Tag Archives: tax cuts

What they’re saying about Trump’s tax scam

22 Friday Dec 2017

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As the Trumpocalypse lumbers forward, its latest atrocity, the Republican/Trump tax scam is attracting lots of horrified commentary. Find below a few highlights from some of the more interesting takes on the issue:

Economist and New York Times opinion writer, Paul Krugman, takes his literary cue from the season:

It’s that time of year again. Some of us will get nice gifts, while others will get lumps of coal.

But the rules have changed a bit this time, at least as far as the federal government is concerned. The St. Nick you knew is on vacation, possibly permanently. In his place we have Republican Tax-Cut Santa, who has different priorities.

You see, the new guy doesn’t care whether you’re naughty or nice. In fact, he’ll actually reward you if you’re naughty in the right ways. But mainly he cares whether you’re rich, especially if your wealth comes from property (preferably inherited property), not hard work. In that case, you get a really big gift. If you’re an ordinary working family, not so much — and eventually you get that lump.

David Rothkopf in The Daily Beast makes the case that: “Donald Trump Just Pulled off the Greatest Long Con in History.” He outlines his case in the first paragraphs:

Bernie Madoff must be sitting in prison thinking to himself, “Schmuck, that’s how it is done!”

That’s because the con just pulled off by Donald Trump, Mitch McConnell, Paul Ryan, and very nearly every Republican on Capitol Hill would have every great fraudster in American history from Ponzi to that tubby guy behind the Backstreet Boys marveling at its scope, boldness, and brazen criminality.

But before we give these scoundrels too much credit, we need to recognize just how much of their con was, as they say in show biz, “sampled” from other scammers. These have included everything from the bait-and-switch (promise a “middle-class tax cut” on the campaign trail and deliver one for the rich and powerful) to the long con (play on the weaknesses of the sucker, take him through the twists and turns of meaningless distractions that go nowhere, then grab his cash). Another Madoff favorite that was regularly used was “cooking the books.” Estimates of benefits to the middle class were overstated, while the impact on the deficit was understated dramatically.

Sam Ross-Bown writes in The American Prospect about one of the several nasty little surprises hidden in the poorly-vetted, rushed legislation – in this case a provision that endangers our drinking water:

In the landmark tax reform overhaul, congressional Republicans axed a critical financing tool that cities and towns have used to upgrade aging drinking water infrastructure: advance refunding bonds. These bonds allowed municipalities to refinance outstanding debt at lower interest rates. The loss of this tool—combined with historically low levels of federal enforcement and support for basic drinking water standards—could deepen the nation’s ongoing lead contamination crisis by making it harder for local governments to fund much-needed infrastructure improvements that would curb lead contaminants in drinking water.

At Mother Jones, Edwin Rios lists some middle-class friendly alternative ways to spend the $1.5 trillion dollars that Trump’s tax bill gave to the wealthy and corporations: Free college; erase student debt, universal public preschool, comprehensive infrastructure repair, universal housing vouchers for eligible families making less than 30 percent of an area’s median income; CHIP funding for 107 years; global warming initiatives and disaster relief; new space stations. Read the details and weep for what could have been.

WaPos Paul Waldman analyzed the reality behind the announcement that five corporations were raising wages and/or handing out bonuses because of the tax cut. What he concluded is that there less there than meets the eye:

… Not only does it feel as though companies are attempting to curry favor with Trump as if he ere a Third World potentate, at least one of these companies – I’m lookig at you, AT&T – is embroiled in a contentious legal dispute with the U.S. government.

What’s more, these steps, while welcome, are hardly going to counter the vast benefits the wealthy will receive from this bill, much of which will come at the expense of the those less well-off. They also don’t address whether workers more broadly will actually receive a sizable jump in wages, or a sizable share of the benefits of the massive economic growth — if indeed that even happens — that Republicans claim these tax cuts will engender.

Beyond all this, while a bonus is a nice gesture — and a raise is, of course, a good thing — there was certainly nothing from stopping any company from taking such actions sooner. Overall, corporate balance sheets are flush, and stock prices are at record highs — and have been for some time. As Ben White noted at Politico, “These announcements are nice and good on all the companies for doling out some extra cash. But they are relatively small chunks of the vast piles of cash sitting around corporate balance sheets.”

Many commentators wrote about the politics of the bill. An example of the latter is John Judis’ argument in TPM (“The Politics of the Republican Tax Bill: A dissenting View”) that the GOP will have managed to insulate itself from negative fallout generated by the massive transfer of wealth upwards that this bill represents because of the small, temporary cuts that some in the middle class will receive.

TPM Editor Josh Marshall posted a careful response to Judis, concluding that:

The tax cut bill is unpopular first because its authors are very unpopular. It is also unpopular because of the disorderly and chaotic process in which it was constructed in which it was quite clear that the overriding goal was tax cuts for the wealthiest Americans. A lot of the maneuvering was to find ways not to raise taxes too much on ordinary people so that it became impossible to pass. The overriding goal, however, was clear. So it is both the popular mood, the unpopularity of the President and the substance of the bill itself that is driving its low numbers. Recent evidence suggests that the relatively marginal short term benefits to middle income earners are not ones that will change anyone’s opinions. They’ll mainly confirm opinions of people already committed to supporting the President….

The Political Animal’s Martin Longman responds to Judis by arguing that Democrats should be optimistic that Americans won’t be misdirected by GOP tax cut smoke and mirrors:

Given that Donald Trump was just elected president, taking the cynical view of the American electorate might seem like an appropriate default position, but I don’t think it’s fair or supportable to say that Americans’ simply don’t care about wealth inequality. I think a lot of people care about it, and I believe it can be politically activated with or without demagoguery. During the Great Recession, Americans were being taxed at an historically low rate, but it proved easy to mobilize an impassioned political reaction based on the idea that we’re “Taxed Enough Already.” Complaints about fair treatment can still gain traction, and it’s even easier when the underlying grievance happens to be true. Hammering the Republicans for favoring the wealthy and corporations is always at least somewhat effective, but I think it will be especially effective in this cycle.

There’s lots more information and discussion out there. No reason for anyone to be bamboozled by statements like this (from MO Rep. Ann Wagner’s (R-2) email newsletter):

When you sent me to Congress in 2012, I promised Missourians that I would find a way for families to keep more of their hard-earned money. Yesterday, the House and Senate delivered on that promise. The Tax Cuts and Jobs Act cuts taxes for middle income Missourians, allows American businesses to flourish, and paves the way for an increase of good-paying jobs. In fact, employees across Missouri and the country are already starting to see the benefits of the tax reform only hours after its passage, just in time for Christmas!

Sheesh!

Vicky Hartzler and the fine GOP art of lying through one’s teeth

19 Tuesday Dec 2017

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Here, via The Turner Report, is GOP Rep. Vicky Hartzler’s statement on the tax sham being muscled through Congress right now:

The release of this final tax reform bill brings hard-working Missouri families one step closer to relief. I look forward to voting on the tax package next week and getting it to President Trump’s desk before Christmas, so that Americans will see their paychecks increase and more jobs come back from overseas.

I want you to read this carefully in order to appreciate how remarkable it is. Remarkable, I mean, in terms the number of lies that can be packed into a relatively short statement:

The Tax bill will bring relief to “hard-working” Missouri families: I suppose this is true insofar as it’s possible that some billionaires are hardworking. And these guys are going to have so much relief that they will, to paraphrase Trump, who will also make out like the proverbial bandit, get sick of being relieved. Others, we are told by tax experts who have reviewed the document, may or may not pay less and, of course, even these much smaller poor folks “cuts” will expire within 5-10 years. Many working and middle class families and some small businesses will pay more in taxes right away since crucial deductions have been “simplified” out of existence in order to pay for huge, permanent cuts for corporations – which will, incidentally, keep almost all of the loopholes that the elimination of which have in the past provided a rationale for lowering the corporate tax rate.

Americans will see their paychecks increase: Most economists agree with those who assert that if it hasn’t already happened, increasing the corporate bottom line via a huge tax cut isn’t going to make it happen. As The Washington Post notes, “wage growth has remained relatively sluggish over the past several years, even as corporate profits hover near all-time highs as a share of the economy, and the unemployment rate continues to fall to levels that economists normally associate with rapid increases in worker pay.” Expect the corporate tax windfalls to go straight into corporate stock buybacks and to wealthy stockholders.

Americans will see … more jobs come back from overseas. The tax scam bill would allow companies to repatriate profits on a one-time basis at a 15% rate, a strategy that has failed to stop offshoring in the past. Tax lawyer David Herzog reminds us in a New York Times op-ed that, “by instituting a tax holiday in 2004, the government signaled to companies that future untaxed profits could eventually be repatriated when the budget was in trouble.” That’s why corporations are now sitting on $2.5 billion dollars they’ve squirreled away in foreign countries, waiting on the next tax holiday – and, voila, here it is.Thank you Daddy Trump.

Nor, as an AP Fact check observes, does past experience indicate that repatriated profits have much of a positive effect on the economy, but rather go into shareholders pockets or to finance stock buybacks. Tax experts, as opposed to Rep. Hartzler who clearly is not, are nearly uniform in the considered opinion that “the legislation fails to eliminate long-standing incentives for companies to move overseas and, in some cases, may even increase them.”

Nevertheless, we can expect this disastrous, deficit busting bill to pass with unanimous Republican support today. Its passage will happen even though a majority of Americans, even those who will get a tax cut, have made it clear in polls that they know it stinks. If you are interested in why Republicans don’t care about their constituents needs and preferences, Steve Benen has done an excellent job of outlining the possible reasons for GOP disregard of public opinion in this case.

I personally think that Rep. Hartzler’s mendacity in trying to pass off a mess of spoiled pottage as caviar and champagne can give us a clue to at least one aspect of the GOP strategy. I expect that we’ll hear many variants of Hatzler’s fantastic stories tripping off the lips of our imaginative Republican congresspeople in the coming weeks.They’re so sure that the voters they need have been Foxized to the point that they can be told up is down and they’ll not only believe it, but will start walking on their hands. Republicans think we’re dumb, manipulable bozos who can be led by our noses straight off a cliff.

And maybe they’re right to be contemptuous of their voters. Just look at who is sitting in the White House.

Roy Blunt uses the GOP tax bill to give a Christmas present to his lobbyist son

04 Monday Dec 2017

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Most Americans, even conservative Americans whether or not they admit it, know that the big tax cut Christmas gift President Moron has promised will be delivered directly to the fat cats who support the GOP, while the gifts the GOP pretends to be giving most other Americans will metamorphose into gigantic lumps of coal either immediately or by 2027 when the crumbs tossed to the hoi polloi will vanish into the realm of Christmas past. The easy – and true – explanation is that the Republicans who preach fiscal responsibility were long ago purchased by the beneficiaries of a system that increases the growing inequality among Americans.

However, the extent to which some GOP pols are indulging in a little personal gift-giving on the side has been mostly ignored. As an article in The Intercept makes clear, some elected Republicans have used the tax cut baloney to enhance their or their families’ bottom lines – and one of the most notable examples is Missouri’s own always-on-the-take politician, Roy Blunt:

The tax plan before Congress, though sold as broad legislation to reduce rates and end favoritism in the tax code, contains targeted provisions designed to benefit special interest groups, many of which maintain close ties to senior Republican lawmakers.

Take the special tax cut for the alcohol industry hidden in the bill.

The tax cut legislation includes a provision that cuts taxes on beer, wine, and liquor produced or imported into the country, saving companies involved around $4.2 billion over 10 years. The provision mirrors language from the Craft Beverage Modernization and Tax Reform Act, or S. 236, introduced by Sen. Roy Blunt, a Republican from Missouri and a member of the Senate GOP leadership team. (While the legislation does benefit craft, or small breweries, it extends the cuts to larger companies and the industry as a whole.)

Key GOP lawmakers maintain close ties to individuals connected to the booze industry.

Sen. Blunt’s son Andy Blunt is a registered lobbyist for MillerCoors, a brewing company that has worked to build support on Capitol Hill for the exact same targeted brewer tax cuts now included in the tax bill. …

For the record, Arizona GOP Sen. John McCain, whose wife’s fortune comes from Hensley Brewing and Sen. Ron Portman, who has close ties to a lobbying firm that represents the industry, are also implicated as per The Intercept. Might go a long way to explaining why McCain, who objected to the procedure used to concoct and attempt to force passage of the ill-fated Republican healthcare demolition effort, was far more obliging this time around. It seems that procedure can be damned as long as the sweeteners are liberally bestowed.

Meanwhile, back at the working folks’ ranch, the Community Oncology Alliance warned Congress that the tax cut bill will mandate a huge cut in Medicare spending:

The Congressional Budget Office (CBO) has warned that “pay-as-you-go” rules require a 4% sequester cut to Medicare to offset the deficit increases triggered in the current tax bill. This would double the ongoing 2% sequester cut to Medicare payments implemented when Congress was unable to solve the nation’s budget deficit in 2011.

Policymakers in Washington should note that blunt budget cutting gimmicks like the sequester cut backfire. They have terrible unintended consequences and do more harm than good for patients and taxpayers. According to the 2016 Community Oncology Practice Impact Report, in the five years since the last Medicare sequester went into effect, 91 cancer treatment clinics have closed and 130 independent community cancer practices, typically comprised of multiple treatment sites, have been forced to merge into hospitals.

Community oncology practices are where the majority of Americans with cancer are treated. Closing them creates problems with access to cancer care and consolidation into more expensive hospital systems, driving up costs for seniors with limited mobility and fixed incomes, as well as all taxpayers who fund Medicare. The actuarial firm Milliman found that the consolidation of independent community cancer practices with hospitals cost Medicare and taxpayers $2 billion in 2014 alone. In addition, Medicare beneficiaries responsible for the 20% copayment saw their bills rise by $500 million in that same year.

As a person suffering from chronic cancer, I owe my survival over the past few years to Medicare and my excellent Medicare supplement. Now, however, since the barbarians have stormed the gates of Washington and the looting has started, I can’t helping wondering how long it can last – which is another way of asking how long I can last. I also know that I’m not in the worst position among my fellow-suffers – who won’t have to worry about what is going to happen because there’s only one answer: treatment will definitely soon be put out of reach for them if this bill in finally enacted. It’ll be a grim December for lots of us.

But hey, we can be sure that it’ll be a jolly Christmas in the Blunt family home. Sen. Blunt will have contributed to a “major victory for hardworking Missourians,” by his own account. And he may not be entirely dishonest. Andy Blunt is a Missourian and I’m sure that it’s possible that he’s truly a hard-working lobbyist. And there are probably a few more like him.

Sam Graves pities poor multi-millionare farmers decimated by the estate tax

20 Monday Nov 2017

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Missouri Rep. Sam Graves (R-6), as behooves the offspring of a farm family, couches his defense of the provision of the GOP tax-cut-for-the-rich bill that would repeal the estate tax in terms of farmers. But before I get to that defense, it’s important to note that Graves seems to be a little confused about the meaning of words. He somehow thinks that the estate tax amounts to double taxation on the person who dies – rather than a one-time tax levied on the folks receiving a hefty gift they almost surely did not work for or earn. And BTW, big gifts are taxable even when the giver isn’t dead.

But he’s right about where to focus his defense of eliminating this particular rich folks’ goodie. Nobody will cry too hard if the Trump offspring someday have to pay estate taxes on what Daddy Trump represents as his billions. We all know that they’ll continue to live big no matter what – especially given the ways that Daddy is monetizing his time in the White House. But Graves knows that if his rural farming constituency thinks that the tax hurts small family farmers who receive their inheritance in the form of land, etc. rather than ready cash, they might be willing to foot the cost for Ivanka, Don Jr. and Eric to buy a few more yachts, which is why he “gravely” (get it?) pronouces:

Farmers are hit especially hard by the death tax. After a lifetime of acquiring land and equipment to help provide food for the world, farmers are subjected to an additional tax on their estate when they die. The real effect of this double, and sometimes triple, taxation is felt by the late farmer’s family.

While many folks receive an inheritance in the form of a check or stocks and bonds, the family farmer passes on his life’s work and ensures that farming continues as a way of life in North Missouri and around the country.

It’s no wonder that our kids and grandkids aren’t choosing to farm when they grow up. It’s expensive enough to get a farming operation off the ground, much less keep it in the family after giving part of it to the government.

Could get a farmer all fired up and maybe even willing to overlook all the ways that the GOP tax plans will shaft the middle class – even middle class farmers. Except for one thing: Graves is playing fast and loose with the facts. According to the Center for Budget and Policy Priorities (CBPP), “only 50 small farm and small business estates in the entire country will pay any estate tax in 2017 […] and they’ll owe less than 6 percent of their value in tax, on average.” Nor, as the CBPP further notes, will paying that tax force farming heirs to sell the family farm:

The estate tax affects so few small farms and businesses because the first $5.49 million of assets per person ($10.98 million per couple) are entirely exempt from it. Moreover, most farmers and business owners with estates large enough to owe the tax have sufficient liquid assets (such as bank accounts, stocks, and bonds) to pay the tax without having to touch other assets or liquidate their farm and business, a 2005 Congressional Budget Office (CBO) study found. Today’s estate tax rules are even more generous than those CBO assumed in its analysis. Special estate tax provisions also allow estate tax filers to spread their payments over a 15-year period at low interest rates.

While doing next to nothing for family farms, repeal would provide a windfall to the wealthiest 0.2 percent of estates — the only ones large enough to pay the tax. A repeal proposal recently reintroduced in the Senate would provide the 0.2 percent of wealthiest estates with an average tax cut of more than $3 million in 2017. Roughly 330 estates worth more than $50 million would get more than $20 million apiece in tax cuts, the Joint Committee on Taxation estimates. The proposal would also cost $269 billion over the decade, expanding deficits and adding to pressure for cuts in federal programs.

I’d say that somebody ought to tell Rep Graves to get his facts straight, but there’s that part of me that wonders what the point would be. We’ve seen his colleagues spin whopper after whopper to try to sell us on a tax cuts for their donors. Is it Graves fault that the best he can do is that old swampland special, the farm estate tax canard? It may even do the job it’s designed to do. After all, for many Trump voters who believe he/she knows from whence emanates all fake news, it probably still has currency.

At least Rep. Graves isn’t resorting to claims like those made my my Representative, Ann Wagner (R-2), that raising taxes on the middle class, cutting funding to programs that benefit the middle class, while giving a big regressive tax cut to the wealthiest of the wealthy will somehow help a “single mother of two.” Of course, there’s nothing to stop an unmarried Paris Hilton clone from giving birth twice. It could even happen on a lavish country estate that qualifies as a “family” farm.

Ann Wagner wants us to know that when the GOP tax cuts beggar us, we can still get an adoption credit

18 Saturday Nov 2017

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Rep. Ann Wagner (R-2) voted for the House GOP tax cut sham bill. And she’s flaunting that fact. She thinks we’re stupid.

Don’t hold your breath waiting for Annie to come clean about what she actually voted for – there’s lots of undeniable details that she will try to deny apparently doen’t want you to know.

First, this bill is a veritable cornucopia of goodies for the 1%. It gives big tax cuts to rich folks – some permanent since it abolishes the estate tax, the Alternative Minimum tax that insures rich folks pay some taxes, and changes rules for pass-through income and investment income. It cuts corporate tax rates permanently from 35% to 20% without closing many of the loopholes that allowed most big corporations to actually pay somewhere in the neighborhood of 0 – 18%. Can you imagine how much less they’ll pay since they”ll be applying a plethora of tax breaks to an even lower rate?We’ll probably end up paying them.

Second, although the bill does give a few breaks to middle and lower income taxpayers with one hand, it mostly takes them away with the other. Many of the deductions and credits that are eliminated under the rubric “simplification” are those relied upon by middle class families. Some middle income earners will see higher tax bills right away, but even those who end up with a lower tax bill now may ultimately end up getting the shaft. GOPers usually neglect to point out that many of the goodies designated for the middle class are, for the most part, temporary.

Oh – crucial fact, given Rep. Wagner’s former concern for the national debt – the sham tax cut bill also adds $1.5 trillion dollars to the deficit. That’s why middle class folks don’t get permanent tax cuts and lose lots of exemptions and tax breaks they rely on – they can’t let that deficit go past the aforementioned $1.5 trillion and still pass the bill with only GOP votes.  It’s all smoke and mirrors (albeit thin smoke and murky mirrors) that lets rich investors make out like the proverbial bandit on the backs of those of us who aren’t rich enough to invest in a pet congressman. Or woman.

It’s hard to touch on all the mischief the sloppily written grab-bag of crony pleasing giveaways manages to do in its effort to please the more vicious members of the far right. It does away with the individual mandate of the ACA, a feature that will likely result in premium increases for all of us and eventually deprive 13 million people of insurance coverage. In a bid to convince dumb-as-dirt evangelicals (i.e. those who still try to excuse Roy Moore) that big gifts to GOP cronies a good thing, it does away with the provisions of the Johnson Amendment that stipulated that churches could retain tax-exempt status only by refraining from political advocacy from the pulpit. Now thanks to the corrupt GOP, we get to subsidize the efforts of some more authoritarian religious types to impose their religious views on the rest of us.

Another thing Republicans like Wagner aren’t telling us is that sooner rather than later, there will almost certainly be a $25 billion cut to Medicare:

Thanks to laws created by the Tea Party’s infamous 2010 sequester showdown over government spending, automatic cuts spring into action anytime Congress passes a bill that balloons the federal deficit, as the tax bill would. The approximately $136 billion in cuts spurred by the GOP tax bill would hit a number of government programs—including farm subsidies and the Border Patrol—but would cut most deeply into Medicare. Medicaid, Social Security, and food stamps are protected.

So if Wagner’s keeping quiet about what the GOP tax sham bill really does, what has she actually said about this travesty to justify her vote? Two words: mendacious fantasy (a.k.a. lies). Here’s an excerpt from her floor speech (I assume that the presentation of the word “yes” in all capitals means that our Annie is still screeching every time she votes for something that is bad for her constituents – her tell maybe? :

I vote YES to fix our broken tax system; I vote YES to help reignite the American economy; I vote YES to make it a little bit easier for that single mother of two, that firefighter, that teacher, shop owner, family of four, that Veteran; I vote YES for bigger paychecks, better savings and a more secure future. I ran for Congress to fight for the people of Missouri and to ensure that every hard-working American can realize their own American Dream,”

Broken economy? Not to hear economists tell it. And that nonsense about cutting corporate taxes to fix this “broken economy,” create jobs and raise wages? No one believes that trickle-down nonsense anymore. For example, when asked recently to affirm that the tax cut would inspire them to invest more, even a panel of CEOs of major companies bluntly shot that idea down. As for rich-folk goodies like eliminating the estate tax, write-offs for private jets? Like to hear how Wagner thinks that’ll help that “single mother of two” that she’s so worried about.

But hey! Annie’s has got a middle-class card up her sleeve. In her latest email newsletter she enthused about one feature of the bill that she voted for in particular: “This bill also protects the Adoption Tax Credit which I fought to protect. For decades this pro-family provision has helped provide children with loving families and stable homes.”

So that leaves us with the Adoption Tax Credit.  All this misery, but we get to keep a small-potatoes adoption tax credit that wouldn’t be in danger if Rep. Wagner and her GOP pals didn’t desperately need to please their donors in order to keep the money flowing.

Whoopee!

CORRECTION: The House Bill that Wagner voted on did not, as implied above, eliminate the ACA’s individual mandate – that provision is currently only included in the Senate version although many GOP House members have indicated that they will support its inclusion in the final legislation.

Claire McCaskill: An adult responds to Richie Rich Trump’s tax cut proposals

16 Monday Oct 2017

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I usually try not to use the privilege of writing on SMP to do no more than reprint salient parts of news reports or editorial content without some “value” added. Reporters and pundits do a fine job, reach far more readers than I, and don’t need to be reprinted here unless their reportage and observations help me make what I hope is a related but separate point.

However, I’m making an exception today. The following text is taken from a Washington Post article about Trump’s overtures to red state Senate Democrats who may feel threatened enough to deal with the devil when it comes to his plans to slash taxes for businesses and wealthy folks such as himself. Specifically, I’m including a small section of the article dealing with the response – to date – of our Missouri Senator Claire McCaskill, widely considered to be one of the most vulnerable Senate Democrat, because I think it is so important to those of us in Missouri:

Wednesday’s meeting is expected to include Sen. Claire McCaskill (D-Mo.), a member of the Finance Committee who has  been critical of Trump’s approach so far. McCaskill has spent weeks pushing the White House to work more closely with Democrats on the tax plan, saying that a failure to work with Democrat doomed their efforts to make changes to health care rules.

But even though McCaskill is up for reelection in 2018 and comes from a state Trump won handily, she is digging in against the White House’s tax plan more than many of her colleagues, convinced voters will see it as a big handout for the rich.

During a meeting last week with constituents in Washington, Mo., McCaskill asked everyone to put a question on a slip of paper and drop it into a fishbowl.

The third question McCaskill plucked from the bowl asked simply, “Will you help get tax reform done this year?”

“I hope so. I would love to get tax reform done,” she said. “But here’s the issue. The issue is what is the tax reform bill? Now, I haven’t seen a final plan. We’ve seen an outline and the outline is very troubling to me.”

She explained that she’s “not interested in reducing taxes for the [wealthiest] 1 percent. I am very interested in reducing taxes to the middle class and to families that are living paycheck to paycheck. … That’s where my focus is.”

McCaskill then turned to notes on a lectern, telling the audience that she had asked staffers to determine how much money a Missouri family of four earning $50,000 would end up paying under the Republican proposal.

“Under the current law, their tax bill with the personal exemptions and the standard deduction and the child tax credit and the earned income tax credit, currently they’d pay $107 in taxes,” she said. But because the Republican plan would eliminate personal deductions, that same family would pay $887 in taxes if Trump gets his way.

Many in the room gasped.

“The family of four making $50,000 is going to pay more for taxes — that’s not middle-class tax relief,” she said, while noting that Republicans had not yet determined what they will do about the child tax credit.

So far, McCaskill is doing what she is able to do so well: take a stand and explain it clearly and honestly in terms that everyone understands. She’s also, wisely, acted proactivley,  touring the state and getting the message out before she’s irrevocably slimed by the Kochbots – who will still be able to do lots of damage, the political climate in Missouri being what it is. She’s doing what she can to get the word out while making it clear that she’s one of the adults in the room – something that is sorely lacking in Trump’s Washington.

Nevertheless, McCaskill’s going to need active progressive support – and she’s showing signs that she’ll earn it. We need to encourage her to keep on keeping on in this way, let her know that we’ll back her up – as the WaPo article makes clear, there are several other “vulnerable” Senators who may be persuaded to give the oligarchy a win that will be paid for by the middle and working class. We have to do our bit to make sure that our Democratic Senator knows that we’ll work hard to support her come 2018 if she works equally hard to support us – and we need to let her know that we appreciate her efforts.

*Addendum: Want to know how the GOP is going to try to scam us in order to give their donors big tax cuts – and the narrative we’re asking McCaskill to stand up against? Read this Greg Sargent column from the WaPo. If you want a teaser, here’s Sargent’s  conclusion:

This whole debate is entirely off the rails. Nothing that leaders say on any side — whether they’re the “establishment” or the “insurgents” — about what is going on among Republican voters makes even minimal logical sense. One persuasive explanation for this through-the-looking-glass state of affairs was recently offered by Ross Douthat, which is that there is an enormous void at the core of the GOP right now when it comes to what the party is supposed to stand for. Each side, I would add, is employing its own scam designed to fill that vacuum. This is not normal, and it isn’t possible to have a rational political debate under these conditions.

Vicky Hartzler: True believer or dumber than a stone?

29 Friday Sep 2017

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The Trump administration has put forward a nine page  tax cutting “proposal” that analysts agree is specific only about the great big tax cut it’ll give folks like Donald Trump. You want to know what we know about it at this point: it’ll cut taxes mightily for the wealthy, it’ll raise taxes for many in the middle class, it’ll explode the deficit. And, as is now the norm under Trump, it’s being sold to us by means of bare-faced lies.

All of which makes the response of Missouri GOPer, Rep. Vicky Hartzler (R-4) so intriguing. She sums up her “hopes” for the proposed tax cuts thusly:

I hope we can quickly pass this legislation and get it on the President’s desk so that we can create more jobs, simplify the burdensome tax process, and put more money in the wallets of Americans.

Which, in the light of what we are learning about the Trump skeleton proposal and what it will or will not do, leads one to ask whether or not she really believes this twaddle.

Surely Harzler, and the stampede of GOPers who will almost certainly follow her example and endorse the Trump desiderata list, realize that there are some serious questions that have to be answered before any legislation reaches the president’s desk:

  1. How will GOPers like Hartzler propose to pay for the mammoth cuts they are giving to the wealthy and to corporations? The plan is very sketchy about retaining or eliminating deductions that benefit the middle classes – although it is far more detailed when it comes to the benefits that will be awarded to the 1%. Do Hartzler and her pals really think that they’ll be able to “quickly” hash out the extensive details that are currently TBD to everybody’s satisfaction?
  2. Does the Hartzler contingent really buy the “voodoo,” trickle-down economic theories that are being used to justify the burden these tax cuts will put on the deficit? In spite of the consistent failure of this theory over past decades? Or in spite of the warnings of conservative economists like Bruce Bartlett, one of the first proponents of the claim that tax cuts spur growth, who declared in response to the Trump proposal that it is ” wishful thinking,” adding that “there’s no evidence that a tax cut now would spur growth”?

If the answer to any of these questions is “yes,” then the answer to the question posed in the title of this post is “both.” These folks are the truest of misguided true believers and they’re likely dumber than a whole heap of stones.

Of course, there’s another alternative. These days most GOP lawmakers finance their political careers by the grace of the generous and wealthy 1%, the folks who have for years been positioning themselves to be able to buy a tax code just like the one Richie Rich-pants Trump is flogging. Perhaps our Republicans aren’t star-struck, naive or dumb. It could be nothing more than that old-time D.C. swamp water that everybody promises to drain while it creeps ever higher and which, under Trump, may have finally reached a level high enough to drown decent politicians.

A portrait of willful ignorance

14 Tuesday Mar 2017

Posted by in Missouri General Assembly, Uncategorized

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We all know that newbie Governor Greitens has been trying to deal with a dire budget situation occaisoned by a corporate tax cut enacted in 2015 that ended up slashing incoming revenue by $155 million. Chickens are coming home to roost, you reap what you sow & etc., etc.

State Republicans, however, who were adamant that the corporate tax cut wouldn’t hurt a bit and was, in fact, necessary to stimulate growth, are now pretending that they didn’t know how distressed chickens behave, or, alternatively, that they just didn’t know what they were sowing:

“We had bad information when we passed that bill,” House Budget Committee Chairman Scott Fitzpatrick told The Associated Press. “I think if we’d have had the correct information, we wouldn’t have passed it.”

But somehow Democrats in the legislature knew that no good would come from fact-free tax cutting – and they tried to tell the GOP ideologues in the Assembly:

Democratic senators who spoke against the bill said they worried it would threaten Missouri’s excellent credit rating and reduce state funds for education.

“We can’t afford to do a tax cut at this level,” said Senator Jolie Justus, speaking on the Senate floor, citing services that she said were already severely underfunded. “We are on the wrong track.”

Democratic Governor Nixon also knew. He called the bill “ill-conceived,” and correctly vetoed it. But nobody on the Republican side was listening. The determined Republican legislative majority covered their ears and passed the tax-cut over Nixon’s veto.

It’s just one more case of willful ideologuing on the part of Republican politicians who ought to have been governing. It’s not like there hasn’t been lots of examples proving that radical tax cuts don’t really summon the elusive business fairy – Brownback’s failed Kansas economic experiment is a potent example right next door. And there’s lots more out there – Louisiana, Wisconsin, etc. are finding out that the GOP tax-cutting mantra doesn’t readily translate into workable policy.

Research tells us that corporate tax incentives may provide a windfall for CEOs of existing businesses in the state, but they rarely contribute to increased statewide prosperity. A new report even suggests that tax based incentives are not only ineffective, but actually cost more than they contribute to the economy:

Less flashy but more important, a February report from the Upjohn Institute for Employment Research suggests, are the run-of-the-mill economic development incentives built into state law across the country and designed either to attract companies, to keep them in place, or to get them to add positions. In 2015, incentives for new or expanding export-based industries (i.e., manufacturing, tech, media, any company that sells its goods or services beyond the local economy) offset average state and local business taxes by 30 percent, costing the U.S. $45 billion.

The report, based on a database of 26 years of incentives in 33 states, affirms the consensus that these tax breaks—which have tripled since 1990, when the database begins keeping track—don’t do much to convince companies to move. Plotting the effects of incentives and taxes on state GDP growth, the study concludes their effects are “always statistically insignificant … the maximum possible effects of incentives on increasing growth … are towards the lower end of the range of estimates in the previous literature.”

And while some GOP pols in Jefferson City are pretending that they just didn’t understand that actions have consequences, don’t expect a change in their direction. In December, that irrepressible tax-cutter, Senator Will Krauss (R-8), the Senate sponsor of the 2015 bill, let us know that that he, like most GOPers, will never, ever learn the lessons of the past:

Republican state Sen. Will Kraus told The Associated Press that Trump’s support for reducing such taxes could open the door to axing corporate income taxes on the state level. Kraus will introduce a bill during the next legislative session beginning in January that would phase out the state’s current 6.25 percent corporate income tax.

“I see an opportunity for us to be able to market Missouri as a corporate tax-free state,” Kraus said. He called the measure a “job-creation” bill.

Under Kraus’ bill, the tax would drop to 4 percent in 2017 and 2 percent in 2018. It would be eliminated in 2019.

So … is there any hope? Maybe. State Auditor Michelle Galloway is going to begin “what she calls a ‘budget integrity series,’ a slew of audits and financial reviews to better understand how the budget shortfall occurred … she hopes to better understand the difference between expected fiscal effects when tax breaks are offered and their actual ramifications on the state budget.” Just what the doctor ordered. But unless Galloway’s findings confirm the prior beliefs of our GOP pols, it may be too much to expect them to pay attention.

What does Governor Greitens have in common with the Liar-in-Chief?

04 Saturday Feb 2017

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Did the title give it away? Do you think the commonality shared by Jefferson City’s GOP Boy Wonder and the Orange Buffoon might have something to do with a willingness to exploit the reptilian brain of the base by presenting made-up stories to explain unpleasant facts? Stories that shift blame by exploiting carefully nurtured negative, emotionally evocative connotations? Stories like the one Governor Greitens told when he claimed Missouri’s budget shortfall is due to Obamacare?

There’s no rightwing buzzword with greater negative emotive impact for the red meat base than “Obamacare” – or at least that’s been true in the past. Now that it might disappear, however, lots of folks are experiencing a newfound appreciation for the ACA, a.k.a. Obamacare. Which is why GOPers are also desperate to paint the by-and-large successful initiative as a dead-on failure – that, they hope, will make it easer when they do repeal with no meaningful replace, and the masses, including their prone-to-snarl base, lose their insurance and start dropping like the flies they might as well be when it comes to the consideration they can expect from members of the Great Orange Pumpkin party.

These facts likely explain why our novice Governor tried to blame Missouri’s budget shortfall and the very nasty cuts he’s made on Obamacare. But they don’t make his lie right. Either Baby Big Chief hopes to pull the wool over our eyes, or he isn’t quite as smart as he’s cracked up to be. Despite the bushwa he’s trying to sell, Obamacare had nothing to do with the two cost factors he, or at least his spokespeople, cite:

1. Increases in Medcaid caseload: It’s likely that publicity for Obamacare resulted in more Medicaid applications, but it seems to me that the guilty party here is really the Missouri Republican party, not Obamacare:

  • The Missouri GOP legislature refused the federal (Obamacare) Medicaid expansion.
  • Medicaid expansion would have saved the state $100 million a year.
  • Medicaid expansion would have accommodated even more growth than the increase – mostly needy children – that the state is now struggling to cover

2. Soaring pharmaceutical prices: Here we have two villains only peripherally related to Obamacare –greedy Big Pharma and the Republicans who enabled them by throwing hissy fits about not including pharmaceutical cost controls back when Obamacare was being formulated and there was still some foolish hope that a few GOPers would come on board:

  • Obamacare at its inception failed to build in regulation of prescription drug prices, and proposals to use Medicare’s clout to bargain down drug prices were mooted thanks to persisitent aforesaid GOP vapors over “big gubment” intrusion.
  • Unregulated Big Pharma decided to milk the market for all its worth.
  • Many new drugs have come onto the market with sky-high and higher prices
  •  P.S. It’s a problem that could be fixed were saner minds ever to prevail.

And guess what? Both of these problems will continue to get worse if Obamacare goes away. Greitens just doesn’t seem to understand or refuses to acknowledge the real problem behind his budget troubles:

These budget cuts are a big deal. Tax cuts have been a disaster – one that Greitens threatens to make worse. State spending had been pared down to the bone before we ever heard of Eric Greitens. If he goes ahead and returns value for dollars to all those dark-money and upfront donors who funded his campaign and cuts taxes even more, it’s gonna be hello to that raggedy-ass Kansas state of being. If you think today’s cuts are bad, just wait. Greiten’s wealthy donors will make out big and the rest of us will bear the costs. And worst of all for Governor Baby Boy, he may not have a fanciful Obamacare crutch to lean on .

Flush prosperity down the drain, rinse with a little derp, and you’re home free

11 Thursday Jun 2015

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A couple of days ago Digby drew my attention to Paul Krugman’s definition of the term “derp”:

Derp” is a term borrowed from the cartoon “South Park” that has achieved wide currency among people I talk to, because it’s useful shorthand for an all-too-obvious feature of the modern intellectual landscape: people who keep saying the same thing no matter how much evidence accumulates that it’s completely wrong.

Based on that definition, many of you may notice that there’s lots of examples of derpiness around SMP in the past few days as well. I allude to all the posts about the doings of Kansas Governor Brownback and the economic disaster that he has created in Kansas with his tax-cuts for the wealthy friends of the GOP (see here, here, and here). Nevertheless, in spite of the emergency created by epic budget shortfalls and ranking 44th in job creation this year, there are those who persist in their embrace of derp, claiming that the “Kansas experiment” has been at least a moderate success, or, given time, will succeed colossally.

Notable among Kansas-disaster deniers is billionaire Rex Sinquefield who set out to buy himself enough compliant politicians to take Missouri down the same road. Sinquefield wants the Kansas experiment to be successful so badly that he doesn’t scruple to re-engineer the facts as he did in a recent Forbes Magazine article. Of course maybe that’s an example of plain garden-variety dishonesty rather than derp.

Sinquefield’s dollars though have had their effect on many of the Republican members of the Missouri legislature who passed their own gift to the very well-heeled, S.B. 509, last year. The standard rationale for ignoring what similar cuts did to Kansas: it’ll take more time for the positive effects of the Kansas tax-cuts to be felt. In other words, unless you belong to the  intrinsically deserving 1%, you should suffer now since we’ve heard that there’ll be pie in the sky someday. Maybe. This is classical derp, folks.

The same kind of derpiness makes Scott Walker a viable Republican presidential candidate. Walker cut taxes for Wisconsin corporations and the wealthy by almost $2 billion dollars over his tenure, and, in spite of trying to pay for the cuts on the backs of the poor and middle class via massive cuts in education, other public spending, and tax “reforms” that cost the poor and seniors, he is facing a  $283 million budgetary shortfall this year alone. He also failed to create more than half the jobs he promised would follow his tax-cuts.

How can we still regard the Republican economic philosophy as financially fiscally responsible when it leads a governor to put his state into debt default as Walker has done? What responsible, clear-thinking individual could even entertain the thought that after destroying the prosperity and endangering the public well-being of Wisconsin, Walker should be entrusted with the keys to the White House? But hey, he’s still singing the same tune and he won re-election. Derp at its best.

Examples of red-state tax-cutting failure abound. Most recently, we’ve read about how Louisiana Governor Bobby Jindall and his Louisiana legislative cohorts are begging Grover Norquist, instigator of the GOP endorsed anti-tax pledge, to let them off the hook so that they can salvage the Louisiana economy from the effects of their tax-cuts.

Want another example? Here in Missouri we’ve recently been learning about how the municipal courts have been used to generate revenue for small jurisdictions that would be unable to pay the bills otherwise. But what about a whole state that works on a similar principle? I’m talking about Albama here:

AL.com points out some of the examples of costs that are now paid for by court fees, not tax revenue: “In Chambers County, drug offenders pay into the fire and rescue fund. In Madison County, since 2000 fees for serving court papers have paid for county employees to get a raise. In Lawrence County, court costs help fund the county historical commission, so ostensibly future generations can learn about a time when Alabama adequately funded its court system.”

The State of Alabama has become so dependent on money extracted from increased court fees that, in 2014, Cleburne County officials were apoplectic when they realized that construction on nearby I-20 had cut traffic tickets in half.

[…]

The result? Working class people are paying for the cost of giving tax cuts to the wealthier residents of these states.

That last sentence? It’s true about Kansas, Wisconsin, Missouri, and red states everywhere. What allows this situation not only to persist but to become even more prevalent? Which is to say, how does the wrecking crew get re-elected? Easy-peasy. Misinformation: think Fox news, Rush Limbaugh, Sean Hannity, spin and outright lies from elected officials. Deflection: steer the conversation to abortion, guns and gays (did it ever occur to you that Obama took so much heat for a similar observation because it hit too close to home?). Fear: ISIS is coming, or Sharia law, or the U.N jack-booted troops. And last, but not least: derp: if you don’t wanna believe the facts, don’t; if they’re inconvenient, disregard them.