“Just Smoke And Mirrors”: Trump Soaking The Rich? Eh, Not Really
So now Donald Trump’s gone and done something serious. Bummer.
But actually, don’t sweat it, because if you look a little more closely and the tax plan he unveiled Monday, you’ll see it isn’t very serious at all: one more piece of evidence that to Republicans, when it comes to tax cuts, deficits truly don’t matter. He’d reduce the top marginal rate to 25 percent on dollars earned above $300,000 (for a married filer); it’s now 39.6 percent on dollars earned above $450,000. And he’d dramatically increase the number of people who pay no tax at all (but I thought Republicans were angry at these people and wanted them to pay more!).
The nonpartisan tax experts haven’t run the numbers yet, but they will soon, assuming there’s even enough detail in the proposal for them to try, and I expect that when they do, we’ll see what we always see with GOP tax proposals—it won’t add up, because they never do. And when confronted with these numbers, Trump, like Mitt Romney and George W. Bush and a parade of Republican candidates before him, will say these geeky little experts don’t know what they’re talking about because he’ll unleash the growth that’s been suffocated for the last eight years and the federal coffers won’t even be able to hold all the revenue that will roll in and life will be a dream.
Yada yada yada. But there is something interesting about Trump’s proposal: He wants to eliminate the carried interest provision that gives the hedge-fund guys a much lower tax rate than the rest of us. Right now, they often earn many millions every year and supposedly pay a rate of around 24 percent.
Jeb Bush is for doing this too. So that’s two major GOP candidates (we still calling Bush major?) who are for a tax increase. And not just any old tax increase. One that would soak the rich! Isn’t this awesome?
Actually, no. Well wait. Yeah, I mean, ever since Warren Buffet put it so starkly a few years ago by saying how ridiculous it is that he pays a lower tax rate than his secretary, sure, fixing this has been a matter of basic decency. The loophole is an absurd scam. It would be great to close it on principle.
But the problem is that it would make almost no difference to the United States Treasury. According to the Tax Foundation, closing the loophole for hedge-fund managers and private-equity partners, the two groups who take advantage of it now, would bring in a paltry $1.3 billion a year in revenue. By comparison, the estate tax that Trump and Bush both promise to eliminate brings in around $24 billion a year.
And in fact, Trump’s loophole fix wouldn’t bring in even $1.3 billion, because there’s a key difference between his proposal and Bush’s. As noted above, the lower rate is paid by two groups, hedge-fund managers and private-equity partners. Trump would have the new, higher rate apply only to hedge-funders, not PE people. Bush’s would make people in both categories pony up. Trump hasn’t explained why, but I imagine he would say that PE people are making longer-term investments that at least (hopefully) contribute to the economy, while hedge-funders just traffic in short-term profit maximization. They’re the people he means when he says things like these guys just push paper around.
So with Trump’s plan at least, we’re talking about a few hundred million dollars a year into the treasury. Meanwhile, he cuts the top rate from 40 to 25 percent. Bush would cut the top rate to 28 percent. Both would also reduce the top capital gains tax rate by a few points, would completely eliminate the inheritance tax, and would do away with something called the Alternative Minimum Tax, which limits the extent to which high-income earners can reduce their tax bills through deductions and exemptions. There’s a lot more along these lines. In fact, Josh Barro of The New York Times wrote that Trump’s proposal would still cut the tax bills of many hedge-funders because it would not subject all their income to the 39.6 percent rate.
Okay, let’s get out of the weeds now. The point is this. Because the carried-interest loophole gets a lot of press, and because nobody likes hedge-fund guys to begin with, lots of even pretty well-informed people think that closing this loophole constitutes the wielding of a mighty sword of economic justice. It is that in principle, but in practice it’s nothing. Comparative pennies in the grand scheme of things. So Republicans like Trump and Bush can go around saying “hey, look at me, I wanna tax the rich guys!”, and the media will buy it, while in fact they’re doing the opposite.
This is why Grover Norquist of Americans for Tax Reform, the leading conservative cop on the tax-increase beat, is just fine with all this. He gets the perception. “Doing carried-interest [repeal] permits rate reduction,” Norquist told me Monday. “So I’d say that’s a fine change.”
Democrats are partly to blame for how poorly all this is understood. Barack Obama and Hillary Clinton and Bernie Sanders and (almost) all of them thunder about the Buffett Rule and the nasty hedge-funders because they’re an easy mark. But they don’t do a very good job of going on to explain that eliminating the loophole doesn’t amount to much. Well I say it’s time to start explaining.
By: Michael Tomasky, The Daily Beast, September 28, 2015
“Fire And Brimstone Coming Down From The Sky”: Scott Walker Vows To ‘Wreak Havoc’ On Washington; As If That Would Be A Good Thing
Can one candidate steal adopt another candidate’s tone and thereby revive his struggling campaign? Scott Walker, currently languishing at around four percent in Republican primary polls, is going to try.
So today, Walker will deliver a speech meant to capture the prevailing sentiment in his party, by means of a promise to “wreak havoc” on the nation’s capital. That may sound like a joke, but it isn’t. Zeke Miller reports:
“To wreak havoc on Washington, America needs a leader with real solutions,” Walker will say. “Political rhetoric is not enough — we need a plan of action. Actions speak louder than words. I have a plan to move this country forward. To wreak havoc on Washington, America also needs a leader who has been tested. I have been tested like no one else in this race. We passed those tests and now, I am ready to lead this exceptional country.”
Perhaps in the speech’s exciting denouement, Walker will quote “Ghostbusters” and promise “fire and brimstone coming down from the sky, rivers and seas boiling, 40 years of darkness, earthquakes, volcanoes, the dead rising from the grave, human sacrifice, dogs and cats living together, mass hysteria!”
Do Republican voters really want Washington to be overtaken by “havoc”? Some politicians say they’ll reform Washington, or clean it up, or change the way it does business. But havoc? It certainly shows that Walker is not going to bother telling Republican voters that governing is complicated, and you need someone who can navigate the processes and institutions of Washington if you’re going to achieve the substantive goals you and your party share.
Which is perhaps understandable, given the fact that in current polls, if you combine the support for Donald Trump and Ben Carson — the two candidates with zero government experience, who have never run for office before, and who promise that all the problems we face have easy, simple solutions — you get about 50 percent of the Republican electorate.
So Walker, whose fall has coincided with Trump’s rise, seems ready to try anything to emulate the current frontrunner. There’s precedent for that — in past primaries, when one candidate has won support with a particular message or style, other candidates have often tried to adopt some of it. In 2000, when John McCain was successfully portraying himself as a reformer, George W. Bush started calling himself “a Reformer With Results,” and it actually seemed to work. It was possible because it’s only a couple of steps from “reformer” to “reformer with results,” so voters could decide that while they liked McCain’s reform record, Bush offered something similar, but even better.
Walker’s theory seems to be that there are voters now supporting Donald Trump who’ll say, “I like that Trump is smashing things, so if Scott Walker wants to utterly lay waste to Washington, DC, sign me up!” This seems implausible, to say the least.
Earlier this week, the National Review published an article entitled “Scott Walker: What Went Wrong?“, which sums up the prevailing sentiment among Republicans about the Wisconsin governor. Before the race began in earnest, Walker was the thinking person’s choice to become the Republican nominee, in large part because he offered something for everyone. His union-busting and tax-cutting would appeal to economic conservatives, his evangelical roots would appeal to social conservatives, as a governor he could argue that he has executive experience, and his battles with Democrats in his state showed him to be the kind of partisan warrior partisans like. Many commentators, myself included, thought this would be a powerful combination. We put Walker in the top tier of Republican contenders, along with Jeb Bush and Marco Rubio.
While there’s still plenty of time before the voting starts and things could (and probably will) change, for now that assessment doesn’t look so hot. Trump, on the other hand, has demonstrated the degree to which Republican voters hold not only the federal government but their own party’s leaders in contempt. As he’d say, they’re losers, politicians who have been making promises to their constituents for years (we’re going to repeal Obamacare any day now!) but have been utterly unable to deliver. If you want to capitalize on that sentiment, you can do it substantively, by moving your positions on some important issues, or you can do it stylistically, which is what Walker looks to be trying to do.
The degree to which Trump’s success would influence the other candidates is something we’ve been trying to figure out for a while now. Would he pull them to the right on immigration as they tried to capture some of his voters, or would they present themselves as more thoughtful and reasonable, to heighten the contrast with Trump? The question could matter a great deal in the general election (presuming Trump is not the nominee), because if they choose to be more like Trump, they’ll harm themselves among the voters they’d need next fall. But it may not be possible even in the primaries to win over Trump’s voters by trying to be more like him. No matter what you promise to do to Washington, you just can’t out-Trump Trump.
By: Paul Waldman, Senior Writer, The American Prospect; Contributor, The Plum Line Blog, The Washington Post, September 9, 2015
“Trump Is Right On Economics”: Jeb Relying On Magic Of Tax Cuts To Double The Growth Rate Is Pure Supply-Side Voodoo
So Jeb Bush is finally going after Donald Trump. Over the past couple of weeks the man who was supposed to be the front-runner has made a series of attacks on the man who is. Strange to say, however, Mr. Bush hasn’t focused on what’s truly vicious and absurd — viciously absurd? — about Mr. Trump’s platform, his implicit racism and his insistence that he would somehow round up 11 million undocumented immigrants and remove them from our soil.
Instead, Mr. Bush has chosen to attack Mr. Trump as a false conservative, a proposition that is supposedly demonstrated by his deviations from current Republican economic orthodoxy: his willingness to raise taxes on the rich, his positive words about universal health care. And that tells you a lot about the dire state of the G.O.P. For the issues the Bush campaign is using to attack its unexpected nemesis are precisely the issues on which Mr. Trump happens to be right, and the Republican establishment has been proved utterly wrong.
To see what I mean, consider what was at stake in the last presidential election, and how things turned out after Mitt Romney lost.
During the campaign, Mr. Romney accused President Obama of favoring redistribution of income from the rich to the poor, and the truth is that Mr. Obama’s re-election did mean a significant move in that direction. Taxes on the top 1 percent went up substantially in 2013, both because some of the Bush tax cuts were allowed to expire and because new taxes associated with Obamacare kicked in. And Obamacare itself, which provides a lot of aid to lower-income families, went into full effect at the beginning of 2014.
Conservatives were very clear about what would happen as a result. Raising taxes on “job creators,” they insisted, would destroy incentives. And they were absolutely certain that the Affordable Care Act would be a “job killer.”
So what actually happened? As of last month, the U.S. unemployment rate, which was 7.8 percent when Mr. Obama took office, had fallen to 5.1 percent. For the record, Mr. Romney promised during the campaign that he would get unemployment down to 6 percent by the end of 2016. Also for the record, the current unemployment rate is lower than it ever got under Ronald Reagan. And the main reason unemployment has fallen so much is job growth in the private sector, which has added more than seven million workers since the end of 2012.
I’m not saying that everything is great in the U.S. economy, because it isn’t. There’s good reason to believe that we’re still a substantial distance from full employment, and while the number of jobs has grown a lot, wages haven’t. But the economy has nonetheless done far better than should have been possible if conservative orthodoxy had any truth to it. And now Mr. Trump is being accused of heresy for not accepting that failed orthodoxy?
So am I saying that Mr. Trump is better and more serious than he’s given credit for being? Not at all — he is exactly the ignorant blowhard he seems to be. It’s when it comes to his rivals that appearances can be deceiving. Some of them may come across as reasonable and thoughtful, but in reality they are anything but.
Mr. Bush, in particular, may pose as a reasonable, thoughtful type — credulous reporters even describe him as a policy wonk — but his actual economic platform, which relies on the magic of tax cuts to deliver a doubling of America’s growth rate, is pure supply-side voodoo.
And here’s what’s interesting: all indications are that Mr. Bush’s attacks on Mr. Trump are falling flat, because the Republican base doesn’t actually share the Republican establishment’s economic delusions.
The thing is, we didn’t really know that until Mr. Trump came along. The influence of big-money donors meant that nobody could make a serious play for the G.O.P. nomination without pledging allegiance to supply-side doctrine, and this allowed the establishment to imagine that ordinary voters shared its antipopulist creed. Indeed, Mr. Bush’s hapless attempt at a takedown suggests that his political team still doesn’t get it, and thinks that pointing out The Donald’s heresies will be enough to doom his campaign.
But Mr. Trump, who is self-financing, didn’t need to genuflect to the big money, and it turns out that the base doesn’t mind his heresies. This is a real revelation, which may have a lasting impact on our politics.
Again, I’m not making a case for Mr. Trump. There are lots of other politicians out there who also refuse to buy into right-wing economic nonsense, but who do so without proposing to scour the countryside in search of immigrants to deport, or to rip up our international economic agreements and start a trade war. The point, however, is that none of these reasonable politicians is seeking the Republican presidential nomination.
By; Paul Krugman, Op-Ed Columnist, The New York Times, September 7, 2015
“From Deep Inside The Fold”: Donald Trump Isn’t A Republican Traitor; He’s Giving Primary Voters Exactly What They Want
As panic sets in among Republicans at the prospect of Donald Trump either winning the GOP nomination, dividing the right by bolting the party to run as an independent, or merely trashing the rest of the field without restraint for the next six months before imploding, a narrative is taking hold among conservatives that’s equal parts self-protective and self-pitying. Trump, in this telling, isn’t really a Republican at all. He’s some extra-partisan saboteur who’s looking to blow up the GOP for his own purposes.
It’s true that Trump’s issue matrix (very far right on immigration, more centrist or pragmatic on entitlements and taxes, hawkish on foreign policy while denouncing the Iraq debacle without hedging) is not one that’s typically embraced by Republican presidential contenders. Yet conservatives are being too easy on themselves when they treat Trump as some force of nature that came out of nowhere or an anti-Republican conspiracy hatched in cahoots with the Clintons.
Trump may not precisely endorse the constellation of policies favored by either the GOP establishment or its reformist wing. But he’s not an ideological apostate arbitrarily endorsing idiosyncratic positions with no plausible connection to the conservative movement. On the contrary, he’s pushing a program that amounts to a distinctively Republican heresy.
Let’s start with immigration. It’s easy for members of the Republican establishment to see Trump’s position as anathema on this issue because they tend to oppose immigration restrictions — because they’re cosmopolitan elites, because they think the party desperately needs Hispanic votes to remain competitive, and because they’re beholden to a donor class that overwhelmingly favors allowing low-wage workers into the country.
But a party is nothing without voters, and the GOP’s overwhelmingly white and disproportionately rural voters — the actual foot soldiers of the party — take a polar opposite view on the issue. It was their revolt that sank immigration reform after the 2012 election, and it’s their support that is buoying Trump’s campaign. The establishment might not like it, but the fact is that Trump is never more in line with Republican voters than when he rails against undocumented immigrants and their ”anchor babies.”
Trump is exploiting another tension between the GOP elite and the grassroots on issues of tax cuts and government spending on entitlements. The Republican establishment is relatively consistent in its hostility to big government, preferring to cut taxes along with spending, with the latter ideally accomplished by such reforms as partial privatization of Social Security and the transformation of Medicaid into a program that hands out block grants.
The Republican base is far less consistent. It wants to cut taxes, and it likes speeches that rail against government spending. But when it comes to making real-world spending cuts, GOP voters (who tend to be older than Democrats and therefore more dependent on government programs that aid the elderly) agree with the person who famously (and absurdly) declared, ”Keep your government hands off my Medicare!” The grassroots want a free lunch, in other words, which is one important reason why the federal budget deficit has soared under every Republican president since Ronald Reagan.
Add in a growing willingness on the right to see the rich pay more in taxes, and Trump’s seemingly off-sides positioning begins to make sense in Republican terms. Yes, the mix of support for tax cuts and hikes, spending cuts and entitlement protections that one finds in the GOP base is contradictory, even incoherent. But it’s where conservative voters are, and Trump is the one candidate promising to give them exactly what they want.
Then there’s Trump’s blustery approach to foreign policy and trade relations: ”Elect me,” he seems to be saying, ”and I’ll be the toughest negotiator you’ve ever seen. I’ll get my way by sheer force of indefatigable will.” But of course, the Republican toughness fetish set in a long time before Trump. Ever since the Sept. 11 attacks and George W. Bush’s cowboy swagger and “Dead or Alive” threats to Osama bin Laden, the GOP has been obsessed with projecting strength — and assuming that the U.S. is bound to get its way if only the president unapologetically drives the hardest bargain at every moment. Trump is merely proving to be marginally more convincing than his rivals on this score because he’s been cultivating an omniconfident image in the public eye for decades.
Finally, we have Trump’s campaign slogan: ”Make America Great Again!” Calling the country ”great” is as American as apple pie, of course, but it was given new force in the late 1990s by the second-generation neocons, who championed an ideology they called National Greatness Conservatism. By now, nothing could be more commonplace than for a Republican to praise America’s super-duper, better-than-everyone-else exceptionalism.
Trump’s only modest innovation is to add the word ”again,” which grows out of the discontent with Barack Obama that’s laced through every speech Ted Cruz has ever given. Turn on right-wing talk radio any day of the year and you’ll hear hosts railing against American decline, which (as Charles Krauthammer put it during Obama’s first term) is a deliberate ”choice” that the current president is actively, even enthusiastically, pursuing. The amazing thing is that no one else thought to grab (and trademark) this GOP cliché for a campaign slogan before now.
Donald Trump might scramble the pieces of the Republican coalition and emphasize different policies than the party’s leadership would prefer, but he’s not a traitor to the GOP. He’s a heretic — one whose heterodoxy comes from deep inside the Republican fold.
By: Damon Linker, The Week, September 1, 2015
“Corporate Wage Hike Subsidities”: CEOs Call For Wage Increases For Workers! What’s The Catch?
Peter Georgescu has a message he wants America’s corporate and political elites to hear: “I’m scared,” he said in a recent New York Times opinion piece.
He adds that Paul Tudor Jones is scared, too, as is Ken Langone. And they are trying to get the Powers That Be to pay attention to their urgent concerns. But wait — these three are Powers That Be. Georgescu is former head of Young & Rubicam, one of the world’s largest PR and advertising firms; Jones is a quadruple-billionaire and hedge fund operator; and Langone is a founder of Home Depot.
What is scaring the pants off these powerful peers of the corporate plutocracy? Inequality. Yes, amazingly, these actual occupiers of Wall Street say they share Occupy Wall Street’s critical analysis of America’s widening chasm between the rich and the rest of us. “We are creating a caste system from which it’s almost impossible to escape,” Georgescu wrote, not only trapping the poor, but also “those on the higher end of the middle class.” He issued a clarion call for his corporate peers to reverse the dangerous and ever-widening gulf of income inequality in our country by increasing the paychecks of America’s workaday majority. “We business leaders know what to do. But do we have the will to do it? Are we willing to control the excessive greed so prevalent in our culture today and divert resources to better education and the creation of more opportunity?”
Right on, Peter! However, their concern is not driven by moral outrage at the injustice of it all, but by self-interest: “We are concerned where income inequality will lead,” he said. Specifically, he warned that one of two horrors awaits the elites if they stick to the present path: social unrest (conjuring up images of the guillotine) or (horror of horrors) “oppressive taxes” on the super rich.
Motivation aside, Georgescu does comprehend the remedy that our society must have: “Invest in the actual value creators — the employees,” he writes. “Start compensating fairly (with) a wage that enables employees to share amply in productivity increases and creative innovations.” They have talked with other corporate chieftains and found “almost unanimous agreement” on the need to compensate employees better.
Great! So they’ll just do it, right? Uh… no. But he says he knows just the thing that’ll jar the CEOs into action: “Government can provide tax incentives to business to pay more to employees.” That’s his big idea. Yes, corporate wage-hike subsidies. He actually wants us taxpayers to give money to bloated, uber-rich corporations so they can pay a dab more to their employees!
As Lily Tomlin said, “No matter how cynical you become, it’s never enough to keep up.”
First of all, Georgescu proposes this tax giveaway to the corporate elite could “exist for three to five years and then be evaluated for effectiveness.” Much like the Bush tax cuts that helped drive the economic divide, once the corporate chieftains get a taste for a government handout, they will send their lawyers and lobbyists to Washington to schmooze congresscritters into making the tax subsidy permanent.
Secondly, paying to get “good behavior” would reward bad behavior, completely absolving those very CEOs and wealthy shareholders of their guilt in creating today’s gross inequality. After all, they are the ones who have pushed relentlessly for 30 years to disempower labor unions, downsize and privatize the workforce, send jobs offshore, defund education and social programs, and otherwise dismantle the framework that once sustained America’s healthy middle class. These guys put the “sin” in cynical.
If we want to fix income inequality, Larry Hanley, president of the Amalgamated Transit Union, has a solution. In response to Gerogescu’s offer of charity to corporations, Hanley wrote: “Strengthen labor laws, and we can have democracy and equality again.”
By: Jim Hightower, Featured Post, The National Memo, August 26, 2015
Share This Blog
Unknown Feed- An error has occurred; the feed is probably down. Try again later.
mykeystrokes.com 