Our Representative Martha McSally continues to stand by her man Donald Trump, and has adopted his socioparthy for lying about taxes.
The Arizona Daily Star published a report that is no doubt stenography from a McSally press release, wherein the only “news” made is that McSally supports Trump’s tax plan (which is actually an outline that has not yet been written into a bill). McSally: Trump’s tax proposal would help local businesses, middle class:
But … she stressed the proposal is still in the most nascent of stages as lawmakers wrestle with core concepts.
So once again McSally supports a bill not even knowing what is in it because the GOP leadership has only one issue that truly matters to it and to its campaign donors, massive tax cuts for their Plutocrat masters. “Let’s get thisfucking thing done!”
She outlined her goals for tax reform, saying she wants to help the middle class with tax cuts, help small businesses grow, simplify the entire tax code and reset the tax code so that the United States can compete globally for new and growing businesses.
Well, this may be her goals, but they are not the goals of the GOP leadership nor her man, Donald Trump. The tax proposals discussed to date would achieve none of McSally’s asserted goals. So by supporting this “nascent” bill that would not accomplish anything she claims to want, McSally’s actual goals must be something else, i.e., being a loyal servant to her Plutocrat masters who contribute big bucks to her campaign.
The White House says the U.S. economy is going to be vastly better off after slashing taxes, but just about everyone else says the impacts will be modest, especially for the middle class.
This isn’t a liberal versus conservative debate. This is a White House and top GOP leaders versus pretty much everyone else debate.
America averaged about 2 percent growth a year for much of the recovery under President Barack Obama.
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The vast majority of economists — on Wall Street, at big corporations and in academia — forecast just 2.1 to 2.25 percent growth after tax cuts, hardly an economic renaissance.
Goldman Sachs, the Wall Street bank that supplied some of Trump’s top economic advisers, keeps telling its clients to expect a “modest” impact from the Trump-GOP tax plan.
Here’s how Goldman put it in a research report last week: “Overall, the research literature appears to suggest that tax cuts can have modestly positive supply-side effects, though some studies find no effect,” Goldman wrote.
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Economists at Goldman Sachs concluded that shareholders — the people who own stock in a company — typically get most of the benefits of tax cuts, at least in the first few years. Down the road, workers may see some uptick in wages, but it depends on whether businesses actually take the extra money from tax cuts and invest in more factories and technology. Economists are skeptical that will happen, especially if the tax plan ends up adding to the U.S. debt.
Former Treasury Secretary Lawrence Summers says The Trump administration’s tax plan is an atrocity:
The Trump administration’s tax plan is not a plan. It is a melange of ideas put forth without precision or arithmetic. It is not clear enough to permit the kind of careful quantitative analysis of its expected budget costs, economic effects and distributional implications that precedes such legislation in a serious country.
It is clear enough, however, to demonstrate that the claims of Treasury Secretary Steven Mnuchin, National Economic Council Director Gary Cohn and Council of Economic Advisers Chair Kevin Hassett are some combination of ignorant, disingenuous and dishonest.
Hassett, whose job is to stand up for rigorous apolitical economic analysis, had the temerity last week to accuse the Tax Policy Center — staffed by many of the most distinguished tax analysts in the country — of issuing “scientifically indefensible” “fictions.” He and his colleagues should look in the mirror.
I have strong disagreements on tax policy with Republican economists such as Greg Mankiw, Glenn Hubbard and Martin Feldstein and with Treasury alumni such as Nick Brady, John Snow and Hank Paulson. Nothing I have ever heard or read from them seems absurd or dishonest in the way that almost everything coming out of this administration does.
We know enough to say that a tax-reform plan along the lines of the administration’s sketch would not substantially increase economic growth, would blow out the budget deficit and would make the United States an even more unequal place.
The administration pushes the idea that somehow cutting the corporate tax rate will be a huge spur to investment. It is certainly possible that with a lower tax rate accountants will locate more corporate income in the United States, but a big spur to investment seems unlikely. With after-tax long-term interest rates well below 2 percent, the stock market sky-high and businesses able to write off investments immediately, capital costs have never been lower. True, there is much cash parked overseas. But almost all the companies that have done so also have cash hoards in the United States that they have chosen not to invest. The first-order effect of a Trump administration “territorial system” that renounced a U.S. tax claim to overseas corporate income would be to encourage relocation of productive activity to tax-haven jurisdictions, slowing U.S. growth.
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What about the budget deficit? For tax cuts to pay for themselves, as Mnuchin sometimes asserts would happen, they would have to massively increase growth. Because this is unlikely, they would bloat the budget deficit at a time when we should be preparing for the next downturn, for rising entitlement costs and potentially for the need for increased national security spending.
But it’s worse than this. Many in the administration’s orbit have expressed the belief that the Federal Reserve’s quantitative-easing program has inflated asset prices by absorbing long-term bonds. If this logic is correct, increasing the supply of bonds to fund the large increase in deficits that tax cuts would entail should have a significant depressing effect on asset prices and the economy. Any possible supply-side benefits of the tax program have to be weighed against this damping impact.
Finally, there is the question of fairness. Those secure in their beliefs do not seek to depublish studies by apolitical civil servants. There is little doubt among serious economists that — as explained in a 2012 paper that has mysteriously vanished from the Treasury website — the immediate impact of corporate tax cuts is to help corporations and that the vast majority of corporate shareholding is concentrated among those at the top of the income and wealth distribution. There is the further point that in defending fairness the administration ignores its proposed estate-tax repeal, which affects only the top two-tenths of a percent of the population.
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And Mnuchin and Hassett’s arguments about investment depend on the false premise that domestic investment will be spurred by corporate tax cuts. Anyone in doubt about such fairness questions should just note that the administration is not willing to do what all previous Treasuries have been willing to do: present a revenue and distributional analysis of its plan.
The world’s finance ministers and central bank governors recently met in Washington for the annual International Monetary Fund-World Bank meetings. I.M.F. Cautions Against Tax Cuts for Wealthy as Republicans Consider Them:
The International Monetary Fund delivered a blunt warning to international policy makers ahead of the fund’s annual meeting this week: Governments risk undermining global economic growth by cutting taxes on the wealthy.
The message, while aimed broadly at all developed nations, carries particular resonance in the United States as the Trump administration and Republican lawmakers push a tax plan that critics say will exacerbate income inequality by reducing taxes for the richest Americans.
In a report issued Wednesday, the fund emphasized that flatter tax rates across income scales and lower rates for the highest earners could exacerbate a troubling trend toward growing inequality in the United States and around the world.
President Trump’s agenda in many ways defies these recommendations . . . The White House is currently pushing a proposal that tax experts warn would cut taxes for the wealthiest Americans by lowering the top rate, by eliminating the estate tax and by doing away with the alternative minimum tax, which imposes a higher rate to ensure the wealthy are not exploiting loopholes.
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Perhaps most importantly, the framework tax plan includes several measures that analysts say would amount to windfalls for wealthy Americans, even though Mr. Trump has said the wealthy will not benefit from the plan [remember, Trump is a pathological liar: everything he says is a lie because he is compelled to lie].
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An analysis of the framework proposal by the Tax Policy Center in Washington, which made some assumptions about the unspecified details in the Republican plan, found that the gains from the proposal would be heavily concentrated among the very rich.
Maurice Obstfeld, the International Monetary Fund’s chief economist, said the fund was waiting to see the details of the plan but said it should generate revenue rather than increase the deficit, which would help the United States invest in infrastructure and assist its aging population.
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Other economists were more pointed about the effects of Mr. Trump’s tax proposals.
“Those kinds of regressive taxes lead to the creation over time of increasingly more disparate wealth and income inequality,” said Joseph E. Stiglitz, a professor at Columbia University. “So rather than reducing that kind of regressivity, his proposals, as far as one can say, are going to make things worse.”
So how are Republicans going to sell this tax cuts for Plutocrats plan to the MAGA fools who bought Trump’s populist uprising against Wall Streetc elites con job? By doing what the GOP has always done: lie their asses off. As Paul Krugman accurately notes, The G.O.P. Is No Party for Honest Men:
According to a new CBS News poll, almost 60 percent of the American public believes that the current Republican tax plan favors the wealthy. Some people see this number as a sign that the plan is in trouble; I see it as a sign that Republican lies are working far better than they deserve to.
For the plan does indeed favor the wealthy — overwhelmingly, undeniably. It’s shocking that as many as 40 percent of Americans don’t realize this.
It’s not difficult to see how the plan is tilted toward the very top. The main elements of the plan are a cut in top individual tax rates; a cut in corporate taxes; an end to the estate tax; and the creation of a big new loophole that will allow wealthy individuals to pretend that they are small businesses [i.e., Martha McSally’s “small business” campaign contributors], and get a preferential tax rate. All of these overwhelmingly benefit the wealthy, mainly the top 1 percent.
There are also some measures affecting middle-class families, but they’re relatively small change — and some of them would actually raise taxes. Over all, the nonpartisan Tax Policy Center estimates that by 2027 almost 80 percent of the gains from the plan would go to the top 1 percent, just 12 percent of the gains to the middle 60 percent of Americans — and that more than a quarter of middle-class families would actually see their taxes go up.
So the question about this plan isn’t whether it favors the wealthy — it does, to an outrageous extent. The questions we should be asking instead are why Republicans are pushing this so hard, and how they can hope to get away with it.
Bear in mind that there is essentially no popular constituency demanding tax cuts for the rich. By a large margin, the general public wants to see taxes on corporations and the wealthy go up, not down; even Republicans are divided, with only a modest margin in favor of cuts.
Yet tax cuts for the rich are the overriding objective of the modern G.O.P. They were the principal motivation for the attempt to repeal the Affordable Care Act, since that would also mean repealing the high-income taxes that pay for it; from Republicans’ point of view, depriving millions of health care was just a minor side benefit. And now tax cuts for the wealthy are pretty much the only thing left on the G.O.P.’s legislative agenda.
In fact, it’s becoming increasingly clear that the hope for tax cuts is the main thing keeping congressional Republicans in line behind Donald Trump [lookin’ at you Martha]. They know he’s unfit for office, and many worry about his mental stability. But they’ll back him as long as they think he might get those tax cuts through.
So what’s behind this priority? Follow the money. Big donors are furious at missing out on the $700 billion in tax cuts that were supposed to come out of Obamacare repeal. If they don’t get big bucks out of tax “reform,” they might close their pocketbooks for the 2018 midterm elections.
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But how can an administration that pretends to be populist, to stand up for ordinary (white) working people, sell such elitist policies?
The answer is a strategy based entirely on lies. And I mean entirely: The Trump administration and its allies are lying about every aspect of their tax plan.
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I’m talking about flat-out, easily refuted lies, like the claim that America has the world’s highest taxes (among rich countries, we have close to the lowest), or the claim that estate taxes are a huge burden on small business (almost no small businesses pay any estate tax).
Nor do I mean that there are just one or two big lies. There are many — so many I literally don’t have space to so much as list them in this column. In a long blog post this past weekend I tried to provide a systematic list; I came up with 10 major Republican lies about tax cuts, and I’m sure I missed a few.
So, politically, can they really get away with this? A lot depends on how the news media handles it. If an administration spokesperson declares that up is down, will news reports simply say “so-and-so says up is down, but Democrats disagree,” or will they also report that up is not, in fact, down? I wish I were confident about the answer to that question.
One thing we know for sure, however, is that a great majority of Republican politicians know perfectly well that their party is lying about its tax plan — and every even halfway competent economist aligned with the party definitely understands what’s going on.
What this means is that everyone who goes along with this plan, or even remains silent in the face of the campaign of mass dissimulation, is complicit — is in effect an accomplice to the most dishonest political selling job in American history.
The professor is talking about lying enablers like you, Martha McSally.
And maybe the Arizona Daily Star should find someone who can do economic analysis to challenge Martha McSally on her tax lies, and not just publish stenography from her press releases.