Corporate Tax Reform Is the Key to Growth

It could increase the U.S. capital stock by $5 trillion and cause a $500 billion rise in annual income.

The debate over tax reform is focusing on all the wrong things: the personal rates and the deduction for state and local taxes. What will truly matter for the economy is corporate tax reform, which will lead to a major increase in capital spending by companies. That in turn will raise productivity and real wages.

These gains start small but will grow year after year as capital flows to corporate investment in the U.S. from the rest of the world and from other parts of the U.S. economy.
.. Since GDP is projected to be $30 trillion in 2027, a $500 billion increase represents a gain of 1.7%, or just 0.17% per year over the decade.
.. Cutting the corporate rate to 20% would raise retained earnings by about $2 trillion over 10 years.
.. The lower tax rate will also induce foreign companies to shift some of their production to America. And capital within the U.S. will move from low-productivity uses in agriculture and housing to corporate investments
.. It is troubling that America’s ratio of debt to GDP has more than doubled in the past 10 years and is projected to increase from 77% today to 91% in a decade
.. An extra $1.5 trillion of debt will raise that ratio to 96%. But I believe the advantages of the corporate tax reform outweigh the adverse effects of the relatively small debt increase.
.. The debt-to-GDP ratio, which was 35% as recently as 2007

Donna Brazile: I considered replacing Clinton with Biden as 2016 Democratic nominee

Former Democratic National Committee head Donna Brazile writes in a new book that she seriously contemplated replacing Hillary Clinton as the party’s 2016 presidential nominee with then-Vice President Biden in the aftermath of Clinton’s fainting spell, in part because Clinton’s campaign was “anemic” and had taken on “the odor of failure.”

.. Brazile writes that she considered a dozen combinations to replace the nominees and settled on Biden and Sen. Cory Booker (N.J.), the duo she felt most certain would win over enough working-class voters

.. Brazile paints a scathing portrait of Clinton as a well-intentioned, historic candidate whose campaign was badly mismanaged, took minority constituencies for granted and made blunders with “stiff” and “stupid” messages.

.. Brazile alleges that Clinton’s top aides routinely disrespected her and put the DNC on a “starvation diet,” depriving it of funding for voter turnout operations.

.. Perhaps not since George Stephanopoulos wrote “All Too Human,” a 1999 memoir of his years working for former president Bill Clinton, has a political strategist penned such a blistering tell-all.

.. Brazile reveals how fissures of race, gender and age tore at the heart of the operation — even as Clinton was campaigning on a message of inclusiveness and trying to assemble a rainbow coalition under the banner of “Stronger Together.”

.. Brazile abruptly and, she writes, reluctantly took over in July 2016 for chairwoman Debbie Wasserman Schultz.

.. Brazile describes her mounting anxiety about Russia’s theft of emails and other data from DNC servers, the slow process of discovering the full extent of the cyberattacks and the personal fallout. She likens the feeling to having rats in your basement: “You take measures to get rid of them, but knowing they are there, or have been there, means you never feel truly at peace.”

.. Brazile writes that she was haunted by the still-unsolved murder of DNC data staffer Seth Rich and feared for her own life, shutting the blinds to her office window so snipers could not see her and installing surveillance cameras at her home. She wonders whether Russians had placed a listening device in plants in the DNC executive suite.

.. top Democratic officials were “encouraging us not to talk about it.” But she says a wake-up moment came when she visited the White House in August 2016, for President Obama’s 55th birthday party. National security adviser Susan E. Rice and former attorney general Eric Holder separately pulled her aside to urge her to take the Russian hacking seriously, which she did, she writes.

That fall, Brazile says she tried to persuade her Republican counterparts to agree to a joint statement condemning Russian interference but that they ignored her messages and calls.

.. Backstage at a debate, she writes, she approached Sean Spicer, then-chief strategist for the Republican National Committee, but “I could see his eyes dart away like this was the last thing he wanted to talk to me about.” She asked RNC Chairman Reince Priebus, too, but “I got that special D.C. frost where the person smiles when he sees you but immediately looks past you trying to find someone in the room to come right over and interrupt the conversation.”

.. The WikiLeaks releases included an email in which Brazile, a paid CNN contributor at the time, shared potential topics and questions for a CNN town hall in advance with the Clinton campaign. She claims in her book that she did not recall sending the email and could not find it in her computer archives

.. Whenever Brazile got frustrated with Clinton’s aides, she writes, she would remind them that the DNC charter empowered her to initiate the replacement of the nominee. If a nominee became disabled, she explains, the party chair would oversee a complicated process of filling the vacancy that would include a meeting of the full DNC... The morning of Sept. 12, Brazile got a call from Biden’s chief of staff saying the vice president wanted to speak with her. She recalls thinking, “Gee, I wonder what he wanted to talk to me about?” Jeff Weaver, campaign manager for Sen. Bernie Sanders (I-Vt.), called, too, to set up a call with his boss, and former Maryland governor Martin O’Malley sent her an email.

.. Brazile writes that she inherited a national party in disarray, in part because President Obama, Clinton and Wasserman Schultz were “three titanic egos” who had “stripped the party to a shell for their own purposes.”
.. In her first few days on the job, Brazile writes that she also discovered the DNC was $2 million in debt and that the payroll was stacked with “hangers-on and sycophants.” For instance, Wasserman Schultz kept two consulting firms — SKDKnickerbocker and Precision Strategies — each on $25,000-a-month retainers, and one of Obama’s pollsters was still being paid $180,000 a year.
.. Brazile also details how Clinton effectively took control of the DNC in August 2015, before the primaries began, with a joint fundraising agreement between the party and the Clinton campaign.She said the deal gave Clinton control over the DNC’s finances, strategy and staff decisions — disadvantaging other candidates, including Sanders. “This was not a criminal act, but as I saw it, it compromised the party’s integrity,”

.. Brazile writes that Clinton campaign manager Robby Mook and his lieutenants were so obsessed with voter data and predictive analytics that they “missed the big picture.”

“They knew how to size up voters not by meeting them and finding out what they cared about, what moved their hearts and stirred their souls, but by analyzing their habits,” she writes. “You might be able to persuade a handful of Real Simple magazine readers who drink gin and tonics to change their vote to Hillary, but you had not necessarily made them enthusiastic enough to want to get up off the couch and go to the polls.”

Donald Trump, our first millennial president

Everybody — but especially the olds — loves to hate on millennials. We’re lazy, entitled, emotionally stunted, spendthrift, narcissistic, promiscuous snowflakes.

.. But if Bill Clinton was once our “first black president,” surely Trump can be our first millennial president.

.. despite the fact that as of Monday — more than a month after Hurricane Maria hit — four-fifths of the island still has no power. A quarter lacks clean drinking water.

.. This is hardly the first time Trump has insisted upon, or even invented, accolades to celebrate his own mediocrity. He claimed to have received environmental awards that never existed. His golf clubs displayed fake Time magazine covers featuring his face.

.. Millennial Trump overshares constantly on social media, sometimes even Instagramming his food. He live-tweets his favorite TV show instead of getting real work done. Although no longer a minor, he still requires constant helicopter parenting from the grown-ups around him, as if he’s in an adult day care.

.. he can’t tolerate speech that hurts his feewings . Words that offend him are “unfair,” “frankly disgusting,” “bad for the country.” He then tries every weapon available to shut down those words.

.. Trump personally demanded that the Senate Intelligence Committee investigate media outlets he dislikes and suggested that networks should have their broadcast licenses revoked. Perhaps unsurprisingly, in subsequent days a Morning Consult poll found that half of Republicans agreed with him.

Huh. It’s almost as if 19-year-olds aren’t actually the country’s greatest threat to the First Amendment.

.. Trump casts himself as a perpetual victim, the uncontested winner of the oppression Olympics.

.. As with millennials, Trump has taken on loads of debt — though to be fair, that seems to bring much more joy to Trump than to 20- and 30-somethings. Maybe because real millennials expect to pay it back.

.. Morally lax, prone to revisionist history and obsessed with identity politics, Trump exemplifies all that is annoying and wrong with my generation — at least according to every Lena-Dunham-despising crank who once walked uphill both ways.

.. Like any true millennial, Trump refused to pay his dues in an industry where he had no experience. Instead, on the strength of his personal brand alone, he declared himself entitled to the top job. Self-promotion leading to immediate professional promotion?

 

Republicans slip into a ‘predictable spiral’

Trump and Republicans have given clear signs they are moving away from tax reform (a simplification of the tax code that doesn’t necessarily reduce revenue) toward all-out tax cuts, financed by deficit spending.

.. Trump, who came to power promising to eliminate the $20 trillion debt, or at least to cut it in half, is poised to oversee an exponential increase in that debt. Republicans, who came to power with demands that Washington tackle the debt problem, could wind up doing at least as much damage to the nation’s finances as the Democrats did.

 .. There is no way to pass a comprehensive tax-reform plan of the sort Ronald Reagan secured — a simplified code, lower rates and closed loopholes — without bipartisan support. And Democrats want tax reform that doesn’t add to the deficit and doesn’t benefit the wealthiest 1 percent of households.But Republicans could pass a simple, deficit-mushrooming tax cut without Democratic support.

.. Treasury Secretary Steven Mnuchin and chief economic adviser Gary Cohn have not been reaching out to Democrats

.. Mitch McConnell has indicated he plans to use the same “reconciliation” resolution he used on the failed attempt to repeal Obamacare to allow for a party-line vote on a tax cut. That process would nominally prevent Republicans from ballooning the deficit — but they could avoid such concerns by using the well-worn gimmick of having the tax cut expire before 10 years.

.. Then, a debt-limit increase, possibly secured with promises to spend more money on defense (which would buy GOP votes) and domestic priorities (for Democratic votes). Next, a spending deal that busts previously agreed budget caps by allowing an extra $70 billion or so for an “Overseas Contingency Operations” slush fund. Eventually, a reckless tax cut doesn’t seem so crazy — particularly with midterm elections looming and no accomplishments to show.