Analysis of Tax Policies and Economic Goals

Tax Cuts and Jobs Act (TCJA)

  • Congressman Smucker expresses pride in the impact of the Tax Cuts and Jobs Act (TCJA) on his constituents.
    • Average families in his district saw an increase of about 6,0006,000 in their wages in the years following the TCJA.
    • Inflation was low.
    • He contrasts this with what he considers the "disaster" of the current administration.

Criticisms of Democratic Opposition

  • Smucker criticizes the Democrats' opposition to extending the benefits of the TCJA.
  • He accuses them of voting for:
    • The largest tax increase in American history, affecting average households at every tax bracket level.
    • A 50% decrease in the child tax credit.
    • Worldwide Medicaid dollars to go to people who are here in the country illegally at the expense of American citizens.
    • Medicaid dollars that are intended for people who really need them to go to individuals who could be working but choose not to.
    • Medicaid benefits not to go to women and children as they should.
    • Smucker says Democrats are voting against policies that they voted for before, such as full expensing and full deductibility of R&D. He says, now we're adding full expensing for structures which will reenergize American manufacturing.

Fiscal Responsibility and Economic Growth

  • Smucker asserts that extending the TCJA benefits will be beneficial to every American and will be done in a fiscally responsible way.
  • He claims it will drive more efficiencies in some programs and will not add to the debt, assuming conservative estimates on growth.
  • Concerns Arose About CBO Estimates:
    • The CBO produces a "black box" that estimates growth at 1.7% or 1.8%, whether the TCJA is made permanent or not.
    • This estimate assumes no change in growth even with the largest tax cut in history.
    • Smucker says that, obviously, both scenarios cannot be true.

Deficit and Debt to GDP Ratio

  • Smucker brings up the Secretary's "333 plan" from his confirmation hearings, particularly the goal of getting the deficit to 3% of GDP.
  • He asks if the Secretary still hopes to achieve that goal by the end of Trump's term.
  • The Secretary confirms that his goal is to have a three in front of the deficit to GDP by 2028, emphasizing that the deficit to GDP ratio is more important than the absolute number.
    • Referencing that the ratio is the long term average.
  • The Secretary also mentions the total debt to GDP ratio, which he and Secretary Yellen agree on as important metrics.