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But How Will They Pay for It? Trump Considering Bypassing Congress to Hand Rich Another $100 Billion in Tax Cuts


#1

But How Will They Pay for It? Trump Considering Bypassing Congress to Hand Rich Another $100 Billion in Tax Cuts

Jake Johnson, staff writer

No longer bothering to pretend that its tax policy amounts to anything more than dumping as much money as possible into the pockets of ultra-wealthy CEOs and investors, the Trump administration is considering a plan to leapfrog Congress and unilaterally hand the richest Americans another $100 billion in tax cuts.


#2

From the article:

“…that part of every bank heist movie, where the robbers realize they’ve triggered the alarms and the cops are on the way, and so they just start stuffing the bags with as much money as they can carry.”

What cops? Where are they when we really need them?


#3

All these tax cuts for the rich have one ulterior motive: Kill the social safety net.

GOP has been working tirelessly over the last couple of decades to privatize everything and squash welfare, medicaid, medicare, social security, etc. So I’d like to know–who will pay for the sick and elderly? The middle class is already drowning.

Interesting side-line…yesterday I spoke to my sister who lives in Texas. She commented on the increased number of people flying. She flies standby all the time and travels a lot. Given the economy, how can so many more people have money for the obnoxiously high airfare?

Seemingly contradictory facts: More people homeless and out of work vs more people spending money on junk and flying/travelling. What’s up?


#4

The middle class isn’t drowning. “Given the economy…”, “…obnoxiously high airfare”. The economy is doing well and ticket prices aren’t high, hence the amount of people traveling


#5

Read about this elsewhere. Once again, in another move to make the wealthiest wealthier (and deprive the country of tax dollars), Trump’s Treasury (read Steven Mnuchin) plans to cut capital gains taxes by revising the computation for such taxes. Capital gains are income derived while sleeping, ie not by one’s labor which is always taxed.

White House Plans Bold Move on Taxes
Treasury might change how capital gains are figured, benefiting wealthiest Americans

The wealthiest Americans may be getting some good news on taxes from a big shift under consideration by the Treasury Department. The change would affect how capital gains taxes are figured in regard to inflation, with the upshot being that the amount owed to the government would be less, reports the New York Times. The example used by the newspaper: If someone bought a stock for $100,000 in 1980 and sold it for $1 million today, they’d pay taxes on the profit of $900,000. Under the change, the initial price would be adjusted for inflation and raised to $300,000, reducing the profit and saving the investor about $40,000 in taxes. The other controversial aspect of the change is that Treasury is considering doing this under its own power, instead of through Congress.

If it can’t get done through a legislation process, we will look at what tools at Treasury we have to do it on our own and we’ll consider that,” says Treasury chief Steven Mnuchin.


#6

He’s handing himself a tax cut and there is no macroeconomic justification for doing this. It would make sense if leaving money in the economy resulted in hiring more people, if it produced good paying jobs, if it helped to lower negative externalities, if it increased positive externalities, etc. None of that will happen. It will increase inequality and give people more money to buy up their own shares, to play around in financial markets, they will store some of it in tax shelters, and it will give them more money to control this political system and those with less money. We might as well just burn the money, it would do less harm than giving it to rich sociopaths (Jim Schmidt’s peeps).


#7

They are not cutting the capital gains rate they are proposing changing the way the cost of an asset is calculated to account for inflation.


#8

Spin. No, they’re not changing the rate just in the way it is computed which results in a capital gains tax cut. It is a tax cut.


#9

Let’s put aside ideology. Comments about taxation being theft, or whatever, are pointless. Let’s not even talk about this further increasing inequality in a society that is already at banana republic levels of inequality. What is the macroeconomic justification for doing this? You give more money to people that already have massive amounts of money, they generally have lower propensities to spend than the poor and middle class. They aren’t using this to invest in producing things as is. I don’t blame them, there isn’t enough domestic demand to buy what they would produce, and why produce something in a country where wages even for the poor are much higher than what they will find in many “developing” countries. They are buying up their own shares, buying luxury items, storing it in tax shelters, investing it in other countries, playing around in financial markets. Why give it to them and not working and poor people, if you want the economy to grow? Will the rich pour money into actually making things here domestically? If so, why and what will they invest in?


#10

People who fly, like most folks, are living on credit. It’s a mathematical impossibility in the U.S. for the vast majority of people to live on our low wages and salaries.


#11

I don’t think this is actually going to happen and if it did I’d prefer it be via Congress (as part of comprehensive tax reform).

You talk about putting aside ideology and then ask this “Why give it to them and not working and poor people…”. Nobody is being given anything, it’s their money and they would be keeping more of it.


#12

If you cared to actually look into the details you’d proly find that after business travelers it’s mostly the top ~10% of income / wealth folks who are traveling and are not living on credit (although they likely are using credit cards for the actual purchases).


#13

I don’t know why anyone would not expect this from the orange beast. What does “New York real estate tycoon” translate out to except “con artist”. Maybe this country will do the world a favor and just collapse into anarchy. We are the only ones who think the world actually needs us.


#14

It is ludicrous to even consider it. 60% of the country does not even have $500 for an emergency yet Treasury wants to cut taxes for the wealthy. This only furthers historic inequality in the US, which now has the largest wealth inequality gap in the developed world. We are number 1!

"… the U.S., which also has the largest wealth inequality gap of 55 countries studied, according to the report.

While America’s growing income inequality has been the source of much debate, this report examined the wealth—which includes not just salary, but also property and investments held by a family. The report found that America’s wealth inequality is even more gaping its income inequality. In fact, the report dubbed the U.S. the “Unequal States of America” due to the size of the gap."
(Fortune)

Face it, this is a run on the government to cut taxes each and every way possible before Trump gets voted out of office. They know the democrats are worthless are rectifying this if and when they have control of the White House and Congress. The best the Ds will do is a little trimming off the top to satisfy the naysayers. See Obama extending (and making permanent) Bush’s tax cuts for the wealthy.

"… Democratic members of Congress and President Obama have permanently set tax rates … at extraordinarily low levels by historical standards. Short of major revenue increases, projected general revenue consequently will grossly underfund government services and investments; relative to a current law baseline (in which the tax cuts would have expired), passing the income tax rate cuts will lead to $3.2 trillion in lost revenue over a decade

The projected costliness of the Bush [now Obama/D] tax cuts should not come as a surprise; they have been expensive since enacted. They played a major role in the huge swing from surpluses to deficits we experienced over 2002–2011.


#15

Well, for one, how they got the damn money is open to debate, as I have pointed out countless times. Even modern neo-classical, free market types acknowledge that industries that are highly concentrated will accrue money far beyond what they would in an actual free market (which doesn’t exist). They would make money simply because of their size, and they would have advantages because of economies of scale. We know that concentration in most markets has massively increased over time, domestically and worldwide. It is also a fact that rich people like Bezos didn’t create their billions with their own hands. That would be impossible. He necessarily monopolized the value that others created, this cannot be debated, surpluses were created by countless people in the businesses he owns by people working for those businesses, and he was able to grab that value that they created because of the laws and policies we have put in place, and because of his power (and those like him) relative to those making the surplus value. We know that lots of money is made in the economy by playing around in financial markets, by betting on things, by others going into debt to those that already have money. No social worth at all, and the size of the financial system has exploded in recent decades, a sign of a dying system. Lots of money is made on land speculation. You buy a piece of property, and while it may increase in value because of investments you make, most of the appreciation in land values will be a result of economic development in the community. The proximity to that development is what resulted in appreciating land values. We know that lots of money is created when businesses create costs, which they then push off onto others, which increases their profits. We know that many businesses make profits because they pay such low wages that their workers qualify for food stamps and Medicaid (a further externalizing of their costs, this time onto government). We know that a large percentage of wealth is inherited and passed down during a person’s lifetime by rich relatives too, and when it is inherited we have progressively lessened estate taxes. So, it’s a joke to claim that the money was earned. Lots of it should never have been theirs in the first place.

And I am asking for a macroeconomic justification for doing this versus, say, increasing the minimum wage, increasing food stamps, or employing people to re-build our crumbling infrastructure (which you comically denied recently). You read the research on the multiplier in regards to food stamps versus giving Nancy Devos more money. Or the economic growth associated with increasing wages of those with high marginal propensities to spend (those with lower wages) versus leaving more money in the economy for the rich, who have higher propensities to save and will not inject that money into the economy. You have no defense of this from a macroeconomic perspective. Just admit that.

Besides, economists going back to the Physiocrats have said that giving money to the rich makes sense only if they inject the money back into the economy. Hoarding money was thought of as being the ultimate evil, which is why people like Ricardo and Mill were so critical of the rentier class. Mill said that the rentier class made money in their sleep, they would sit on their asses and rake in money form rent, and they didn’t inject that money back into the economy. Ricardo gave an argument in favor of free trade more than anything because he wanted to reduce rents on land, or unearned income. Adam Smith mentioned the “invisible hand” once in the Theory of Moral Sentiments, and it was a situation where a small group of people got control over the majority of land. He said that those people would act in the interests of society and those that had land taken from them or had access to land cut off would be just as well off because those that took control of the land would act altruistically and would support them. Naïve of course, but he needed to at least make that argument to address inequitable ownership and power, which he did elsewhere.


#16

Saw Melania yesterday in a photo with garish yellow shoes on that probably cost well over $500, maybe hundreds more. Stiletto’s.

Does Melania have any idea that the planet is burning?

Btw, I think the increasing drive to reject “cash” has a lot to do with the fact that paper money burns. And is also traceable if it carries a scent of “drugs.”


#17

“how they got the damn money is open to debate …” Perfect - says it all.


#18

Those Bush tax cuts along with the other ensured that the rich pay most of the taxes while the bottom pay nothing or close to it. If you want to talk about closing deficits (which are a spending issue) with more revenue start there.


#19

If somebody did something illegal to obtain money I am all for them being prosecuted. There is nothing wrong with paying “low” wages (above the minimum) or inheriting money. That’s just more ideology from you.

It’s odd you bring up land appreciation as that is kind of what the whole point of including inflation in the cost basis calculation is. If it’s going to go up in value anyway why should one be taxed on that portion of it?


#20

This is the most assinine justification for cutting taxes for the “have-alls” ever concocted.

A child can understand this, the more one “earns” the more one pays in taxes.

Of course Jeff Bezos can give away his $141 billion and go work at McDs, heck w/a couple of dependents he’d probably avoid paying all federal taxes (exception FICA). But hell, he’s gonna need SS when he retires to put some gravy on that cat food for dinner each night.