Category Archives: GOP War On…

Kansas is a cautionary tale for Arizona, and America

In 2012, Koch-bot governor Sam Brownback led a radical Tea-Publican legislature to enact the “Kansas experiment” out of blind faith in trickle-down economics. They enacted “a tax cut that eliminated state income taxes entirely for pass-through entities — such as sole proprietorships and limited liability partnerships — which are taxed at the owner’s individual income tax rate. The law also lowered individual income tax rates, cutting the top rate to 4.9 percent from 6.4 percent.” Kansas Tried a Tax Plan Similar to Trump’s. It Failed.

The tax package reduced state revenue by nearly $700 million a year, a drop of about 8 percent, from 2013 through 2016, according to the Kansas Legislative Research Department, forcing officials to shorten school calendars, delay highway repairs and reduce aid to the poor. Research suggests the package did not stimulate the economy, certainly not enough to pay for the tax cut. This year, legislators passed a bill to largely rescind the law, saying it had not worked as intended.

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[C]ongressional Republicans and President Trump are trying to take the experiment with pass-through preferences national, beyond Wichita and Topeka to cities with residents who measure incomes in seven, eight or nine figures.

The Republican tax rewrite unveiled this month aims to jump-start economic growth in part by establishing a 25 percent tax rate on small businesses and other firms that operate as pass-through entities, a cut from the top rate of 39.6 percent that such business owners pay now.

But the abandoned experiment in Kansas points to how a carve-out intended to help raise growth and create jobs instead created an incentive for residents, particularly high earners, to avoid paying state income taxes by changing how they got paid.

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So how’s that trickle-down working out for Arizona?

The Arizona Capitol Times (subscription required) reports that Arizona Legislature’s budget analysts predict 2018 shortfall:

The Arizona Legislature’s budget analysts last Thursday predicted a budget shortfall that could top $100 million in the current and coming year as the impact of corporate tax cuts continues to overwhelm increases in sales, insurance premium and personal income tax collections.

Whaaa? You mean tax cuts don’t pay for themselves and are revenue neutral? (sarcasm).

Chief budget analyst Richard Stavneak told economists and state officials who make up the Legislature’s Finance Advisory Committee that the shortfall will hit $104 million. That’s out of an expected $10 billion in spending for the budget year that begins next July 1. A panel of state lawmakers also attended the meeting.

Excluded from that projection is $90 million in current spending that is labeled one-time but appears to be an ongoing commitment by the Legislature and Gov. Doug Ducey, Stavneak said. That puts the expected shortfall next year close to $200 million if that spending isn’t cut. The revenue picture could also brighten, but signals are mixed, he said.

Phased-in corporate tax cuts enacted under former Gov. Jan Brewer in 2011 have cut more than $600 million in yearly revenue since 2014. Rep. Don Shooter, R-Yuma, said it may be time to revisit the corporate tax cuts and predicted a budget battle next year.

“It’s going to be a free-for-all. We’re back to the cutting, I don’t see any other way,” Shooter said. “It’s going to come down to who’s going to bleed the least, what’s going to be the least painful, I guess.”

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Kabuki theater: budget vote-a-rama in the Senate today

The U.S. Senate is voting on the GOP’s budget resolution today, which is really not about the budget at all, but rather, rigging the procedural rules in the Senate so that the GOP can vote on its so-called “tax reform” (tax cuts for Plutocrats) bill at some point with a simple majority vote of 50 senators plus the Vice President, and bypass the Senate cloture rule of 60 votes to forestall a Democratic filibuster through adoption of reconciliation rules.

The Senate’s budget process allows votes on any politically charged issue during a so-called vote-a-rama session. This is  all Kabuki theater to get senators to take votes on amendments to be used in campaign ads against them later.

Roll Call reports, When the Budget Resolution Isn’t About the Budget:

When Sen. John McCain removed the suspense by announcing he would vote for the budget resolution moving through the Senate, the Arizona Republican made clear the ridiculousness of the exercise.

At the end of the day, we all know that the Senate budget resolution will not impact final appropriations,” he said in a statement. “To do that, Congress and the White House must negotiate a budget agreement that will lift the caps [sequestration] on defense spending and enable us to adequately fund the military.”

McCain said he was supporting the budget resolution because it includes instructions that provide the path forward for overhauling the federal income tax code without the risk of filibusters, rather than because of the funding levels it would provide.

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Follow the money: Robert and Rebekah Mercer

There has been a substantial amount of reporting in the past week or so on Stephen Bannon, the white nationalist crypto-fascist editor of Breitbart News and Trump adviserand his war on the GOP establishment.  At the entirely misappropriately named Values Voter Summit, Bannon declares ‘war’ on GOP establishment. He told Fox News’ propagandist Sean Hannity earlier in the week that he was declaring “war” on the Republican establishment.

The media mythologizing Bannon as the alt-right Svengali to Donald Trump is misplaced. Bannon would be “Stephen who?,” a political nobody, but for the “wingnut welfare” (the lavishly-funded ecosystem of right-wing billionaire-financed think tanks and media outlets) financial backing of far-right extremist billionaires Robert and Rebekah Mercer. Some say Bannon is their Svengali.

When the media focuses on the vicious barking dog, they ignore the owner holding the dog’s leash to the peril of the country. When the media reports on Stephen Bannon, it has an obligation to also report on Robert and Rebekkah Mercer in the same breath, exposing them to the bright light of public scrutiny that they seek to avoid.

Jane Mayer of the New Yorker did a deep-dive investigative report into The Reclusive Hedge-Fund Tycoon Behind the Trump Presidency back in March (excerpts):

People who know [Robert Mercer] say that he is painfully awkward socially, and rarely speaks. “He can barely look you in the eye when he talks,” an acquaintance said. “It’s probably helpful to be highly introverted when getting lost in code, but in politics you have to talk to people, in order to find out how the real world works.” In 2010, when the Wall Street Journal wrote about Mercer assuming a top role at Renaissance, he issued a terse statement: “I’m happy going through my life without saying anything to anybody.” According to the paper, he once told a colleague that he preferred the company of cats to humans.
Several people who have worked with Mercer believe that, despite his oddities, he has had surprising success in aligning the Republican Party, and consequently America, with his personal beliefs, and is now uniquely positioned to exert influence over the Trump Administration.

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President Trump sabotages ‘Obamacare,’ will blow up health care markets out of spite

President Donald Trump, who promised to repeal and replace “Obamacare” on day one in office — “it will be easy” — suffered humiliating deafeats after several failed attempts by Congress. For a man fixated on erasing any legacy of Barack Obama out of jealousy and spite, he has been stewing about ways he can sabotage “Obamacare,” and with it the health care of millions of Americans, outside of congressional action. It is purposeful, malicious and amoral.

The New York Times reports that, as I predicted, Trump has gone nuclear in House v. Price, ending the Cost Sharing Reduction subsidies (CSRs) to insurers for low income Americans. Trump to Scrap Critical Health Care Subsidies, Hitting Obamacare Again:

President Trump will scrap subsidies to health insurance companies that help pay out-of-pocket costs of low-income people, the White House said late Thursday. His plans were disclosed hours after the president ordered potentially sweeping changes in the nation’s insurance system, including sales of cheaper policies with fewer benefits and fewer protections for consumers.

The twin hits to the Affordable Care Act could unravel President Barack Obama’s signature domestic achievement, sending insurance premiums soaring and insurance companies fleeing from the health law’s online marketplaces. After Republicans failed to repeal the health law in Congress, Mr. Trump appears determined to dismantle it on his own.

Without the subsidies, insurance markets could quickly unravel. Insurers have said they will need much higher premiums and may pull out of the insurance exchanges created under the Affordable Care Act if the subsidies were cut off. Known as cost-sharing reduction payments, the subsidies were expected to total $9 billion in the coming year and nearly $100 billion in the coming decade.

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Deal making with the devil on DACA

Please allow me to introduce myself
I’m a man of wealth and taste
I’ve been around for a long, long year
Stole many a man’s soul and faith

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Pleased to meet you
Hope you guess my name
But what’s puzzling you
Is the nature of my game

Sympathy For The Devil – The Rolling Stones

I warned you about making deals with the devil. A DACA deal with ‘Amnesty Don’? Don’t believe it until it actually happens. One cannot trust anything that a pathological liar says. President Trump has made 1,318 false or misleading claims over 263 days.

This week the Trump administration announced its hostage demands for a DACA deal. Trump administration releases hard-line immigration principles, threatening deal on ‘dreamers’:

The Trump administration released a list of hard-line immigration principles late Sunday that threaten to derail a deal in Congress to allow hundreds of thousands of younger undocumented immigrants to remain in the country legally.

The administration’s wish list includes the funding of a wall along the U.S.-Mexico border, a crackdown on the influx of Central American minors and curbs on federal grants to “sanctuary cities,” according to a document distributed to Congress and obtained by The Washington Post.

The demands were quickly denounced by Democratic leaders in Congress who had hoped to forge a deal with President Trump to protect younger immigrants, known as “dreamers,” who were brought to the United States illegally as children.

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