{"id":2326529,"date":"2024-08-19T00:59:01","date_gmt":"2024-08-19T04:59:01","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/why-republicans-should-cut-spending-to-extend-their-tax-cuts\/"},"modified":"2024-08-19T01:05:16","modified_gmt":"2024-08-19T05:05:16","slug":"why-republicans-should-cut-spending-to-extend-their-tax-cuts","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/why-republicans-should-cut-spending-to-extend-their-tax-cuts\/","title":{"rendered":"Why Republicans Should Cut Spending To Extend Their Tax Cuts"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">20<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fwhy-republicans-should-cut-spending-to-extend-their-tax-cuts%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2326529&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>The article discusses the relevance of <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/milton-friedmans-revenge\/\" title=\"Milton Friedman\u2019s Revenge\">supply-side economics<\/a>, particularly in the context of\u200b ongoing debates about \u200bconservatism since 2016 and the impending expiration of major components of\u200c the 2017 Tax Cuts and Jobs Act. Supply-side economics, which aims to stimulate economic growth by optimizing tax rates rather than merely redistributing wealth, is rooted in the\u2062 idea that lower tax rates can lead to \u2064increased government revenue by fostering \u2064growth. This \u200bconcept was popularized\u200b by economist\u2064 Arthur Laffer and has been reflected in policies instituted during Donald Trump&#8217;s presidency, which reportedly contributed \u2063to economic growth \u200dand rising incomes.<\/p>\n<p>However, the piece critiques supply-side\u200b economics for neglecting the importance of government spending \u2063controls. It argues that focusing exclusively on \u2062tax cuts can inadvertently encourage higher government spending without addressing budget deficits. The discussion references a\u200d Wall Street Journal op-ed \u200bthat underscores the success of \u200cthe 2017\u200b tax reforms while also revealing concerns about their long-term sustainability without \u2064bipartisan support or continued Republican control. <\/p>\n<p>The author asserts that under current budget reconciliation rules, Republicans could make the tax cuts permanent\u200b if they simultaneously cut government spending. \u2064The\u200c article emphasizes that there are substantial opportunities for lawmakers \u200cto reduce expenditures, particularly\u200c by reversing recent spending \u2064associated with <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/bidens-top-energy-regulator-previously-lobbied-for-offshore-wind-farm-approved-by-administration\/\" title=\"Biden&#039;s Top Energy Regulator Previously Lobbied for Offshore Wind Farm Approved by Administration\">green energy initiatives<\/a>. Despite these potential\u2062 savings, some Republican politicians appear hesitant to pursue spending\u200d cuts, complicating the path to sustainable tax reforms.  <\/p>\n<p class=\"readmore\">\n    <button onclick=\"showReadMore()\" id=\"readmorebtn\">Read more&#8230;<\/button>\n<\/p>\n<hr id=\"line\">\n<span id=\"more\"><\/p>\n<div>\n<p>Whither supply-side economics? Given debates since 2016 about the meaning of conservatism, those on the right might wish to assess whether and to what extent a philosophy that rose with Ronald Reagan remains relevant nearly half a century later.<\/p>\n<p>The discussion seems particularly timely given that major portions of the 2017 Tax Cuts and Jobs Act will expire next year. The slowly developing debate over the tax bill reveals both the strengths and weaknesses of the supply-side approach: It can yield economic growth &mdash; but it gives politicians an excuse not to reduce government spending.<\/p>\n<h2><strong>The &lsquo;Laffer Curve&rsquo; and the &lsquo;Trump Boom<\/strong>&lsquo;<\/h2>\n<p>Broadly speaking, supply-siders focus on increasing economic growth by optimizing tax rates. Put another way, rather than following the left&rsquo;s obsession with the right way to divvy up the economic pie &mdash; which presupposes a zero-sum game in which some must lose for others to win &mdash; they focus on expanding the size of the pie, such that everyone, both individuals and the federal government, obtain a bigger slice.<\/p>\n<p>The notion that lowering tax rates can yield more tax intake by generating new economic growth came via economist Arthur Laffer and his famous curve. Donald Trump&rsquo;s 2017 tax package generally followed this blueprint, resulting in significant economic growth and <a href=\"https:\/\/thefederalist.com\/2020\/09\/22\/census-report-shows-how-jaw-dropping-trumps-economy-was-before-shutdowns\/\" target=\"_blank\" rel=\"noreferrer noopener\">rising incomes<\/a> &mdash; particularly for women, members of ethnic minority groups, and foreign-born workers.<\/p>\n<p>Of course, not all tax reductions result in the same amount of economic growth, nor do they all &ldquo;pay for themselves&rdquo; by generating revenue. If they did, the federal government could maximize its revenue by lowering tax rates to 1 percent. (Don&rsquo;t hold your breath waiting for that to happen.) But the general concept remains solid: Properly targeted tax relief can benefit economic growth and offset declines in government revenues.<\/p>\n<h2>Supply Siders Ignore Spending<\/h2>\n<p>The problem with this philosophy comes not with what supply-siders are saying but with what they aren&rsquo;t. By focusing solely on the revenue side of the equation as the way to generate economic growth, they give politicians a reason to ignore the other side of the ledger and maintain destructive levels of government spending.<\/p>\n<p>Consider a recent Wall Street Journal <a href=\"https:\/\/www.wsj.com\/articles\/if-republicans-dont-win-get-ready-for-a-tax-hike-tcja-expire-ea91892d\" target=\"_blank\" rel=\"noreferrer noopener\">op-ed<\/a> by Mike Pence and Pat Toomey discussing the 2017 tax law. Most of the article discussed its positive effects, making the case for pro-growth policies in much the same way I did above, with more specific examples and data about the effects of the Trump policies. But the article&rsquo;s concluding paragraph hit a disconcerting note for policy experts reading between the lines:<\/p>\n<blockquote>\n<p>The [Tax Cuts and Jobs Act] was the most successful tax reform in at least 30 years. Ideally, Democrats would join with Republicans to make all of it permanent. If not, we&rsquo;ll have to rely on a Republican sweep in November &mdash; and Republican unity next year &mdash; to <em><strong>extend it for as long as possible<\/strong><\/em>. (Emphasis added.)<\/p>\n<\/blockquote>\n<p>To make the subtle wording more explicit: Pence and Toomey argue that either 1) a bipartisan coalition of lawmakers should make the law permanent, using 60 votes to overcome a Senate filibuster, or 2) assuming Republicans win unified control of Congress in November, they should pass an extension via budget reconciliation with 51 Senate Republican votes, even though reconciliation limits mean Republicans cannot make the law permanent, and will have to settle for &ldquo;extend[ing] it for as long as possible.&rdquo;<\/p>\n<p>That is an entirely false premise. The <a href=\"http:\/\/thefederalist.com\/2017\/05\/11\/need-know-budget-reconciliation-senate\/\" target=\"_blank\" rel=\"noreferrer noopener\">procedures governing budget reconciliation<\/a> only prohibit provisions that increase the long-term budget deficit. In other words, with <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/banner-victories-in-2023-could-extend-school-choice-revolution-into-2024\/\" title=\"2023&#039;s banner victories may extend school choice revolution into 2024\">unified party control<\/a> next year, Republicans could permanently extend the 2017 Trump tax relief &mdash; <em>if they cut spending to do so<\/em>.<\/p>\n<p>Not unsurprisingly, lawmakers are spoiled for choice when it comes to cutting spending. I have <a href=\"https:\/\/www.wsj.com\/articles\/cancel-bidens-spending-to-pay-for-tax-cuts-bf6a9eea?mod=opinion_lead_pos11\">noted<\/a> <a href=\"https:\/\/www.wsj.com\/articles\/republicans-chance-for-real-tax-reform-federal-spending-545ef881?mod=opinion_lead_pos12&amp;mod=article_inline\">elsewhere<\/a> that repealing all of the green energy pork included in the Democrat &ldquo;stimulus&rdquo; measures of the past few years, coupled with undoing various Biden administration regulatory actions, would save enough money to pay for most, if not all, of a permanent tax relief extension. Yet some Republican lawmakers are already <a href=\"https:\/\/www.politico.com\/news\/2024\/06\/05\/biden-climate-law-gop-00161822\">backpedaling<\/a> on the idea of repealing all of Biden&rsquo;s green pork &mdash; which I&rsquo;m sure has <em>absolutely nothing<\/em> to do with the fact that <a href=\"https:\/\/www.politico.com\/news\/2024\/05\/24\/big-business-biden-democrats-climate-law-00156378\" target=\"_blank\" rel=\"noreferrer noopener\">special interest groups<\/a> also want to retain said subsidies and handouts.<\/p>\n<h2>Congress, Do Your Job!<\/h2>\n<p>Therein lies the problem with the supply-side argument: It absolves Republican lawmakers from exerting any fiscal restraint on the government spending that has left Americans with a <a href=\"https:\/\/thefederalist.com\/2024\/06\/24\/two-trillion-dollar-deficits-show-washington-has-a-spending-problem\/\" target=\"_blank\" rel=\"noreferrer noopener\">mountain of deficits and debt<\/a>.<\/p>\n<p>Having worked for both Pence and Toomey when they served in Congress, I know they have generally good records on spending. For instance, both men <a href=\"https:\/\/clerk.house.gov\/Votes\/2003669\" target=\"_blank\" rel=\"noreferrer noopener\">opposed<\/a> the creation of an unpaid-for prescription drug benefit back in 2003 &mdash; an incredibly tough vote against the leaders of their party, to demonstrate that lawmakers shouldn&rsquo;t stick trillions of dollars in long-term spending on the nation&rsquo;s credit card.<\/p>\n<p>Given that history, both they and other pro-growth advocates should insist that lawmakers fund any extension of tax relief next year by reducing federal spending. Such efforts would first allow a Republican-controlled Congress to make such tax relief permanent, providing helpful certainty to businesses and individuals alike. Just as important, acting in this manner would force lawmakers to exercise a fiscal discipline they have abandoned for far too long.<\/p>\n<hr>\n<p>      Chris Jacobs is founder and CEO of Juniper Research Group, a policy consulting firm based in Washington, and author of the book &#8220;<a href=\"https:\/\/www.amazon.com\/dp\/1645720020\">The Case Against Single Payer<\/a>.&#8221; He appeared in the 1995 &#8220;Jeopardy!&#8221; Teen Tournament and is on Twitter: <a href=\"http:\/\/twitter.com\/chrisjacobsHC\">@chrisjacobsHC<\/a>.<\/p>\n<\/p><\/div>\n<p><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>What is the future of supply-side economics? In light of ongoing discussions about conservatism since 2016, those on the right may want to evaluate how relevant a philosophy that gained prominence with Ronald Reagan is today, nearly fifty years later. This inquiry is especially pertinent as significant elements of the 2017 Tax Cuts and Jobs Act are set to expire next year. The evolving conversation surrounding this tax legislation highlights both the advantages and drawbacks of the supply-side approach: while it can stimulate economic growth, it also provides politicians with an excuse to avoid cutting government spending.<\/p>\n<p>Supply-siders generally aim to boost economic growth by optimizing tax rates. Instead of focusing on how to fairly distribute existing wealth\u2014an approach that assumes a zero-sum game where one party&#8217;s gain necessitates another&#8217;s loss\u2014they prioritize expanding overall economic output so that everyone, including individuals and the federal government, can benefit from a larger share.<\/p>\n<p>The idea that reducing tax rates can lead to increased tax revenue through enhanced economic activity originated from economist Arthur Laffer and his well-known curve. Donald Trump&#8217;s 2017 tax reform largely adhered to this principle, resulting in notable economic growth and rising incomes\u2014especially among women, ethnic minorities, and foreign-born workers.<\/p>\n<p>However, not all tax cuts produce equivalent levels of economic expansion or generate sufficient revenue to offset their costs. If they did, for instance, lowering taxes to just 1 percent would maximize federal income (though such an outcome is highly unlikely). Nevertheless, the core concept remains valid: strategically implemented tax relief can foster economic growth while mitigating declines in government revenue.<\/p>\n<p>The challenge with this philosophy lies not in what supply-siders advocate but rather in what they overlook. By concentrating exclusively on generating revenue as a means for fostering growth, they inadvertently allow politicians to neglect necessary reductions in government spending.<\/p>\n<p>A recent op-ed by Mike Pence and Pat Toomey in The Wall Street Journal discussed the positive impacts of the 2017 tax law but concluded with an unsettling implication for policy analysts: They suggested either forming a bipartisan coalition for permanent implementation or relying on Republican control after upcoming elections for temporary extensions\u2014both scenarios lacking any mention of addressing spending cuts alongside these measures.<\/p>\n<p>This premise is fundamentally flawed; budget reconciliation rules only restrict provisions that would increase long-term deficits. Thus Republicans could permanently extend Trump\u2019s 2017 tax relief if they simultaneously reduced spending.<\/p>\n<p>Lawmakers have numerous options available when it comes time for budget cuts. For example, eliminating wasteful green energy subsidies from recent Democratic stimulus packages could yield enough savings to fund most or all extensions needed for permanent tax relief without increasing deficits. Yet some Republican lawmakers seem hesitant about repealing these subsidies due partly to pressure from special interest groups advocating their retention.<\/p>\n<p>This situation illustrates a critical flaw within supply-side arguments: they relieve Republican lawmakers from taking responsibility for curbing excessive government expenditure which has led Americans into significant debt burdens.<\/p>\n<p>Having previously worked alongside Pence and Toomey during their congressional tenures gives me insight into their generally commendable stances regarding fiscal responsibility; both opposed creating unfunded prescription drug benefits back in 2003\u2014a challenging stance against party leadership aimed at preventing unsustainable long-term liabilities being added onto national debt accounts.<\/p>\n<p>Given this background knowledge about them\u2014and other proponents advocating pro-growth policies\u2014it\u2019s essential that lawmakers commit themselves towards funding any future extensions through meaningful reductions within federal budgets instead! Such actions would enable Congress under Republican leadership not only make these beneficial reforms permanent but also instill much-needed fiscal discipline long neglected over time<\/p>\n","protected":false},"author":521,"featured_media":2326530,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/thefederalist.com\/wp-content\/uploads\/2024\/08\/Currency-Stack-Men-Buildings.jpg","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[38511,38510,3756,38509,37525],"class_list":["post-2326529","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","tag-economic-strategy","tag-fiscal-policy","tag-republicans","tag-spending-cuts","tag-tax-cuts"],"fifu_image_url":"https:\/\/thefederalist.com\/wp-content\/uploads\/2024\/08\/Currency-Stack-Men-Buildings.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2326529","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/521"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2326529"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2326529\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2326530"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2326529"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2326529"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2326529"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}