Trump Tax Cut Proposal Underway

[laklak]

http://www.businessinsider.com/trump-ta ... uditors-25

A different take.

[Scot Dutchy]

Who is paying for it then.

[L'Emmerdeur]

While Trump supporters cheer on his block-headed stomping around as 'winning':

'We’re witnessing the wholesale looting of America'

Over the course of 2017, both in Congress and in the executive branch, we have watched the task of government devolve into the full-scale looting of America.

Politicians are making decisions to enrich their donors — and at times themselves personally — with a reckless disregard for any kind of objective policy analysis or consideration of public opinion.

A businessman president who promised — repeatedly — that he would not personally benefit from his own tax proposals is poised to sign into law a bill that’s full of provisions that benefit him and his family. Congressional Republicans who spent years insisting that “dynamic scoring” would capture the deficit-reducing power of tax cuts are now plowing ahead with a bill so fast that they don’t have time to get one done, because it turns out they can’t be bothered to meet their own targets.

Meanwhile, in the background an incredible flurry of regulatory activity is happening out of public view — much of it contrary to free market principles but all of it lucrative for big business and Trump cronies.

Throughout the 2016 campaign, the political class talked a lot about “norms” and how Donald Trump was violating them all. He brushed off fact-checkers, assailed the media, went on Twitter tirades against his critics, and dabbled in racism. Since taking office, his norm busting has spread. Members of Congress who under other circumstances might be constrained by shame, custom, or the will of their constituents have learned from Trump’s election that you can get away with more than we used to think.

...

Back in 2009-’10, of course, the Obama administration responded to the financial crisis and the chaotic Bush-era bailouts by passing the Dodd-Frank law to overhaul America’s financial regulations. The goals of the law were twofold, on the one hand hoping to tighten the regulatory screws to make future bailouts less likely and on the other hand trying to bring some order to the question of what to do with large banks that do go bust in a way that risks a crisis.

Republicans opposed this approach, arguing that heavy-handed regulation was stifling the economy. But they said that they, too, deplored bailouts and that the real solution to the problem of banking crises was a need to tie the government’s hands to prevent any possibility of future bailouts.

The Trump administration has taken up the deregulatory baton with gusto, appointing Wall Street lawyers to run key agencies and turning what was intended to be an interagency working group on identifying financial risk into a forum for advancing deregulation.

But the free market fix for financial crisis has gone missing in action. In late November, the Trump Treasury Department quietly announced that it wants to keep the Dodd-Frank Orderly Liquidation Authority fund around after all. That’s an obscure little corner of the government, but it’s conceptually crucial — that’s the thing Republicans used to call a “permanent bailout fund.” They used to argue that eliminating it was the key to establishing a sound financial regulatory framework in which no bailouts would happen, and bankers would be disciplined by markets rather than bureaucrats.

Under Trump, the reality is that neither markets nor bureaucrats are going to be doing any disciplining.

In the short term, of course, lax banking regulation will almost certainly pay off in the form of higher bank profits and stock valuations. The problem is when the crisis hits down the road. But that’s exactly the triumph of short-term thinking that pervades everything Trump does, from debt-financed tax cuts for the rich to disinvestment in education, rollback of environment regulations, and approaches to the telecom sector that prioritize the profitability of today’s incumbent businesses over tomorrow’s regulators.

Across the board, it’s about letting whoever’s powerful now squeeze as much out as they can without worrying too much about the consequences — like enormous, deficit-financed tax cuts passed with no regard for budgetary or economic effects.

The strange death of tax reform

The tax bill is another case in point. It’s poised to pass Congress this week, and the swamp is overflowing with perks.

Somewhere in its murky origins, “tax reform,” as conceived by is Republican authors, was supposed to be a policy-driven bill aimed at creating a simpler and fairer tax code that would generate broadly superior economic outcomes for most people — a normal governing objective even if it was always the case that substantial disagreement would exist over the merits of marginal corporate tax rate cuts as a growth-boosting policy.

But along the way, virtually all of the high-minded aspirations were dropped and all of the normal aspects of congressional process broken — to the point where the bill’s leading architects won’t even mention the policy changes that are at the heart of the bill. In the end, instead of taking on the special interests as promised, it gives away the store to almost every lobby shop in town — with last-minute additions that personally enrich the Trump family and a decent chunk of the members of Congress voting for it.

Once upon a time, Republicans had a set of clear promises about what they called “tax reform.” The idea was to produce a simpler tax code, with fewer brackets and fewer deductions so that a typical individual could fill it out on a postcard.

The goal was to cut tax rates without reducing government revenue because loopholes would be closed. From the beginning, they were counting in part on economic growth to make up the difference, but they said they would rely on serious, third-party analysis of the impacts.

“Not economic growth judged by us,” Rep. Kevin Brady (R-TX), the Chair of the House’s tax-writing committee, told Vox in March, “but by the independent Joint Committee on Taxation.”

And of course it wasn’t going to be a bonanza for the rich. Trump went so far as to promise that the rich wouldn’t benefit “at all” from his plan, and he certainly swore repeatedly that he would not personally benefit.

Neither the House nor the Senate came within a trillion dollars of hitting Brady’s deficit target, so the conference committee charged with reconciling the bills didn’t bother to wait for a dynamic score at all, and both houses are expected to pass the bill before the JCT can finish its analysis. The House bill slashed the top tax rate a little and the Senate bill slashed it a little more, so the conference committee compromised on a bigger rate cut than either had proposed.

Meanwhile, after all the months of work, Republicans ultimately settled on not actually eliminating any significant deductions or loopholes after all.

[Continues, and it just gets uglier.]

[Tero]

Sloppy planning causes delay. Whole thing is without proof that trickle down does anything to economy:
https://www.politico.com/story/2017/12/ ... tes-304908

[L'Emmerdeur]

In fact the real world evidence is that it does little at best.

Bruce Bartlett, a former aide to tax-cut advocate Rep. Jack Kemp, says the ‘81 tax cut made sense: The top individual tax rate was 70 percent — far above the current 39.6 percent — and the economy, unlike the relatively healthy one today, had endured a long era of stagnation.

But Bartlett, an official in the Reagan and George H.W. Bush administrations, has lost faith in tax cuts. In 1986, he notes, the United States slashed the corporate tax rate from 46 percent to 34 percent. Yet wages fell. Likewise, President George W. Bush’s tax cuts in 2001 and 2003 produced one of the weakest economic expansions in American history: The Bush tax cuts were still in place when the economy sank into the Great Recession of 2007-2009.

And Kansas has just finished a failed experiment in tax cutting. After Gov. Sam Brownback pushed through big tax cuts in 2012 and 2013, the payoff was underwhelming at best: Tax collections fell shy of expectations, triggering a budget crisis. In June, Kansas passed a big tax increase (over Brownback’s veto), leading Moody’s Investors Services to upgrade the outlook for the state’s credit rating.

Owen Zidar, an economist at the University of Chicago’s outlook for Booth School of Business, says his own research suggests that tax cuts are more effective when they target lower-income taxpayers, who are likelier than the rich to spend a tax-cut windfall.

In addition, Bartlett and other critics say, now is an especially inauspicious time for sharp tax cuts. The economy is enjoying the third-longest economic expansion on record and doesn’t need much help. Unemployment, at 4.1 percent, is extremely low, and many employers are already struggling to fill job openings. In a healthy economy, sharp tax cuts can also raise the risk of high inflation.

[Brian Peacock]

And if it doesn't work the wealthy will only he able to secure their income streams by convincing the gullible that the cuts didn't go far enough.

[Tero]

Trump tax law applies to 2018 earnings immediately. The law does not affect your 2017 filing in April very much.
https://www.google.com/amp/amp.timeinc. ... cuts-start

[Tero]

Tax calculator
http://www.cnn.com/2017/12/13/politics/ ... index.html

[Tero]

Trump tax bill gives our jobs to robots:
Corporations don’t invest in human labor if the same investment in technology, particularly in software, will yield greater productivity. History shows that when given the choice, corporations virtually always opt to invest their cash in machines operated by fewer high-skilled workers, rather than in more medium-skilled workers who could produce the same amount.
https://www.wired.com/story/sorry-congr ... he-future/

[Tyrannical]

Tax reform is a done deal.

I read somewhere that an estimated ~95% of taxpayers will take that standard deduction instead of itemized. That's really good tax simplification if it is true. Middle class (and others) should start to see a bigger (or smaller) paycheck within the next three months.

I expect to see a lot of:
I hate Trump but........ Economy is good, taxes down, wages up, curse you Trump

.

[pErvinalia]

Trump tax bill gives our jobs to robots:
Corporations don’t invest in human labor if the same investment in technology, particularly in software, will yield greater productivity. History shows that when given the choice, corporations virtually always opt to invest their cash in machines operated by fewer high-skilled workers, rather than in more medium-skilled workers who could produce the same amount.
https://www.wired.com/story/sorry-congr ... he-future/

Good. As long as they implement a UBI to cover those job losses.

[Tero]

Commondreams:
This is the GOP's Ghost of Christmas Future," he said. "They will be replaced, and their abominable legislation will be repealed."

"Americans won't forget," said Frank Clemente, executive director of AFT, in a statement. "They'll remember who swindled them to give tax breaks to billionaires and corporations that ship jobs offshore. They'll remember who is taking away healthcare from 13 million people while lowering taxes for Donald Trump and his heirs."

[Hermit]

"Americans won't forget," said Frank Clemente, executive director of AFT, in a statement. "They'll remember who swindled them to give tax breaks to billionaires and corporations that ship jobs offshore. They'll remember who is taking away healthcare from 13 million people while lowering taxes for Donald Trump and his heirs."

Optimist. Plebs all over the world have repeatedly fallen for the "trickle down" con job. I see nothing that would make us react differently in the future.

[Sean Hayden]

It doesn't matter if they don't forget. We didn't vote for this guy, but there he is anyway. I say we split up, my side keeps the nukes.

[Brian Peacock]

And the other lot gets The Wall..... The Beautiful Wall.