Hello John, Brace yourself. You’ll soon be hearing an onslaught of complaints about renewing the Trump tax cuts. It’ll be the same tired chorus of “tax cuts for the rich” and other grievances meant to make us feel sorry for the government. (Good luck with that!) Why does the conversation always seem to be about whether the taxpayer is paying too little and never about whether the government is taking too much and doing too much? When thinking about taxes, there are lots of questions we need to ask: - How much is enough?
- Would you spend your money more effectively than Washington politicians?
- How do taxes affect work, saving, and investing — the pillars of economic growth?
Recently, I saw a podcast featuring Patrick Fleenor, a tax policy fellow at AFP and an expert on tax policy. Growing up in the Detroit area in the 1970s and 1980s, he’s seen the damage bad tax policy can do. I asked Patrick if the Trump tax cuts were for the rich. He responded: The Trump tax cuts were the best tax legislation in the past 100 years. They were NOT tax cuts for the rich; they benefited everyone. Why? Because they made it easier to save and invest, which leads to greater productivity and economic growth. An example: I talked to a mechanic who explained how his tools were his livelihood. Because of the Trump tax code, he wrote off the entire cost of his tools. That means he can buy more and better tools, which makes him more productive. That not only increases his income but also gives his customers better service — a win for everyone. So don’t let anyone tell you that you’re being “greedy” for supporting lower taxes. Let’s break down why. On the question of whether Americans pay enough in taxes, Patrick told me to just look at the historical record: - “Federal revenues were 17.2% of the overall economy [or GDP] in 2024, which is right at the 30-year historical average of 17.3%.” That’s according to the Congressional Budget Office.
Overall, Americans are paying in taxes about what they’ve paid for decades. So why are deficits so high? Patrick explained: “While tax revenues have remained steady, spending is another story. The 30-year average for spending is about 21% of the economy. But in 2024, spending was a whopping 24.2% of GDP.” In fact, the CBO estimates that in 10 years, spending will be nearly 25% of the overall economy — a quarter! Is there an argument for letting the Trump tax cuts expire? Patrick put it this way: Politicians have been spending like crazy for decades, and now that they’ve run up a huge debt, they want workers to bail them out. If Congress lets the Trump tax cuts expire, it would amount to a $4 trillion bailout for the progressive politicians who created this mess. It’s critical that Congress renew Trump’s tax cuts to reduce the cost, size, and power of the federal government. The bottom line: Americans have had to tighten their belts for years; now it should be the government’s turn. Go deeper: AFP’s grassroots army is fired up to Protect Prosperity for families like yours — but we can’t do it without you. The Trump tax cuts are on the line, and your voice matters. Want to help keep more money in your pocket? Learn more at ProtectProsperity.com. |