Debunking Myths About Wealth and Race
It’s not individual behavior that drives the racial wealth divide — it’s a system that many folks pretend doesn’t exist.
Grand proclamations about slashing taxes and spending run afoul of basic arithmetic as well as basic fairness.
The political theater that passes for serious policy debate is about to run into an unfortunate reality as Donald Trump’s budget plan comes face to face with its arch-nemesis: arithmetic.
It’s impossible to cut taxes, increase spending, and balance the budget. That’s not political bluster. That’s math.
Throughout the campaign and since, Trump promised to invest in infrastructure, pass an enormous tax cut, boost military spending, cut “waste, fraud, and abuse,” and protect Social Security and Medicare — and, of course, balance the budget.
This rhetoric has been remarkably effective, the presidential equivalent of offering free ponies for everyone — but even less practical.
Working in Trump’s favor, however, is that many Americans believe things about the federal budget that are simply not true. There’s a lot of misinformation out there.
According to public opinion polls, Americans believe nearly a third of the budget goes to international aid. In reality, it’s less than 1 percent.
A survey of Fox News viewers from 2013 showed nearly half believed most federal debt could be eliminated by “cutting waste and fraud.” It can’t.
Out of a nearly $4 trillion annual federal budget, about $3.4 trillion is spent on things that either can’t be cut or Trump has promised he doesn’t want to cut. This includes Social Security, Medicare, military spending, and interest on the national debt.
That leaves just over half a trillion dollars to cover all non-military discretionary spending. It’s a lot of money, to be sure, but a small proportion of overall spending. This is the part Trump is proposing to cut. [pullquote]Trump’s tax plan is a middle finger to the working class. And his spending cuts represent his other hand making the same gesture.[/pullquote]
What’s included in this side of the budget?
To name just a few things: The benefits that help veterans get back on their feet after getting wounded. The nutrition assistance that helps babies born to low-income mothers. The science research that will mitigate the next infectious disease outbreak (remember Zika?).
The list could go on for paragraphs, each a small line item of a big budget, but each incredibly important to enabling a happy, healthy life in modern society.
Cutting programs the public depends on in an effort (real or imagined) to balance the budget isn’t new. Austerity has been in the air in the United States since Reagan and has taken Europe by storm, too. It’s the justification behind cutting programs that help the poor while passing tax cuts that exclusively benefit the rich.
It is, in short, part of a remarkably effective effort to redistribute wealth — upwards.
Consider, for example, Trump’s tax plan.
If the president were serious about balancing the budget, he’d be quite concerned about how much money the Internal Revenue Service collected each year. He’d know if that number went down, it would reduce the effectiveness of his spending cuts.
He is, to put it politely, not concerned about this.
As the Citizens for Tax Justice, a D.C.-based research group, points out, Trump’s tax plan nearly exclusively benefits the wealthy while raising the taxes of low- and moderate-income families. The budgetary impacts of his tax cuts total about a half trillion dollars a year — the same amount as the entire non-discretionary, non-military federal budget.
In other words, Trump’s tax plan is a proverbial one-handed middle finger to the working class. And his spending cuts represent his other hand making the same gesture.
While repeated rhetorical distractions may succeed in sidetracking his audience, Trump can’t use his impressive oratory skills to overcome basic mathematics.
Originally published by OtherWords.
Josh Hoxie directs the Project on Opportunity and Taxation at the Institute for Policy Studies and is co-editor of Inequality.org.