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“Radically Redistribute Income Upwards”: Paul Ryan’s Plan For Everything: Hide The Numbers

Before Donald Trump started baying at the moon, and before Ted Cruz launched pointless shutdowns, the state of the art in Republican ideological extremism was Paul Ryan and his Ayn Rand–inspired vision of government. Because Ryan is a practical extremist rather than an impractical one, and because he avoids displays of racism and misogyny, he has been cast as his party’s sensible alternative. Ryan has built his party’s agenda, which Republicans have rolled out in stages, achieving mostly adulatory coverage. USA Today’s lead earlier this month struck the typical tone: “Speaker Paul Ryan on Tuesday started rolling out policy prescriptions that he says are part of a positive Republican vision that will show Americans what the party is for, rather than focusing on what it’s against.” But all Ryan’s agenda would actually do is radically redistribute income upward on a historic and unprecedented scale.

House Republicans have released their plan in stages, and today they release their proposal to slash taxes. It contains all of the traditional elements of supply-side economics: The top tax rate would be cut to 33 percent, lower than it was under George W. Bush; taxes on capital gains and dividends would fall; and tax on estates — which currently applies only to inheritances of more than $10 million per couple — would be abolished. However, it is impossible to quantify just how enormous of a boon this would provide to the most affluent. Republicans have omitted enough key details to prevent a full measurement of the proposal’s effects. “The plan isn’t detailed enough for a complete nonpartisan congressional analysis to verify the impact on the budget and on households,” reports The Wall Street Journal.

The same holds true of the House Republican plan to repeal and replace Obamacare. As with taxes, the overall direction of the policy is clear: It would strip away insurance from tens of millions of people, impose higher costs on people who are poor and sick, and provide lower costs for the affluent and healthy. But just how much cannot be calculated, because Republicans have, again, omitted the key details. “House Republicans have estimates from the Congressional Budget Office on how their health care plan, released Wednesday, would affect the federal deficit,” reports Caitlin Owens. “They’re just not releasing them.” Hard numbers, once again, would reveal all of the painful trade-offs in the Republican plan.

The same dynamic is also true of Ryan’s much-hyped plan to overhaul poverty spending. House Republicans need to cut hundreds of billions of dollars in spending for the poor, since doing so is the only way to reconcile their commitment to deep tax cuts, higher defense spending, and maintaining retirement benefits for people age 55 and up. But Ryan also needs to pose as an earnest friend of the poor, not as the champion of the upward income distribution his policies would actually bring about. So the “anti-poverty” plan relies on vague language and pixie-dust promises about rooting out unstated waste. “Many of the specific policy prescriptions aimed at addressing the problems identified in the paper were left out because members couldn’t agree on details such as how to prevent waste and fraud, according to aides,” report Kelsey Snell and Mike DeBonis.

Of course, if Trump manages to win, Ryan will claim that the public has given him a mandate for his ideas, and will quickly speed its passage through Congress. But getting to the point where they can do so requires hiding the numbers for as long as possible.

 

By: Jonathan Chait, Daily Intelligencer, New York Magazine, June 27, 2016

June 28, 2016 Posted by | House Republicans, Paul Ryan, Tax Cuts for The Wealthy | , , , , , , | 1 Comment

“They Haven’t Learned Yet”: Republican’s Love Affair With Voodoo Economics

In a moment of sanity, George HW Bush once called Ronald Reagan’s proposal for tax cuts “voodoo economics.” The idea was that tax cuts for the wealthy would somehow “trickle down” to the rest of us and grow the economy. Bush eventually had to embrace the idea as Reagan’s vice president, but later as president himself, he paid the price when he had to abandon his “no new taxes” pledge because the tax cuts accomplished nothing more than to blow up the federal budget deficit.

Along came President Clinton, who raised taxes on the wealthy (something that seems to have been forgotten in this presidential primary) and we witnessed the first budget surplus in generations. Next came George W. Bush, who cut taxes with the same result – a huge budget deficit compounded by wars and the Great Recession. At that point we were treated to the “wisdom” of VP Dick Cheney who quipped that “deficits don’t matter.” Of course that only lasted until Barack Obama became president and all of a sudden it became a national crisis. Eventually President Obama raised taxes on the wealthy once again, and cut the deficit by two thirds.

At some point, one has to wonder how long Republicans can continue their love affair with trickle-down economics. And yet all three presidential candidates continue to espouse the idea that tax cuts for the wealthy will make the economy grow.

The failure of trickle-down has been demonstrated in states as well as at the national level. We’ve all watched as the Republican governors of Kansas, Louisiana and Wisconsin failed to grow their economies by providing massive tax cuts to the wealthy. The most extreme case for years now has been Gov. Brownback in Kansas.

Brownback took office on a pledge to make Kansas friendlier to business and successfully sought to cut the top personal income tax rate by 29 percent and exempt more than 330,000 farmers and business owners from income taxes. The moves were popular in a Legislature where the GOP holds three-quarters of the seats.

Rather than grow the economy, that resulted in things like the following:

Last month, Brownback ordered $17 million in immediate reductions to universities and earlier this month delayed $93 million in contributions to pensions for school teachers and community college employees. The state has also siphoned off more than $750 million from highway projects to other parts of the budget over the past two years.

With the 2016 election on the horizon and the state budget still in crisis, it looks like some Republicans may be questioning their commitment to voodoo economics.

Now many of the same Republicans who helped pass Brownback’s plan are in open revolt, refusing to help the governor cut spending so he can avoid rolling back any of his signature tax measures.

If Brownback won’t reconsider any of the tax cuts, they say, he will have to figure out for himself how to balance the budget in the face of disappointing revenue.

“Let him own it,” Republican Rep. Mark Hutton said. “It’s his policy that put us there.”

While Rep. Hutton’s remarks won’t win him a “profile in courage” award, the Republican proposal at this point – which Brownback rejected – is to repeal the personal income tax break for farmers and business owners to raise an additional $200 million to $250 million a year.

George HW Bush knew that trickle-down was just another name for voodoo economics. Now it sounds like a few Republicans in Kansas are figuring that out. But I don’t hold out a lot of hope that this kind of awareness will be contagious in the GOP. After all, acquaintance with facts and reality is clearly not their strong suit these days.

 

By: Nancy LeTourneau, Political Animal Blog, The Washington Monthly, April 19, 2016

April 21, 2016 Posted by | Sam Brownback, Tax Cuts for The Wealthy, Voo Doo Economics | , , , , , , | 1 Comment

“Republicans To Wealthy; We Just Can’t Quit You”: Giving Equal Benefits To Everyone Would Be Ridiculous

Any marginally aware citizen is familiar with what I like to call the Four Pillars of Conservatism: low taxes, small government, strong defense, and traditional values. The simplicity and clarity of these ideas allows any Republican anywhere to move into politics with a ready-made ideological program, and as long as they stay abstract, it’s reasonably popular. It’s only when you start to get into specifics that the agenda becomes problematic.

The trick is that if you’re proposing something unpopular, to speak about it in the most abstract terms possible. “Low taxes” sounds great, because who wouldn’t like to pay less in taxes? The trouble is that what Republicans actually want is to cut taxes for the wealthy. They’re perfectly happy to cut taxes for other people if the opportunity presents itself, but the value of tax cuts for the wealthy is an absolutely foundational belief.

They know, however, that most Americans don’t agree. So when they talk about taxes, they’re supposed to be circumspect and careful, answering questions about tax cuts for the wealthy by saying that tax cuts in general are good for everybody. Which is why it’s so surprising when one of them is candid, as House Ways and Means Committee chairman Kevin Brady was in an interview with John Harwood published today.

Brady, who is in charge of tax policy, just comes out and says that Republicans won’t accept any tax reform that doesn’t include reducing the top income tax rate. All that talk of making the tax code simpler is all well and good, but there’s one thing they will absolutely not compromise on, and that’s the top rate, which is currently paid by those making over $415,000 a year:

HARWOOD: Could you envision a tax reform that you could go along with that had many elements that you liked that did not decrease the top rate?

BRADY: That’d be difficult to accept, because I think that holds back investment, both by businesses, small businesses, and by families.

HARWOOD: Because there are some conservatives who are arguing that in the environment that we’re in now, that conservative tax reformers ought to focus on things other than the top rate.

BRADY: I’d have to disagree, and here’s why. Besides businesses investing, when individuals, after they make that dollar, they have three choices. They can spend it, they can save it, which is good as well, but they can reinvest it back in the economy. And earners, not just high earners, all along the scale do that. I want to encourage families and environments to do more of that. And so on that side of the ledger, let’s look at those pro-growth packages.

There’s a rationale here, which is that when you give rich people more money, they’re more likely to invest it, which helps grow the economy over the long run. But conservatives sell this idea not as a long-term way to sustain investment, but as a short-term strategy to bring prosperity to all. This year, every Republican running for president essentially pledged to bring back George W. Bush’s economic policies. There were differences in the details of their plans, but all of them centered on large tax cuts for the wealthy, and all promised that the effects would be spectacular.

But here on Planet Earth, there is zero real-world evidence that large tax cuts for the wealthy super-charge the economy. If it were true, then Bush would have been the most economically successful president in American history. But he was actually one of the worst, and when it comes to job creation, the last two presidents who raised taxes on the wealthy — Bill Clinton and Barack Obama — were among the best. The economy created 22 million jobs while Clinton was president, and Obama is on pace to see around 16 million new jobs created since the trough of the Great Recession in his first months in office (I discussed this at length here — with charts!).

Meanwhile, media coverage continues to suggest that Paul Ryan represents some kind of sober alternative to the presidential candidates. But he has long advocated slashing the top rate from its current 39.6 percent down to 25 percent, which would represent an enormous giveaway to the wealthy (he says it’ll be paid for by “cutting loopholes,” which are never specified). Just a month ago, Ryan was asked whether he might consider a plan that’s “distributionally neutral,” in other words, one that gives equal benefits to every income group. Here’s what Ryan said:

So I do not like the idea of buying into these distributional tables. What you’re talking about is what we call static distribution. It’s a ridiculous notion. What it presumes is life in the economy is some fixed pie, and it’s not going to change. And it’s really up to government to redistribute the slices more equitably. That is not how the world works. That’s not how life works. You can shrink or expand the economy, and what we want to maximize is economic growth and upward mobility so that everybody can get a bigger slice of the pie.

To translate: Giving equal benefits to everyone would be ridiculous. The only way to expand the economy for all is to shower benefits on the rich. But most people don’t quite understand what Ryan is talking about; all they hear is that he wants more pie for everybody. That’s how you’re supposed to talk about taxes.

And this is the key thing to understand: no matter which Republican ends up being the presidential nominee, cutting taxes for the wealthy will be at the absolute top of the agenda. Even Donald Trump, who has been happy to buck Republican orthodoxy on a variety of issues, issued a tax plan the greatest benefits of which went to the wealthy — just like every other candidate.

In this election, just like in every other election, Democrats will charge that Republicans only want to help the rich. It’s an effective attack, mostly because it’s true. Or to be more generous, Republicans want to help everyone, it’s just that they really want to help the rich, and they see helping the rich as the best way to help everyone else. But it’s possible that the Democratic attack could be particularly potent this year in winning over independents and even a few Republicans. The Republican Party has spent the last year in a brutal argument about their own perfidious elites, who supposedly look with scorn on the masses in their party. And after all that, the centerpiece of their economic plans for the future is still cutting taxes at the top.

When a party advocates something that politically dangerous, it isn’t because they’re stupid. It’s because they believe in it, down the marrow of their bones.

 

By: Paul Waldman, Senior Writer, The American Prospect; Contributor, The Plum Line Blog, The Washington Post, April 12, 2016

April 16, 2016 Posted by | Conservatism, Kevin Brady, Tax Cuts for The Wealthy | , , , , , , , | 1 Comment

   

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