In a North Dakota speech last week, President Trump laid out his new tax plan, which entails cutting the number of income brackets from 7 to 4, lowering taxes for all said groups, eliminating the estate tax (also known as the inheritance tax), and simplifying the tax code. As the president himself stressed, lower taxes will help generate economic growth, lead to job creation, and keep money in poor people’s pockets. Here’s how this happens: When the tax bill is lower for small businesses, they have extra money that they can use to hire people and, therefore, create jobs. Having said that, Trump also said that he was going to work with Congress on increasing the debt ceiling (the maximum amount of debt the government can owe). Currently, the U.S national debt is at around $20,000,000,000,000 (I put the zeros there to show how big the number is). Lower taxes lead to job creation. One rebuttal to this is that there is no way to ensure that businesses will spend the amount they will save on hiring new people. This is a logical assumption, but it is also distorted when taking a step back and looking at the bigger picture. Businesses will not be the only ones who will save on taxes; consumers will also have more money in their pockets. Consequently, this means that they will spend more money (either by going shopping, dining out more frequently, or in any other way). This, no doubt, will mean that businesses will be serving more customers. They will need to hire extra staff in order to manage an increase in demand and satisfy said consumer growth. Another crucial aspect in that lower tax rates will, by default, lead to less government spending. Think of all the people who got new jobs, doesn’t that mean that the state will be making out less unemployment welfare payouts? What about poor people saving money? Wouldn’t that cut the amount of government assistance they need like food stamps and medicaid? Furthermore, who is to say that the current levels of government spending are necessary? Large bureaucracies, wasteful spending, and unwise management decisions (such as military involvements abroad) can all but cut in order to lower the national debt. In fact, when President Trump was a candidate, he railed against this, vowed to decrease spending, and even said that the U.S should stop policing the world during both the primaries and the general election.The president should stick to the promises he made during the campaign because their positive affects will not only be felt in the next four to eight years, but for decades to come. If the debt is increased today, it has to be paid back in the future by the taxpayers. In other words, when that time comes, wouldn’t businesses see their expenses go up, which would mean they have to lay-off workers? What about poor people, wouldn’t the number of those who can’t afford basic living needs like food and healthcare increase, prompting the government to spend more on welfare? When American voters cast their ballot last November, both Trump supporters and those who voted for other candidates, listed the economy as their top concern. Perhaps two of the most important growth propellants are lower taxes and cutting the national debt. Trump is already working with Congress and got a budget passed in the House that would increase the debt ceiling. Luckily, though, this legislation - should it pass the Senate - will only last for three months. By the end of 2017, the first full one-year budget under the Trump administration will need to be agreed on. The president has an opportunity hear to leave a legacy behind as one who revitalized the American economy. However, this can only happen if the long-run is taken into consideration. The 2018 budget should be centralized around dealing with the debt and coming up with a sustainable solution. Credit to VU Music Inc. for the music. The following works are not UCR’s own and were used under the appropriate licenses: Creative Commons CC0 1.0: - U.S Debt Chart (0:00 to 0:00): Work by Delphi 234 Creative Commons CC 2.0 Generic: Taxes Jar (0:00 to 0:00): Work by Tax Credits Creative Commons CC 2.0 Share-Alike Generic: Tax Filing Computer Cartoon (0:00 to 0:00): Work by eFile 989 April 15 Calendar (0:00 to 0:00): Work by eFile 989 Donald Trump on Podium Wearing a Blue Tie (0:00 to 0:00): Work by Gage Skidmore Creative Commons CC 3.0 Share-Alike Unported: Upside Down Government Building (0:00 to 0:00): Work by Keizers Creative Commons CC 4.0 Share-Alike International: Donald Trump with Signed Pledge (0:00 to 0:00): Work by Michael Vadon