The Unpleasant Impact of an Unserious Budget
Project on Taxation and Opportunity, Institute for Policy Studies
If you can get past the fuzzy math, Trump’s budget means certain pain for most families — and big tax cuts for the wealthiest few.
Federal budgets, while boring and wonky, can have a serious impact on our lives. They dictate our collective priorities for how we choose to spend our public resources in support of the common good. That is, good budgets do that. But you’d be hard-pressed to call the most recent budget from the Trump administration good.
To be clear, it’s hard to even refer to this budget as serious. Sure, it’s written in official-looking thick blue books, and it outlines spending figures using precise numbers. But that’s about where the formality ends. Tucked into the formal budget is a set of assumptions that present a fantastical approach to simple arithmetic.
Estate Tax Two-Step
Take the estate tax for just one example, also known as the inheritance tax. The estate tax is a pretty straightforward idea: a levy on the inter-generational transfer of immense wealth that only the very wealthy pay. It’s been on the books for about 100 years.
If left untouched, it will generate an estimated $174 billion over the next 10 years, precisely $0 of which will come from anyone who could reasonably be considered middle class.
The Trump budget proposes to eliminate the federal estate tax. Trump’s own family stands to benefit enormously from this gift to the wealthiest households.
The budget also proposes to dramatically cut federal student loan programs by about $143 billion. Notably, the Public Student Loan Forgiveness program is eliminated, a program that hundreds of thousands of graduates signed up for expecting their student loans to be eliminated after 10 years of service in the public sector.
Do the Math?
Trading a massive tax cut for the ultra-wealthy in exchange for massive cuts to programs that help young people go to college is bad enough. But then there’s the math.
The Trump budget, despite proposing to eliminate the estate tax, still counts the estate tax revenue as part of its revenue projection. In fact, the administration expects estate tax revenue to top $300 billion, nearly double the normal projection. This lie is critical to their absurd claim that their budget will balance.
News flash: If you cut taxes, it means you don’t get the revenue from said taxes.
Mathematical Menagerie
The estate tax double-count is just one of the many mystical components of their mathematical menagerie.
A poll of top-tier economists by the University of Chicago (which has among the most conservative econ departments in the country) found practically unanimous agreement that there’s no way the budget will balance. The administration’s assumptions are just too far-fetched — no matter how many times you spin in a circle, squint, and pray that the numbers on the page change.
Unfortunately, while the administration’s struggle with basic arithmetic can be amusing, the potential impact of this budget is far from humorous.
It will mean millions of families pushed off their health coverage, millions of mothers blocked from receiving nutritional assistance for their babies, and millions more families in our northern states forced to choose between heating their house and affording their groceries.
Long-time Rep. Barbara Lee of California put it well: “I have never seen a budget so devoid of compassion and empathy for families struggling to make ends meet,” she observed.
There appears to be no law barring Congress from enacting a budget with fundamentally bogus assumptions, and many of Trump’s supporters on Capitol Hill are happy to play ball. One hopes their constituents will be much less willing to go along with the morally bankrupt mathematical mess this administration calls a budget.
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Reposted from Our Future.
