It’s not true, of course. Kansas even tried a mammoth tax-cut “experiment” and it ended in dramatic failure. Jobs were not created. The wealthy just kept that money. Growth stagnated. Eventually, Republicans had to vote to raise taxes in order to get things moving again.
Whether or not a tax cut is effective for stimulating economic growth depends on other factors in the economy. You’re correct that those factors are not present today. If the WERE present, tax cuts would be the smart thing to do.
But Kansas was a different story. The lesson of Kansas is not as much “tax cuts don’t work”, but that in any given state (or nation) it is a very difficult thing to change a tax plan. Armies of accountants and business procedures are all in place to maximize benefit from the existing plan; changing that overnight pulls the economic rug out from under them. Kansas looked south to Texas (no state income tax, and businesses constantly moving to TX from high tax states) and wanted in on the game. They didn’t reckon with the inertia the existing tax system has.
If the top one percent understood basic economics, they’d know that investing in a smart tax structure is the way to build sustainable growth for everyone.
Oh, please. The top 1% understand not only basic economics, they also understand macroeconomics. I suppose they’d LIKE to have a more balanced taxation system, but I agree that they’re focused on their own bottom lines.
But they’re short-term thinkers who believe that they deserve their money more than the vast majority of Americans, and so they favor a reverse Robin-Hood plan that steals from the poor to pay the rich. It’s dumb, but it’s comprehensible.
Yea…..well, nobody DESERVES money other than the person who earns it. That “deserves” notion is a nonstarter, logically. You were better off talking about parks and unemployment insurance.
Why is the Republican tax bill so goddamned mean?
It’s not a great plan, and benefits do skew too much to the upper bracket for my taste, but “mean” it’s not. Keep in mind that 70% of the taxpayers do not file the long form where all those goodies are. The GOP plan doubles the standard deduction and increases the child credit to $1600 per person. That is going to take a LOAD of people off the tax rolls entirely, and provide fatter refund checks to the lowest income quintiles. Now, the loss of some the deductions on the short form will reduce that windfall to some (like teachers, but we;ll get to that later), but whenever you kick up the standard deduction and child credit, you are kicking money to the lowest quintiles, AND creating a fairer tax *structure.*
Well, the Republican tax plan eliminates the $250 tax deduction that teachers used to be able to claim for those out-of-pocket purchases. To the teachers, that $250 is incredibly important, but in the scheme of the greater budget, this is peanuts.
Well, so much for you being someone who understands tax theory. If you did, you’d be applauding getting rid of this deduction. Why? Because this ends up being a federal subsidy for something that is supposed to be handled at the local level. The moment it was put into place, school districts all over the nation cut their supplies budgets (I was a teacher when it happened) and loaded the responsibility on the teacher, BECAUSE THE FEDS WERE NOW PAYING).
The “solution” here is not to whine about Paul Ryan, but since you love paying taxes, get your local school district to jack up your taxes and increase their supply budgets so the teachers don’t have to come out of pocket at all.
But, you won’t. It’s more fun to complain about big, bad Republicans.
The plan also makes higher education more expensive for most Americans. It puts college and graduate school effectively out of the realm of possibility for the poorest Americans.
Same point. If you permit a deduction for student loans, you’re signalling to the universities “ALL CLEAR TO RAISE TUITIONS!!!!!” Stop it. Flatten the tax code, and blame the universities, whose fault it is that they play so many games with tuitions.
But it’s not just college students who’ll be mortally wounded by the tax plan. Nonprofits, too, will take a huge hit. They predict that the GOP incentives might mean Americans could give 12 to 13 billion dollars less in charitable donations every year.
Now on some of these, you and I have some agreement. There is nothing wrong with having a tax credit or deduction for behavior that you want to stimulate, and that doesn’t cause inflation down the line (like the above two examples). So, adoption, hiring of vets, yea, we agree. (I would need to see the math on “two or more children” before I agree with that one — that sounds very unlikely to me — there has always been a “divorce penalty” in the tax law, and the idea that getting rid of the individual mandate will cause a drop of health care coverage is well-documented bullshit. It was Jonathan Gruber himself who admitted that.)
You might have noticed a pattern: some of these cuts are intended to hurt blue states more than red states.
Now you’re just being provocative. The loss of the state and local deduction does penalize people who live in high tax states. Sorry, but the rest of the nation shouldn’t be contributing facilitating those states to have high taxes.
So what the hell are Republicans thinking? This is a tax plan that defies nearly every value they’ve ever promoted as a party: it hugely adds to the national debt, it penalizes family values, it takes opportunity away from Americans who served their country in the military, it raises taxes on almost half of all Americans. What do they get out of it? What’s their motivation?
None of that. The primary motivation is to increase business activity (there are no shortage of professional economists who agree that it will) by flattening out distortive tax credits and lowering rates on business. Further, a flatter code with fewer credits and deductions is simply more efficient. Does anyone get po’ed when they lose a deduction they’ve benefitted from? Absolutely. Nobody is going to like a tax reform bill, ANY tax reform bill, because everyone has arranged their personal economic behavior to get the most benefit from the one that we had.
Bartlett argues that Republicans are thinking of a long game: they want to hand the wheels of power over to Democrats, so those Democrats can raise taxes, thereby making themselves toxic to voters for the next string of elections in 2022 and 2024.
It’s a breathtakingly stupid strategy,
Chuckles. Well, that’s actually NOT that stupid….but I doubt the GOP are bright enough to play that way. Bartlett is dreaming.
No Republican politician in the party today is willing to do himself harm in pursuit of a greater strategic goal. They’re short-term thinkers, not chess masters.
But here’s my thought: maybe Ryan and Congressional Republicans are just trying to tear it all down?
I think it would be better to say that the GOP believes that Americans will like their country better if more services came from the states and less from the feds. I happen to agree with that. Better government governs closest to the people.
For forty years at least, Republicans have argued that we can’t have good government programs — health care for all, affordable college, solid infrastructure, decent elementary and high school education — because we just can’t afford it.
Well, we can’t, when you’re paying a trillion dollars or so (Pentagon plus all other military spending) each year for military spending. The Democrats and Republicans together agree that that’s what we need to spend. There’s your universal health care plan, a decent seniors pension, and a whole lot of other goodies right there.
The enemy of social welfare is not the GOP. Its the Pentagon.
They’ve adjusted our expectations to the point where mainstream Democrats have become willing participants in this grand hostage drama.
YES, THEY CERTAINLY ARE.
But if that’s the plan, I have bad news for Republicans: if they vote for these dramatic and painful tax cuts, they will have to face the consequences of their actions. Americans will see the results of trickle down economics — fewer jobs, lower wages, less compassion, more greed and extractive economic policies — and the choice will be stark.
Well, that’s NOT what we’re going to see from all this; I expect to see GDP levels approaching 4%, and I’m not alone in that expectation, but that’s kind of secondary. The bigger problem is that the government has now realized that they can engage in more and more creative levels of financial engineering to keep the boat afloat. What the Fed did during the meltdown is basically like your right pocket borrowing money from your left pocket. That wouldn’t work for you and I, but it works for them.
They are against government, and they are against society.
Nope. We like society. We want a society with a smaller, less intrusive government. There’s a difference.
If Congressional Republicans force the choice between everything or nothing, between all for one or everyone for themselves, I believe the American people will choose to build, not to destroy. But it’s a great shame for this entire nation that it has come down to this moment, with one of our two political parties standing in the middle of the living room, soaking everything in gasoline, and lighting a match.
Not on this plan. The only thing that’s worse than the plan the GOP is going to pass is the one we have today.