Tags: tax reform | tax cut | trump | baby boomers | millennials

It's Not a Tax Cut — It's Generational Theft

Image: It's Not a Tax Cut — It's Generational Theft
(Drew Angerer/Getty Images)

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Monday, 02 October 2017 12:41 PM Current | Bio | Archive

Hey Baby Boomers — if you could stop stealing from my generation, we’d really appreciate it.

To be clear, I’m referring to President Trump’s tax-cut proposal. His proposal, if enacted, would increase the federal government deficit by trillions of dollars. Sure, the administration claims it’ll be revenue neutral, but there’s no way that’s true. The plan preserves popular — and expensive — deductions like the home mortgage interest deduction and the charitable deduction. It slashes corporate tax rates and taxes for the wealthiest Americans.

It offers no details on what loopholes it would close, deductions it would lose, or taxes it would raise to pay for everything.

So it’s simple math: taxing less + spending the same amount = massive deficit.

Sure, some people argue that the increased economic growth from tax cuts will make up the resulting deficit — this theory is known as the Laffer Curve — but even Republicans don’t really believe that anymore. The theory has simply been tried and failed too many times for anyone to reasonably think it’ll work this time.

To state the obvious, if we accumulate massive debt as a nation, someone has to pay the piper. And that is going to be all the generations after the Baby Boomers, as the Baby Boomers are rapidly reaching retirement and won’t be on the hook when the bills come due.

The costs of huge debt are very real, though:

In 2016, the federal government spent $223 billion just paying interest on our national debt. Not paying down the debt. Just the interest.

By 2026, interest payments on the national debt will make up one of the single biggest items in the federal budget, costing $712 billion a year. It will be about the same as defense spending, and higher than Medicaid, infrastructure, or education by a wide margin.

Historically, large deficits drive up interest rates, making it harder to take out a loan, start a business, and grow the economy.

The upshot is my generation will have to pay much higher taxes and will have less money for the things we’ll need in the future — like sophisticated defense, functioning education, homeland security, or fixing our crumbling infrastructure. Oh, and we’ll have to do it with anemic economic growth.

The insult to this injury is that the tax cuts won’t even help Baby Boomers all that much. Economic growth has been slow, but we’re at nearly full employment, so the economy doesn’t need a shot in the arm with a hangover later.

This isn’t to say that there aren’t a lot of people who are hurting. The coal miners who played such a central role in the 2016 election and the people who can’t move up in the world no matter how hard they work are suffering. But that’s not who will benefit from this tax cut. Stockholders and homeowners will.

It’s also not to say that some tax cuts wouldn’t help hardworking Americans who struggle to make ends meet. Reducing or ending the payroll tax, for instance, would increase employment and allow far more people to take home the money they’ve earned. But that’s not part of President Trump’s tax cut plan.

Still, the Baby Boomers should try to enjoy this tax cut — because their kids and grandkids will be crippled by it before long.

Yes, I’m a Millennial. Baby Boomers are welcome to call me a snowflake, or too sensitive, or a whiner, or whatever they have to tell themselves to discount everyone who points out the problems with what they’re doing.

But let me ask you this — who is more culpable? The person who complains when a burglar breaks into their house and steals their stuff, or the burglar himself?

President Trump’s tax plan is that burglar. So please, don’t pretend this is a tax cut, or tax reform. Please be honest about what it is — generational theft, plain and simple.

Neal Urwitz is the Director of External Relations at the Center for a New American Security (CNAS), a defense and national security think tank in Washington, D.C. He is an expert in media and congressional relations, having also worked for Fortune 500 companies on crisis communications and policy matters. He writes regular commentaries on the state of media in America. To read more of his reports, Click Here Now.

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NealUrwitz
Hey Baby Boomers — if you could stop stealing from my generation, we’d really appreciate it. To be clear, I’m referring to President Trump’s tax-cut proposal.
tax reform, tax cut, trump, baby boomers, millennials
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2017-41-02
Monday, 02 October 2017 12:41 PM
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