Saturday, October 21, 2017

For the cost of repealing the estate tax, Congress could buy everyone in America a pony

  You know how you’ve always wanted a pony? How as a child you dreamed of feeding carrots and sugar cubes out of the palm of your hand to a little chestnut-colored horse named Maple?

  It may sound fanciful to adults, but President Donald Trump and Republican leaders in Congress put together a wish list of tax cuts for the wealthy that are far more extravagant than ponies. It turns out for the cost of just one of these tax cuts—repealing the tax on wealthy estates—we could literally buy every single American a pony.

  A lovely little Shetland pony, specifically. For all 325 million of us. In fact, the benefits Trump’s own adult children could get from his estate tax repeal would fund nearly 1.4 million ponies—that alone is enough to cover giving a pony to everyone in the state of Maine.

  Let’s break down the numbers. Shetland ponies range in price from $300 to $1,500. We’re not lavish people, but we also don’t want to buy a cut-rate horse, so we assumed $800 per pony (and, of course, that there are enough ponies to go around). The larger expenses are the continuous costs of keeping our ponies healthy, active, and thriving: Every year our ponies will need lodging ($2,400), food ($1,200), and visits from the vet ($300) and farrier ($500).

  These are sizeable expenses; on average, purchasing and caring for a pony will cost about $44,800 over 10 years. But the Senate is already considering a budget that includes a far more sizable expense: $1.5 trillion over 10 years in higher budget deficits for tax cuts that will mostly benefit the wealthy.

  If Congress abandoned its tax cuts for millionaires and wealthy corporations, it could use that $1.5 trillion to purchase and care for a pony for roughly every American child ages 8 and below. Given the current dynamics in the United States—where economic inequality is skyrocketing and My Little Pony: The Movie is now playing in theaters—giving ponies to children is probably a more appropriate policy response than giving tax breaks to millionaires.

  Alternatively, instead of providing tax cuts for millionaires or ponies for children, lawmakers could also use $1.5 trillion in many other ways to create jobs, reduce child poverty, end homelessness, make college free, or provide paid family leave.

  In reality, of course, average Americans will miss out on the pleasures of ponies. A lot of them will even miss out on the tax cuts Trump is promising: 1 in 4 families will actually see their taxes rise under his plan by 2027, while 80 percent of the tax cuts go to households in the top 1 percent. Those tax cuts for the wealthy are enormously expensive, and Congress cannot enact them without severe trade-offs.

  Like the continuous costs of pony upkeep, maintaining America’s economy requires ongoing investments—in education, in transportation, in research and scientific innovation. Yet as we’ve seen time and again, when policymakers slash tax revenue by giving handouts to the rich, they turn around and cut these very investments by complaining that we can’t afford them. And policymakers have made no secret that that’s what they plan to do: Trump’s budget gets two-thirds of its draconian spending cuts by slashing programs that serve low- and moderate-income families, to the tune of $2.5 trillion over a decade.

  At a time when 44 percent of Americans couldn’t come up with $400 in an emergency—and 9 in 10 prefer economic stability to greater economic mobility—Americans aren’t asking for ponies, presents, or parades. And they’re really not asking for massive tax cuts for millionaires, billionaires, and corporations.

  Seventy-five percent of Americans agree that “the wealthiest Americans should pay higher tax rates.” President Trump and Congressional Republican leaders want to give away the horse, the cart, and the country’s future to the rich, leaving little or nothing for the rest of us.

  About the authors: Rachel West is a Senior Policy Analyst in the Center for American Progress’s Poverty to Prosperity Program. Harry Stein is the Director of Fiscal Policy at the Center for American Progress.

  This article was published by

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