No matter how Republicans try to spin their tax plan, there is no evidence to suggest that if the government gives rich people more money, they’ll share it.
If the current crop of Republicans manage to get a tax bill to Trump’s desk that is anything close to the deficit- exploding one they’ve been pushing for months, get ready for budget cuts so deep that austerity is an understatement.
Rising interest rates, recession, and expanding income inequality will all be in play if Republicans succeed in passing a tax bill that adds $1.4 trillion to the deficit. And those are only the ‘side effects’ of this deliberate redistribution of wealth to the people with the most money. As Steve Benen writes on MaddowBlog,
The Republican tax plan is already a caricature of Montgomery Burns-style policymaking. We are, after all, talking about a proposal that would slash taxes on the richest Americans, give permanent tax breaks to big corporations, increase taxes on many in the middle class, and leave millions of vulnerable families without health security.
Republicans do a good job of getting too many Americans to believe that there is such a thing as trickle-down prosperity. There is not. They’re also pretty good at complaining about the federal deficit and debt, but only when they can turn around and use it as an excuse to cut the social safety net.
There are some universal truths about economics, whether Republicans choose to admit them or not. ‘Smaller government’ is not the solution to wage stagnation, income inequality, lack of opportunity, or any of the other serious issues American struggle with when they wake up every morning.
Although there are a multitude of variables that can lead to economic instability, the basics of supply, demand, and consumer confidence generally hold. If the economy heats up too quickly, that can cause inflation. The fed usually tries to slow inflation by raising interest rates. That makes just about everything more expensive. If wages don’t keep up, people spend less. That leads to layoffs as the economy contracts, which, in turn, creates a recession – defined as two consecutive quarters of decline in GDP. The length and depth of any recession often depends on what caused it and how the government responds. That’s because the way out of recession is to boost consumer spending. That’s often achieved by an increase in government spending, which is a problem when the government is running huge deficits under regressive tax policy.
The problem with conservative Republicanism and the wretched, reverse Robin Hood tax plan they’re trying to shove into law is that it ignores the part about how millions of people need to have money to spend if the economy is going to grow. So, even if all 540 of America’s billionaires went on a shopping spree, there simply aren’t enough of them to sustain America’s economy by themselves.
In reality, no matter how Republicans try to spin their fantasy economic plans, there is no evidence to suggest that if the government gives rich people more money, they’ll share it with anyone, be it trickle-down or in buckets. If that were the case, income inequality would not exist.