GOP/TRUMP ECONOMIC PLAN THAT REDUCED TAX RATES & INCREASED TAX REVENUE

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How could President Trump and a Republican House and Senate have possibly eliminated budget deficits and eventually the National Debt (which is what was projected)?  Few politicians explain this so I thought that I would.  Many are concerned that the U.S. is addicted to large deficits, which then are added to our huge National Debt ($32 trillion) at the end of each fiscal year. The economy is dynamic, not static,  therefore, when you change some things like reducing corporate taxes from the 35% to President Trump’s 21%, as well as reducing taxes on the working and the middle classes, this stimulates businesses in many ways, bringing back U.S. business and investment money to America and stimulating new businesses and the growth of existing businesses.  In addition, Trump repealed the individual mandate contained in Obamacare, which is the penalty that Obamacare imposed on those who chose not to be covered under it, estimated at $358 billion. Finally, there was about $3 trillion in U.S. corporate funds that resided in other countries, that a one-time repatriation tax rate of 15.5% on liquid assets and 8% on illiquid assets, returned to the United States and invested here (trillions have already been repatriated).

All of this resulting economic activity resulted in a huge increase in the Gross Domestic Product (GDP), which is a measure of the size of the U.S. economy.  The taxes from this huge growth, though the tax rates were reduced, resulted in tax revenues being vastly increased.  President Ronald Reagan did this in the 1980’s, as well as reduce regulations, and Gross Domestic Product (which measures the size of the economy) consequently almost doubled in size within 10 years from the time that Reagan’s tax rate cuts went into effect (1983).  President Kennedy also did this in the 1960’s.

GDP growth is an extremely important because, with 4% annual GDP growth, the United States can afford to do what needs to be done without having annual budget deficits (which are then added to the total national debt at the end of each fiscal year).

Because the Trump/GOP tax cuts became law, the United States economy (as measured by GDP) should more than double in 10 years from the date they were enacted (in the Tax Cuts and Jobs Act of 2017).

 

 

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