Will Trump 's Lower The Tax Rate Reduce The Budget Deficit? Essay

A fiscal deficit is when a government's total expenditures exceed the tax revenues that it generates. A budget deficit can be cut by either reducing public expenditure or raising taxes. In this essay, I am going to analyse the benefits and costs of increasing tax rates to reduce fiscal deficits instead of cutting government expenditure.

The growing national deficit is a looming problem in the United States now more than ever. The national debt is constantly increasing and government spending is out of control. If these issues are not solved then they could spell disaster for the nation’s economy when the infamous debt ceiling is finally reached. Currently the national policy on the debt is to continue raising the debt limit until a solution is found that is agreeable between both parties in Congress. The two main issues of over spending and the constant raising of the debts ceiling by Congress can both be resolved by government spending reform, balancing the federal budget and initiating pro-growth policies in order to increase the government’s tax revenue.

Answer: If there is a difference in the spending of government and the in income will lead to the deficits. More over deficits occurs when the amount of government total budget exceeds its total receipt for a fiscal year was said by US senate budget committee. From the US debit clock, largest budget items list are medical, social security, defense/war, income security, net interest on debt, federal pensions. As we can see that the largest budget items every item has its own importance for Medicare the budget is $949 billions, social security is $872 billions, defense is $591 billion, income security is $310 billions, net interest on debt is $245 billion, and federal pensions is $253 billion. A cut back in the spending of the government is not an easy task because which lead to so many issues. Every items has got his own importance consider defense which is a national importance, medical which is health importance, likewise every items has got their own importance. I would recommend cut back on income security in which the budget is allotted to maintain forester care, earned income credit, unemployment compensation, nutrition assistance, family support, making work pay this is meant for the citizens of the social welfare.

Many contend that deficit reduction is imperative to our prosperity and economic recovery. The deficit is blamed for a variety of economic ills including high interest rates, unemployment, the trade deficit, the low rate of national saving and low productivity growth (Shaviro, 1997).

Many United States' citizens are unaware of the country's current financial state. Many assume that one of the world's wealthiest countries could never be in debt. This is untrue however, and, in fact, the country with the greatest income per capita is in major debt. This study will examine possible solutions to reducing the United States' national budget deficit.

I agree that a solution to fix the issue of the national debt is to increase taxes by fifty-seven percent or cut all government spending by thirty-seven percent. Although I agree with it, I think there maybe a way to improve it without making things awkward. Increasing the tax percentage could fix our problem, I just wonder how the younger generations will handle this considering the financial situation they are dealing with now with high student debt and other economic factors. Cutting government spending is not necessarily a bad thing. However, if you cut spending on vital programs like Medicare, the quality of products from the programs may not help us the way they were meant to

Since the nation’s very beginning, it has carried a debt from the American Revolution. Only once in the entire U.S. history has been the debt zero, during President Andrew Jackson’s administration in the 1830’s. President Jackson set a budget like the other future and past presidents, but actually stayed within its parameters. However, the debt kept growing after his presidency and reached $18 trillion dollars today. The world has changed a lot since the 1830’s, the methods used during that period can no longer be the solution in 2015 because there are just too many factors that must be considered. The size and the population of the country have changed dramatically, foreign relationships are far more complicated and broader, and people’s expectations of the government are different.

3). Trump further pointed out that large fractions of the US annual budgets are set aside to finance the international economic obligations of the country. As such, the Republicans pointed out that cutting such parts of the budget would help to boost the American economy and to reduce budget deficits.

The United States deficit, surplus, and debt will always have an impact on taxpayers. In the state of high deficit the government seeks ways to cut and save money for debt payment. The government does this by pulling funding from programs that have little government impact. Increasing taxes also supplies the government with extra income. In addition to the reduction or elimination of certain tax credits, the government analyzes school funding for cost effectiveness. Each step the government takes has a trickling effect on taxpayer’s dollar.

Cutting their funding will lead to more health issues for people who used to go to them, thereby increasing costs on the public services providing by the government. It will end up costing more than actually not cutting their funds.

While campaigning in 1980’s Ronald Reagan promoted his solution to fixing the economic debt that the United States accumulated over the years. This solution was named “Reaganomics”. The United States was left with a $2.6 trillion dollar debt from President Reagan theory by cutting taxes, and the Federal Revenue would increase because economic activity will increase. President Reagan focused cutting down

In the article, “The Trump Budget Legacy: A Permanent $1 Trillion Federal Deficit,” the author, Stan Collender, reasons that President Trump’s budget will leave a 1 Trillion dollar federal deficit. He argues that, “the spending and taxing policies about to be put in place by the Trump administration and the Republican-controlled Congress will balloon the federal deficit to $1 trillion or more every year going forward” (Collender, 2017). He attributes this to the fact that it appears all of the proposed cuts won’t pass the U.S. Congress and Senate.

A graphical representation showing the relationship between the government increasing taxes and the total revenue they will collect is referred to as the Laffer curve, this is a hypothetical representation. The curve is named after Arthur Laffer the economist, though he has pointed out that this concept is not his as it originates from writings by a Muslim philosopher of the 14th century Ibn Khaldun ADDIN EN.CITE Dalamagas199864(Dalamagas, 1998)646417Dalamagas, BasilTesting the Validity of the Laffer-Curve HypothesisAnnals of Economics and Statistics / Annales d'Économie et de StatistiqueAnnals of Economics and Statistics / Annales d'Économie et de Statistique77-102521998L'INSEE / GENES on behalf of ADRES0769489Xhttp://www.jstor.org/stable/20076152( HYPERLINK l "_ENREF_1" o "Dalamagas, 1998 #64" Dalamagas, 1998). There are other historical precedents that also exist. The Laffer curve suggests that the government can increase taxes up to a certain level if they want to increase their revenue and reduce the budget deficit, but past the optimal level then the negative would occur as people would want to work because most of the money they earn would be taken by the government in terms of paying taxes. The government should endeavor to remain at the optimal point of the Laffer curve so that it can maximize on its revenue and also encourage people to work harder.

For as long as Americans can remember there has always been a federal deficit. In fact, the only time in American history when there was no federal debt was under president Andrew Jackson, and it only lasted a single year(Wall Street Journal). The federal government never managed to pay off the debt again, although some administrations, like Coolidge’s and Clinton’s, have managed to run brief surpluses(Wall Street Journal). Yet today there seems to be no limit on the debt and deficit spending, and a key question has been pressed into the forefront of politics and fiscal policy, “is

Throughout most of the country’s history, the United States’ federal government maintained a reasonable level of national debt. For example, the total national debt in 1981 was $998 billion. Since then, however, the government has generated significant budget deficits, and the level of debt has risen to $16.7 trillion in 2013 (Calleo, 39). Budget deficits are caused