There’s a major contradiction between Donald Trump’s love for bigger government and his tax plan. He’s proposing infrastructure, defense, and immigration cost increases that require Clintonesque increases in tax revenues, but his tax plan calls for a $9.5 trillion reduction in those revenues.
In other words, he plans on spending much more while bringing in much less. It’s mathematically impossible for the two plans to coexist.
This represents the biggest problem with the populist movement that Trump embraces. He promises the best of both worlds because he knows that the average American voter will never look at the actual numbers behind his proposals. This cannot be stressed enough: neither Trump nor any human being alive can improve the economy quickly enough or substantially enough to make his tax plan and his spending plans reconcile. To put it into perspective, he would need to triple the export revenue across the board within his first six months in office and somehow sustain it throughout his first term in order to make his plans work together. This is, of course, impossible considering that export revenues move up by small percentage points annually. Instead of the average 4.2% increase in annual export revenue, Trump’s plan would require over a 300% increase in the first six months.
Since most Americans won’t dive into the numbers, let’s look at a sports analogy. Say that the United States is an NBA team. The players are the economic factors that influence revenues such as trade deficits, oil prices, the stock market, etc. For his plan to work, he will need all of his “players” to average 30 points, 10 rebounds, and 10 assists per game while keeping the other teams scoring at half their average. Why? Because his tax plan reduces revenues so dramatically that we are starting each game with a 40-point handicap. In other words, at tipoff the score is 0-40. Then, achieve his plans, his NBA team would have to win every single game throughout the season. A single loss would be catastrophic and the economy would collapse.
I know it’s a clumsy analogy but the point is to highlight the impossibility of what Trump is proposing. As the Tax Policy Center noted in their analysis of his plan, the tax portion would encourage growth but that growth would be offset unless its accompanied by “very large spending cuts.” Otherwise, the national debt would rise faster than it has under the Obama administration and every ounce of economic stability that we’ve been able to precariously maintain since the recession would be abolished.
He has to make major cuts but his proposals on the other side of the fence speak of big government and increased spending. He wouldn’t just need to get Mexico to build his wall. For his proposals to reconcile with his tax plan, he’d need Mexico to pay for the wall, roads, dams, bridges, Social Security, Medicare, and a good chunk of the US military.
It’s just not possible.
His supporters will say, “he’s rich and a winner and he knows better than everyone else how to run a business and make America great again.” They don’t realize two things: (1) He’s rich because he was born into an empire and did a good job of maintaining it, and (2) The country’s economic structure is exponentially more complex than building a real estate company and a reality TV show.