achieved but the desired trickle never made it down to ordinary people. Deficits and debt, in the meantime, soared.
Former President George H.W. Bush called the approach “voodoo economics” until he joined the Reagan team.
It is voodoo. Trump doesn’t tout it, but even the conservative Tax Foundation acknowledges his plan will add more than $10 trillion to the national debt. Its conclusion ends with: ”Finally, it is worth noting that the Taxes and Growth Model does not take into account the fiscal or economic effects of interest on debt. It also does not require budgets to balance over the long term. It also does not account for the potential macroeconomic effects of any spending cuts that may be required to finance the plan.”
As we said, this sounds eerily similar to Kansas Gov. Sam Brownback’s “shot of adrenaline.” And the little-hyped deficit spending that’s hidden behind borrowed money and maximized lines of credit.
Such an approach worked for Brownback’s election efforts. Twice, in fact. We’re guessing it will work for Trump, too.
Editorial by Patrick Lowry