I hope the GOP tax cuts prove as successful as their proponents claim they will be. I don’t want them to fail, I don’t want our country to slip into recession or suffer from inflation. Three percent growth could produce a lot of good jobs, a lot of tax revenue needed to make the kind of investments in clean energy and education for our youth to move our country forward. I want to see life get better for all Americans, and I want to see enough growth so we can help get people in the inner cities and Appalachia back to work, utilizing their unique talents to move our country forward.

Like many people who read the news and are knowledgeable about economics, I am skeptical how much the tax cuts will grow our economy. Certainly the corporate tax cuts are helping business, they’ve been helping the market run on a tear over the past year. But it’s a Christmas gift that businesses and stockholders (like myself) have been expecting for a long time, once the present is unwrapped and enjoyed for an hour or so, much of the joy of tax cuts are certain to wear off. That marvelous toy, beloved by child for a few hours eventually just ends up smelling like burnt plastic in the burn barrel. But maybe with fewer taxes, businesses will invest more in their businesses, and shareholders will continue to gain going forward. But I’m not that hopeful. The excitement of tax cuts quickly wear off and are forgotten.

As an investor and as one who is putting away a good chunk of every paycheck towards my eventual retirement in 20-30 years, I certainly want the economy to grow. The money saved today, is money that will eventually buy me land, an off-grid cabin, more guns, a four wheeler and sled, livestock and anything else needed for a good life out in country. A good economy is good for all Americans, even if some places are left behind. An affluent society can invest in those who have been left behind, help them find meaning in life, put people who otherwise would be left behind back to work.

But I am concerned. I see the dark storm clouds in the distance. Our government leaders can put their heads into the sand and deny climate change, or ignore fundamental economics that say you can’t go beyond full employment without elevating inflation. Climate change is a real threat, and society has done the bare minimum to prepare for the natural forces we are unleashing on the globe, to say nothing of doing the bare minimum to control emissions. Most economists will tell you we are at full employment, and stimulating the economy is not what is needed to help those left behind. Education, job training, and relocation assistance is needed to help those without work, not an economy that can’t grow even faster without inflation.

I don’t buy the fact that only the rich will benefit from the GOP tax cut. I am not rich, but any way I look at the numbers, I will benefit from the tax cut. For one, the 25% and 15% brackets which I currently are taxed at will go down by 3% each, which puts more money in my pocket every pay check. The larger standard deduction, even with the loss of personal deduction, means my adjusted income is less, so more of my income falls in the new 12% rate and less at the new 22% rate. Not to mention, the 22% rate starts at a higher portion of my income, as it’s been inflation adjusted upwards. Less directly, it’s promoting growth across the economy, which is causing my stocks and bonds to grow. It’s pushing up interest rates, which are making my cash savings grow. At least for now. But the question is a tax cut that is going to balloon the deficit, and how will it stimulate an economy already at full employment? Will flooding the debt markets with government debt devalue the dollar even further?

Sure, the changes to the personal income tax rate sunset in eight years, after the 2024 presidential election, but do you think that the next president and congress is going to allow a massive hike on working families? You be the politician who says people should pay more in taxes, even if it reduces the deficit. I suspect if Democrats are elected, they’ll increase the top rates and preserve the lower rates for middle-class families. If Republicans are elected, they’ll preserve the rates as is and seek new ways to fund the government and cut spending for certain government programs. Or most likely just ignore the deficit, because interest rates remain low, and government borrowing is cheap and mostly paid through ordinary inflation in the economy over time.

Liberals and most economists are right to say that the increase of federal debt will cause problems (some point) down the road. But the tax cuts equal $100-$150 billion a year or $1.5 trillion over ten years, which isn’t all that much when you consider how truly massive the federal budget is at $4,049 billion. To make up for the loss revenue, I suggest a fairly stiff carbon tax ($100 a ton or higher), that disincentivizes carbon intensive activities and encourages the efficient use of energy. Sure working families including myself will pay the brunt of this tax, but hopefully people will choose to consume less, especially of carbon intensive activities and invest more under such a tax system. Lower businesses taxes will help the economy grow, and help mitigate the impacts of such a large and expensive carbon tax. We can also cut defense spending, as our country has not had a major war in many years, and cut police forces, as crime rates continue to decline. There is no need wasting money for government programs that don’t make sense in peace-time with crime rates being as low as they are today. Repealing outdated and unnecessary laws, can further help save on need for law enforcement, as there are fewer laws to enforce.

I am not freaking out about the GOP tax cut like some of the Democrats. I don’t buy the president’s rhetoric that the tax cut will be “rocket fuel” for the economy, but I think it will be mildly stimulative, give me a little more money in each paycheck and provide modest gains to my investments. The increased deficit can be offset by a future carbon tax, and future congresses can and will end up renewing most of the personal income tax cuts, especially in the lower brackets.