Trump has already suggested getting rid of income tax. It’s the right thing if you ask me. Shrink the federal government, substantially. You’re not taxing your way into solvency.
I don’t remember Trump saying we should get rid of all income tax. When other politicians say we should get rid of all income tax, they usually combine it with raising the sales tax, which is a very bad idea because it hurts lower-income people much more than the wealthy. Let’s not confuse the issue here.
Shrinking the federal government and cracking down on waste are not credible responses. The federal budget is dominated by Social Security, Medicare and Medicaid, debt service and national defense, plus other entitlements. Discretionary domestic spending is a small part of the budget, and it is the part of the budget that isn't growing out of control. We can squeeze the National Park Service, the Forest Service, the air traffic control system, HUD, Commerce, federal law enforcement, etc., and there are many useful reforms that should be made. Yes, there are whole agencies that I would be happy to abolish, with short term savings in the tens of billions of dollars (part of which would be offset by the devolution of these functions back to the states). But the maximum savings we can squeeze out there are pencil dust compared to the debt problem.
National defense is the only big budget component that has been on a long term decline curve as a percentage of spending and the GDP. Many freepers can remember when defense spending was over 50 percent of the federal budget and over ten percent of GDP. But that was before Medicare and Medicaid, before the Ponzi scheme math of Social Security had started to bite, before food stamps, and before LBJ put the welfare state on a COLA and automatic growth was baked into the cake.
Either we deal with entitlements or we go bankrupt.
And if we get rid of the income tax, what do we replace it with? I've always been partial to a consumed income tax, but that is a hybridized form of the income tax. The several varieties of flat taxes that people offer up would be better than the monstrosity that we have now, but they are still income taxes. Straight consumption taxes? A European style VAT? Wealth taxes? Excise taxes on Hunter Biden paintings? (I like that idea. Should be worth trillions.)
At a minimum we should eliminate the dual income tax, which means eliminating the separate corporate income tax and taxing corporate income when it is realized as dividends or capital gains. Nothing would escape the tax net, but the taxes would be paid via the individual income tax, not camouflaged through the maze of the corporate tax code. Build from there.
So what does Trump propose? I'm sure he'll say it's amazing and beautiful, so much so that we won't believe how good it is and that it will kickstart the economy into growth that you wouldn't believe. Trump starts with hyperbole and then goes into orbit. Does he actually have a tax reform plan? He wants to make his first term tax cuts permanent, and he wants tariffs. He wants to eliminate taxation of tip income and Social Security benefits. But that doesn't address the structural tax reform and deficit problems.
At the level of bumper sticker sloganeering, Trump's platform is mostly fine. (I would quibble on a few points.) But there is nothing in it that even hints at an outline for tax reform. He takes entitlement reform off the table. He's for tariffs, economic growth, drill baby drill, and tax cuts. But if he wants to eliminate the existing federal income tax, he has to replace it with more than a bumper sticker slogan. And if he doesn't deal with entitlements, nothing he does on taxes or economic policy will make a difference, because entitlements will eat us alive. We are getting to the end of the road.
Here's the platform: Trump Agenda
Yes, I understand that campaign platforms are a combination of goal setting, sloganeering and wishful thinking. But Trump rules entitlement reform off the table. And that's the whole ballgame.
Ronald Reagan has gone beyond recall, but I with Trump would at least sit down privately with Newt Gingrich and George W. Bush (yes, GWB), both of whom at least stepped up to the Gordian Knot of entitlement reform and tried to advance a serious reform agenda within an affirmative, credible policy agenda that could be defended in the political arena. GWB even ran for reelection with the shifting of Social Security from a ponzi scheme to a fully funded, investment basis as a part of his agenda. He didn't get traction on the Hill because the democrats are adamantly opposed to dismantling the dependency racket, but he was at least talking about the real problem -- and he managed to win reelection despite Al Gore jabbering about "risky schemes." Trump seems to have drawn the lesson that the subject is untouchable, which is the wrong lesson to draw. Trump should be talking about the potential to triple or quadruple people's Social Security benefits if the money were invested rather than spent.