The Pardu

The Pardu
Watchful eyes and ears feed the brain, thus nourishing the brain cells.
Showing posts with label Supply-side economics. Show all posts
Showing posts with label Supply-side economics. Show all posts

Wednesday, April 26, 2017

Trump Tax Plan? Trickle-Down Again (Video)

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Pacific Standard Mag

The IMF Confirms That ‘Trickle-Down’ Economics Is, Indeed, a Joke

Like, a literal joke.

“money was all appropriated for the top in the hopes it would trickle down to the needy.”
American humorist Will Rogers, who mocked President Herbert Hoover’s Depression-era recovery efforts, saying that “money was all appropriated for the top in the hopes it would trickle down to the needy.” 
At the center of Reagan’s economic doctrine was the idea that economic gains primarily benefiting the wealthy — investors, businesses, entrepreneurs, and the like — will “trickle-down” to poorer members of society, creating new opportunities for the economically disadvantaged to attain a better standard of living. Prosperity for the rich leads to prosperity for all, the logic goes, so let’s hurry up with those tax cuts already.....
Read More (Linked above)

This past January the nation embarked on a tightrope experience of Trump as the 45th President of the nation.  In addition to many promises which equal the carnival barking lies of any cheap traveling carnival, he focused on a couple of promises which carry real danger for the nation. One such promise was the tried and failed Republican paradigm of promulgating tax policies which without question favor wealthy Americans and corporations. While many suspected the worse in a Trump tax plan, It appears Trump and his economic ministers have surprised even their cohorts among the GOP members of Congress.

As Trump was being inaugurated, a few social media and print media sources published articles based on their knowledge of Trump's spoken components of a tax reduction plan. One consideration is certain. I don't believe anyone forecast Trump proposing a tax rate of 15% for taxpayers and corporations.

January 2017

Janaury 2017 Center For Budget Policy Priorities

Trump Tax Plan Gives Big Tax Cut to the Top

House Republican "Better Way" Tax Plan Gives Big Tax Cut to the Top
Ugly, eh? 

Three months later and with Trump's cherish 100-day barometer, Trump has released his tax plan.  Yet, he hasn't released his past taxes for pubic review as has all presidents (back) through Richard Nixon.

Well, here it is (see video below). Trump's tax plan and I will wager not one surprise for those who don't trust Republicans with the US economy. I will also wager there is no surprise Trump's tax plan offers a form of neo-Trickle down (Supply Side) policy which favors the wealthy tax proposal provisions. What should surprise is the audacity to propose such reduced tax rates at a time when it seems Trump is chopping at the bits to engage US forces in wars? Do you recall The George W. Bush Great Recession formula for wrecking the US economy (after Bill Clinton)? The formula was:
1. reduced financial regulation. (Clinton and Bush): Sub-Prime Bubble
2. major tax cuts.
3. two Bush wars. 
The economic world changed as the Bush Bubble came falling down like Bush in the stands at the China Olympics (totally inebriated).

Trump's economic ministers

For those who abstained for viewing the 28-minute video, Kevin Drum developed a piece for Mother Jones with a basic (non-detailed) opinion review. No one has complete details of Trump's tax plan but Drum captured enough of the plan for validation of another trickle-down on steroids plan.

Trump Tax Plan Unveiled
There's a little more than you see in the tweet above:
Three tax brackets instead of seven. However, there's no telling how this affects taxes until Steve Mnuchin tells us where the cutoff points are.
Doubles the personal exemption from $12,000 to $24,000. This will help middle-class families, but it's a little hard to know how much it will help them until we get details on....
Elimination of itemized deductions. Which ones? All of them? Good luck with that. But you can be sure that one of the targets will be the deduction for state income taxes, since that mostly benefits the hated blue states of California and New York.
Elimination of the estate tax. A huge boon for the super-duper rich.
Elimination of the AMT. A huge boon for the rich.
Elimination of Obamacare's 3.8 percent tax on investment. A huge boon for the rich.
Reduce business tax rate to 15 percent. A huge boon for corporations and the rich, especially those with income from pass-through businesses. Apparently Mnuchin doesn't care that Senate rules make this almost literally unpassable.
Tax repatriation holiday. A huge boon for corporations and the rich.
Territorial taxation system for corporations. There's no telling what effect this would have. There are good territorial systems and bad ones. It's all in the details—though it's a pretty good guess that Trump will opt for one of the bad ones.
The driving force behind this appears to be Trump's desire to call this the biggest tax cut in American history. 

As one would expect, CNN loaded its afternoon programming with enough panel members to embarrass an Arkansas farmers chicken coup Another expectation would find a discredited Right Wing economic shill, Steven Moore, sitting on the panel ready to spew GOP talking points (AKA political bull crap). The session ended with another economic contributor taking Moore's Trump facilitation to task. Link.

MMFA on Moore and CNN's poor decision to place him on their shows.

The man is a class facilitator of bad economics.

MSNBC's AIi Velshi also devoted air time to a Republican carry a pail of Trump B/S.  Link.

I digress...back to Trump's tax plan.

We have a president sitting atop a party (while occupying the White House) who has never shown a propensity for caring about Americans who earn less than millions per year. He has surrounded himself with both billionaires (certain advisers and cabinet members) who can't fathom life in America without a country club membership. Actually, I would be surprised if joining Trump's Cabinet came with a prerequisite for membership at Mar-A-Lago.

If you believe Trump and company will propose a tax plan which will be fair and equitable across the economic income strata, you are a Trump enabler.

Monday, October 5, 2015

Tax Policy As Middle Class Killer: Connect The Dots USA, Bush Tax Policy And Reaganomics

I find myself starting another piece with a video. 

The vast majority of readers have no intimate firsthand knowledge of Ronald Reagan's supply side/trickle-down economics. While you may know Trickle-down economics has failed the nation with each Republican Administration since Reagan's terms, you may also side with those who ignore its deleterious impact on the nation and the future.

Trickle-down economics does to work for any American who earns below the Top 20% level. Moreover, it offers obscene earning potential and wealth grow for Top 1% (ers).

An absolute farce economic theory!

Earlier today we published  Tax Cuts? The Trickle-down Gift To The Wealthy  from Connect The Dots USA. 
Let's again visit with Connect on this most critical issue: The Vote. Your vote for the GOP is a vote for trickle-down supply side economic policy.
Supply-side economics
Supply-side economics is a school of macroeconomic thought that argues that overall economic well-being is maximized by lowering the barriers to producing goods and services (the "Supply Side" of the economy). By lowering such barriers, consumers are thought to benefit from a greater supply of goods and services at lower prices. Typical supply-side policy would advocate generally lower income tax and capital gains tax rates (to increase the supply of labor and capital), smaller government and a lower regulatory burden on enterprises (to lower costs).
Ronald Reagan "Fathered' the flaw and failed economic theory deep into the psyche of the GOP. Even today we see and hear nothing other than Reaganomics from potential presidential candidates who speak of tax policy. The super "slick" GOP presidential candidates avoid the issue as if they were avoiding influenza. They know the following graphics truly represent the affects of Reaganomics.

Exhibit I.
On the other hand, the greatest periods of economic progress and stability in our nation have been when unions and the middle class were strong. Wages were fair and on the rise putting money in the hands of Americans who in turn spent that money. This benefited the wealthy and the middle class and thereby the entire nation.
We Grew Together

Exhibit II.
..... the facts of the last 30 years don’t support our national experiment with trickle down economics. What was once a legitimate idea to be tested based on the work of Laffer, has become a laughable mythology of the modern right. 
Since the 1980s, and even dating back to the 60s and 70s, we have been slowly but steadily lowering taxes. Taxes on the wealthy have been reduced almost 60% since 1961. Corporate taxes have been reduced and are now at an effective rate around 15%. In fact, Sally Kohn notes "corporate tax receipts accounted for 30 percent of US federal revenues in the mid-1950s. In 2009, they made up just 6.6 percent of federal revenue streams." While corporate rates have dropped along with the tax rates of the wealthy, the effective rate for everyday Americans has actual increased over that same period.

Income Gains Since 1971

As Connect adroitly shows us, Bush economic policy was the ward of Reaganomics and it failed this nation miserably.

October 4, 2015
You can see here that the Bush tax cuts were skewed heavily to the Top 1% and especially the Top 0.1%. In the first decade, the Bush tax cuts cost $2.5 Trillion in lost revenue and would have cost $3.7 Trillion from 2013 to 2022 (not including debt service). Instead of letting them all expire on Dec 31, 2012, Obama’s 2013 tax deal made permanent all the Bush tax cuts except for the extra tax cuts for the top 0.7% — recouping just $624 Billion over ten years. 
Of course, the GOP tax-cutting obsession is on full display in the GOP presidential primaries. Jeb! wants to double-down on his brother’s tax plan — leading to $3.6 Trillion in additional lost revenue over the next decade. Even taking into account voodoo economics’ “dynamic scoring” nonsense and a pie-in-the-sky 4% GDP growth that Jeb! appears to have pulled out of thin air (or his nether region), you’re still looking at adding $1.6 Trillion to the deficit/debt. And like his brother’s tax cuts, Jeb’s cuts are skewed heavily in favor of the super-rich, with the middle class getting an average 2.9% decrease in taxes and the Top 1% like him getting an average 11.6% decrease. 
Not to be outdone, Trump’s tax plan would drop the top rate down to 25% (from 39.6%) and the corporate rate down to 15% — resulting in a HUGE loss of revenue of $12 Trillion over the next decade. Under this scenario, even his populist plan to go after the hedge fund guys loses any punch — barely increasing the tax on carried interest from the current 23.8% to Trump’s maximum 25%. Factoring in other aspects of Trump’s plan, most hedge fund managers would actually see an overall tax cut. 
Self-financed Trump may not be a puppet of the wealthy donor class, but his tax policies nonetheless reflect that of the most privileged plutocrat. And they didn’t even need to donate a dime for it.
If you think your vote doesn't count think of America without the successful interventions of Democrats in late 2008 and early 2009.
When you view the data, even you must admit, your GOP vote is a social vote.