We Can't Tax And Spend Our Way Into Prosperity

Posted: Aug 18, 2016 12:01 AM
We Can't Tax And Spend Our Way Into Prosperity

The economic plan Hillary Clinton laid out last week in Michigan is nothing more than a “doubling down” on President Barack Obama’s eight years of failed economic policy. The upside: this plan has a very real track record that provides insights into its shortcomings. If it hasn’t worked for President Obama, then why would we vote for four more years of the same policies?

Most of what Hillary Clinton outlined in her speech will entail more government social control, expanding it with unnecessary new bureaucracy, and adding new taxes and more spending—along with a huge increase in new taxes.

Let’s start with her new tax code.  A surrogate of Clinton’s argued that American corporations already pay the lowest corporate taxes and that (in effect) nobody pays more than 15 percent in taxes anyway. Ironically, in the same sentence she said that corporate inversions had to be stopped.

Well, if we actually had the lowest tax rate in the world, corporations would be flocking here instead of trying to leave. Yet Clinton proposes penalizing companies with a tax for leaving, adding another layer to the already complicated tax code.

Maintaining Control

Clinton also wants to maintain current regulations while adding even more, along with more government oversight of the ones we have (expanding the size of government and spending more money). This means maintaining the control the government has over the growth of corporate America.

Meanwhile, she wants to “invest” in jobs by spending $275 billion on infrastructure, which means even more deficit spending and (again) increasing the size of government. Why? Because we will need yet another federal agency to oversee these infrastructure projects—and, ironically, not create that many new jobs.

Many Democratic legislators are arguing that Hillary Clinton is concerned about the deficit and that Trump will add to it. My question is how we generated $9 trillion in debt from George Washington through George Bush (219 years), then Obama’s fellow Democrats watched him double that amount in just eight years. And just now they are concerned?

In 2008 in Fargo, N.D., then-candidate Obama said that “$9 trillion of debt was unpatriotic, irresponsible.” Now it stands at $19 trillion. Apparently that makes him a Great American. Somehow, I don’t think that argument holds up, especially since Hillary Clinton’s plan will keep us on the same trajectory.

After all, she wants to expand the complexity of the tax code (more government) and give tax credits (more spending) for companies that enter new markets and train employees, plus launch a national initiative to simplify the tax code for only certain employees.

More Objections

Add to that Clinton’s planned tax incentives for employee union training, a national campaign for training in trade skills, tax credits and incentives to support high-quality union jobs, a new enforcement agency to catch lawbreakers of trade deals, and tax credits for employers who engage in profit sharing. Can anyone hear calls of “more government and more spending” echoing through Congress?

But she’s not done. She also favors expansion of Social Security (more government spending), paid family leave (more spending) and raising the taxes on the super-wealthy (which will inhibit growth). The latter plan will add a 4 percent tax surcharge on those earning more than $4 million a year, which may sound great but will further dis-incentivize growth.

If your head isn’t spinning from all these plans, add to it the Bernie Sanders-inspired free college tuition (more government and spending). I guess the trillions of existing student debt can help finance that plan. Where will all the other money come from? For starters, Clinton’s proposed 28 percent cut in allowable charitable deductions.

Demonizing Growth

Hillary Clinton will keep us on a path that demonizes both the wealthy and the average American, as well as profits, by dis-incentivizing entrepreneurs and others who want to grow their companies here and create American jobs.

The trouble is that neither America, nor any other country, is going to grow in an environment that promotes an ever-expanding government, a government trying to control every aspect of our economy, exert more social control, discourage workers and decimate the middle class. And, in the process, shore up its voter base of the poor and those depending on Uncle Sam for their existence.

These policies will do little, aside from increasing the voting base for the progressive agenda that continues to fundamentally change America. The goal: get them, at last, to the place where it will be literally impossible for progressives to lose an election because 50-plus-one percent one of the voting bloc will never vote themselves out of the very thing that is sustaining them.

During her years in office, British Prime Minister Margaret Thatcher discovered the monumental challenges of facing down socialism in such an environment. America will be no different if we allow progressive policies of tax-and-spend, increasing social control and bloated government to continue.