Trumps corporate tax cuts blows-out US Budget deficit

By Leith van Onselen

While the Turnbull Government and the Business Council of Australia (BCA) continue to push the Senate to lower Australia’s company tax rate to 25% from 30%, the impact from the recent US corporate tax cuts continues to disappoint, sounding a warning signal for Australia’s senators.

After it was revealed last month that the US corporate tax cuts had missed workers and fuelled little more than a boom in share buybacks:

Now it has been revealed that the Trump Administration’s corporate tax cuts has helped send the US Budget deficit soaring:

The federal government recorded a budget deficit of $146.8 billion in May, helping push the total deficit so far this year 23 percent above the same period a year ago…

The Treasury Department reported Tuesday that the deficit for the first eight months of this budget year, which began on Oct. 1, totals $532.2 billion. That’s up by $99.4 billion from the $432.9 billion imbalance run up during the same period last year.

The deficit increase reflects in part the impact of the $1.5 trillion tax cut that President Donald Trump pushed through Congress in December.

The Congressional Budget Office is projecting that the deficit for this year will hit $804 billion, up $138 billion from last year’s deficit of $665.8 billion. And the CBO sees annual deficits rising past the $1 trillion mark under the impact of the 10-year tax cut passed last year…

It’s trickle-down nonsense to believe that cutting company taxes will benefit ordinary workers. Instead, they’ll be left paying off an even bigger Budget deficit.

Just look at the US situation and ask yourself whether you believe Australia should follow suit?

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Comments

  1. Hillary is to blame. She should have dropped out and Bernie Sanders would have won in a landslide. It would be America at its awesome best and not its Trumpian worst. Corporate Democrats should hang their heads in shame. However, the country (like Australia) is corrupt to the core and more pain awaits ordinary American citizens. Tragic to see a once great country in decline.

    • – Hillary to blame ? She and her (corporate) Democrats DID like the taxcuts as well.

      • That’s why he is blaming. A big part of Trump’s appeal is that he represented major change to power structures. Those who blame Hillary, believe Bernie would’ve brought the same energy and destruction of broken structures, but without the negative shit. I’ve no horse in this race, but I wouldn’t be surprised if Democrats lose midterms because they really did alienate a lot of voters by backing Hilary.

    • Bernie Sanders lost the primary by 3.7 million votes.

      He lost most of the open primaries, closed primaries, and swing states. He lost black, hispanic, LGBT, asian and older voters by huge margins.

      If it wasn’t for the undemocratic caucuses, he would have lost earlier.

      This was despite out spending the Clinton campaign and not having a single attack ad launched at him by the Clinton campaign (who wanted to woo his voters) or Republicans (who wanted to split the Democratic vote). There were even a number of Republican PACs funnelling money into his campaign.

      It turns out that outside the echo chamber of the internet, not even a majority of Democrats wanted to vote for a self-proclaimed socialist who had a vague platform of massive tax increases on the middle class to fund a massive expansion of government.

      • But polling data says Bernie would have smashed Trump.

        Actual votes show that left wing voters, in 2016, stayed at home compared to 2012.

      • bbagodicsGhost

        how could he lose with ‘Free shit for everyone’.
        Completely detached from reality but nothing like a politician how promises everything but can actually deliver nothing.
        Right up your alley eh Jacob – Unicorns and fairy tales with money raining from the sky, sprinkled down by marxists pixies

    • drsmithyMEMBER

      I don’t know about Bernie winning in a landslide. The paranoia about “socialism” in the US is deep and widespread.

      But Bernie v The Donald would certainly have been the most interesting and differentiated presidential campaign for a very, very long time.

  2. – Some 90% of the taxcuts in the US were beneficial for the corporate sector. The myth was that this would increase investments in e.g. new factories and hiring more workers. But when workers/employees only receive some 10% of the taxcuts then it won’t increase demand (too) much. Then why should companies build more factories and hire more workers when demand doesn’t increase ?

  3. StephenMEMBER

    The US is monetarily sovereign, so the deficit is not really much of a concern… The tragedy here is the huge increase in inequality this will cause – this just allows the wealthy to become even richer while the poor get poorer, which will make everyone worse off in the long run. Meanwhile, their Government continues to not reform their insane healthcare system, or education and the student loan racket, or anything like that…

    • The best way to ease inequality, now at a 70 year high, is to put in a UBI. And braindead Hillary regretted not having UBI in her manifesto:

      To finance the UBI, Clinton would’ve used fees for extracting oil and gas from public lands, or for broadcasters and mobile companies using airwaves, plus taxes on carbon and financial transactions.

      The idea is to eliminate poverty and reduce inequality, but also provide everyone a base level of unconditional material security. In terms of maximalist demands, a UBI might be bigger than a job guarantee, single-payer health care, baby bonds, or a universal child allowance. In both dollar size and sheer ambition, Sanders’ own push for a Medicare-for-all system pales in comparison.

      http://theweek.com/articles/724591/hillary-clinton-wouldve-won

      She should have put one in when Obama was president.