Tax cut plan makes no sense — unless you’re wealthy

At a certain level, funding government isn't rocket science. It just takes money.

If you want the most powerful military in the world, it takes a ton of money. Look at Elmendorf, Eielson, Fort Wainwright and our other Alaska installations, our F16s, F22s and F35s, it all takes money. Tons of it. Social Security and Medicare for our elderly? Tons of money. Infrastructure, from highways to airports? Money. Veterans' care? More money. Unemployment insurance, science research, Medicaid, education support, it all takes money, not to mention wars and disasters.

All told, it takes $4 trillion to run the federal government. And thanks to income, payroll and corporate taxes, plus some other revenues, lately the federal government raises about $3.5 trillion. That leaves us half a trillion short, so we borrow the rest. Of course, we've been borrowing for many years now, especially the last 15 years, so the debt has piled up to about $20 trillion. That's a problem.

So there you have it: The government costs $4 trillion a year; we only raise about $3.5 trillion, we borrow the rest, and we pay interest on the accumulated $20 trillion that we've borrowed over the years.

Now if you already owe a mortgage, and your monthly spending is putting you further into credit card debt, you'd think about cutting your spending, bringing in more money, or doing both. For the federal government, the logical choices are the same: Raise more money, cut spending, or do both.  But the absolute last thing you'd do is cut your earnings — cut your revenue — and make a very bad situation even worse. Yet that is exactly what Republican leaders in Congress are now doing: In the face of a staggering debt and despite record deficit spending they are proposing to cut revenues over the next 10 years by $1.5 trillion.

[House passes tax plan, advancing big cuts for corporations]

If you believe the military needs to be built up, that's no way to do it. If you think the safety net needs to be broader, that's no way to do it. If you believe our country's crumbling roads and infrastructure need to be rebuilt, that's no way to do it. Cutting revenues when we are already $20 trillion in debt and are going deeper and deeper by half a trillion every year is, in a word, insane.

Now, there are those "supply-side" economists who will say that what looks like madness is actually really smart. They say that lowering taxes, especially on the wealthy, is a sure way to spur economic growth, because the rich will increase employee wages and expand their businesses, and when that happens people will earn more and buy more and, of course, pay more individual taxes. Help the corporations, help the rich, and the little people, the working people, will bail the country out with their extra spending and higher taxes.

Insane. Doesn't happen. Turns out the rich keep the money they earn — big surprise there — and the theoretical trickle-down into the economy is just that: theory. Everybody loses (except the rich) and the deficit gets bigger. The Reagan tax cuts are the best example of that. Turns out when you lower taxes you lower overall revenues and the annual debt goes up. In the year after the 1981 tax cut, the national debt soared, the stock market collapsed, and interest rates more than doubled to nearly 20 percent. By 1995, and after another tax cut bill in 1986, the national debt had increased five-fold from about $1 trillion to $5 trillion.

Cutting taxes is the last thing Congress should be thinking about doing when we're deficit spending and paying down a national debt of $20 trillion.

[GOP tax plan in trouble after senator says he won't back it]

The current proposals to cut taxes aren't just fiscally insane; they are an immoral and transparent attempt to line the pockets of monied interests that feed the very "swamp" that so many politicians like to say on the campaign trail needs to be "drained." Do millionaires and billionaires really need tax breaks? And to pay for these hefty giveaways to corporate America, do we really want tax reductions for individuals to expire in 10 years just so the math can add up for the rich when your taxes bounce back up? Do we really want to repeal a portion of the Affordable Care Act so we cut 15 million of our fellow Americans off of health care, just to fund tax reductions for the rich? Republican leadership in the House and Senate have placed all of this, and more, on the table.

We are a nation, and our nation is in trouble. But there is reason to hope.  We just need to bind ourselves together in common purpose. To do that, to provide for our safety, our security, and our health in a just world requires us to pay our fair share toward this miraculous democracy we call America. Tell Congress you're willing to shoulder your fair share, but that corporate America needs to do the same. Reject Republican proposals to cut taxes on the rich.

Lloyd Miller is an Anchorage attorney.

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