If you need to know anything about Trump's tax plan and its effect on our country (and the 2020 election), you need to know these three facts:
1. Those $1000 Bonuses From Large Corporations Aren't Good News
Following the passage of Trump's tax reform, corporations including Wells Fargo, Boeing and Comcast announced they would be giving $1000 bonuses to thousands of their employees. While this sounds like a Robin Hood situation, it instead glorifies Trump and does nothing to keep the rich from getting richer. [Washington Post]
2. The Wealthy Will Benefit Greatly, Including Trump
This tax reform plan destroys many of the regulations that keep businessmen like Trump in check. For example, the plan will eliminate the estate tax, which only affects a few "uber-wealthy" families per year. It would also eliminate the alternative minimum tax, which was created to prevent tax avoidance. The alternative minimum tax has not been so kind to Donald Trump. It forced him to pay $31 million in additional taxes in 2005 when he was caught not paying his taxes. While Trump pledged this tax plan would reduce the taxes of middle class families, it is possible that some households would probably get tax cuts, but other could end up paying more. [The New York Times]
3. The Economy Might Benefit Short Term, But Long Term, Things Do Not Look Promising (For Trump, That Is)
As reported in USA Today, "the Republican tax-cut package unveiled...[will] give the U.S. economy a big sugar-high next year, but the inevitable comedown is likely to follow," economists said. The reform will boost consumer spending and business investments short term, but with the economy at full employment (thanks, Obama), it will also strain the economy's capacity to respond to the surge in activity. Due to the unemployment rate dropping significantly post-Obama administration, the economy does not need any "fiscal stimulus." According to CNN; this could be too much of a good thing for the economy. Not only could it create a bubble in the stock market, but it leaves Washington with little to boost the economy if it falls in the future.This will lead the Fed to raise interest rates, discouraging Americans from purchasing homes and businesses from borrowing money. The plan will also add to the nation's debt, slashing federal revenue by $2.4 million over 10 years. The radical nature of Trump's tax plan is a threat to America's economy.
However, considering all the damage this plan will do to our country, there is one upside:This plan will put a Democrat back in the White House in 2020.
Comparing the 2020 election to that of 2008, the Democrats won following eight years of George W. Bush, who, like Trump, issued a tax bill giving tax cuts to the rich.
In 2008, after wealthy Americans received that tax break, the economy crashed. Donald Trump might be sending the country into another recession and the American voting population will almost always punish the incumbent, especially considering the sitting president’s approval rating at the end of their term.
Considering George W. Bush’s approval rating at the end of his term, only 34%, and Trump’s current approval rating at 35%, 2020 may eerily mirror the 2008 presidential election.
Because of the overwhelming amount of factors, the Democrats can redeem themselves in the 2020 presidential election if Donald Trump continues down the path that George W. Bush tread in his first term.
