Republicans have a “bitter pill” to swallow with their new spending bill that's making its way through Congress, according to Bloomberg Opinion Contributor Kathryn Anne Edwards — it will do exactly the opposite of what they promise.
Edwards wrote that, "regardless of Republicans’ commitment to tax cuts, higher taxes are coming.”
“For half a century, Republicans have been committed to the policy of lower taxes to aid the economy,” Edwards said, adding that the GOP have been unable to admit that tax cuts are “inefficient and prohibitively expensive.”
Edwards, who is a labor economist and independent policy consultant, noted that even with the small increase in economic output promised in the bill, massive tax cuts promised to the wealthy will “add so much to the national debt that the budget gains from higher output are wiped out by an additional $441 billion in interest payments.”
And that, she wrote, means tax increases will follow.
Citing the United States' near budget surplus at the turn of the millennium, Edwards broke down how the country’s debt ballooned to $37 trillion.
“Committee for a Responsible Federal Budget decomposed the increase in debt [since 2000],” she said. “Some 28% of the increase is due to legislation and programs enacted in response to recessions. Some 33% can be attributed to increases in spending. And the largest share — 37% — is due to tax cuts.”
“In other words, tax cuts are the single largest contributor to the increase in debt of the last quarter century,” Edwards said.
Quoting several polls, the independent policy consultant concluded the spending bill “has little public support,” she later added, “not even the majority of Republicans are in favor of it.”
Edwards added, “It’s particularly damning that support for the bill falls the more the respondent knows about its contents.
“The silver lining here, which will certainly be a bitter pill for Republicans, is that what is true of tax cuts is also true of tax increases: They have minimal economic consequences. The bonus is that tax increases are a way to address the debt.”
