Mr. Trump sold himself to voters as unorthodox as well as effective. He was going to be a different kind of president, a consummate deal-maker who would transcend the usual ideological divide. His supporters should therefore be dismayed, not just by his failure to actually close any deals, but by the fact that he evidently has no new ideas to offer, just the same old snake oil the right has been peddling for decades.
.. on Trumpcare, where the administration outsourced its policy to Paul Ryan, who produced exactly the kind of plan you might have expected: take insurance away from millions, make it worse for the rest, and use the money to cut taxes on the wealthy. Populism!
.. Back in 1980 George H. W. Bush famously described supply-side economics — the claim that cutting taxes on rich people will conjure up an economic miracle, so much so that revenues will actually rise — as “voodoo economic policy.” Yet it soon became the official doctrine of the Republican Party, and still is.
.. Yes, the U.S. economy rebounded quickly from the slump of 1979-82. But was that the result of the Reagan tax cuts, or was it, as most economists think, the result of interest rate cuts by the Federal Reserve?
- Bill Clinton provided a clear test, by raising taxes on the rich. Republicans predicted disaster, but instead the economy boomed, creating more jobs than under Reagan.
- Then George W. Bush cut taxes again, with the usual suspects predicting a “Bush boom”; what we actually got was lackluster growth followed by a severe financial crisis.
- Barack Obama reversed many of the Bush tax cuts and added new taxes to pay for Obamacare — and oversaw a far better jobs record, at least in the private sector, than his predecessor.
- Sam Brownback, governor of Kansas, slashed taxes in what he called a “real live experiment” in conservative fiscal policy. But the growth he promised never came, while a fiscal crisis did.
- At the same time, Jerry Brown’s California raised taxes, leading to proclamations from the right that the state was committing “economic suicide”; in fact, the state has experienced impressive employment and economic growth.
.. Why, then, does it persist? Because it offers a rationale for lower taxes on the wealthy
.. Donald Trump was supposed to be different. Guess what: he isn’t.
.. We might also note that a man who insists that he won the popular vote he lost, who insists that crime is at a record high when it’s at a record low, doesn’t need a fancy doctrine to claim that his budget adds up when it doesn’t.
Trump’s Renewed Focus on Health Bill Vexes GOP Tax Overhaul Strategy
Mr. Trump signaled last week that one of the reasons he has reprioritized health care is that he was relying on savings from the health bill to bolster the tax plan.
.. If the health plan is signed, “we get hundreds of millions of dollars in savings that goes into the taxes,”
- .. an additional 3.8% tax on high-income households’ investment income,
- an extra 0.9% tax on top earners’ wages and
- various taxes related to health-care, such as medical devices.
.. repealing those taxes and offsetting the effect on budget deficits by cutting Medicaid, the health program for the poor.
.. lower projected federal revenue by about $1 trillion over a decade.
.. Republicans on Capitol Hill worry that they may not be able to adopt a 2018 budget resolution because of intraparty disagreements on spending.
The Trump Elite. Like the Old Elite, but Worse!
Legislation can be crafted bottom up or top down. In bottom up you ask, What problems do voters have and how can they be addressed. In top down, you ask, What problems do elite politicians have and how can they be addressed?
The House Republican health care bill is a pure top-down document. It was not molded to the actual health care needs of regular voters. It does not have support from actual American voters or much interest in those voters. It was written by elites to serve the needs of elites. Donald Trump vowed to drain the swamp, but this bill is pure swamp.
.. There was no core health care priority that Republicans identified and were trying to solve.
.. There were just some politicians who wanted a press release called Repeal.
.. They could have drafted a bill that addressed the perverse fee-for-service incentives that drive up health costs, or a bill that began to phase out our silly employment-based system, or one that increased health security for the working and middle class.
.. They were more concerned with bending, distorting and folding the bill to meet the Byrd rule, an arbitrary congressional peculiarity of no real purpose to the outside world. They were more concerned with what this internal faction, or that internal faction, might want.
.. It would boost the after-tax income for those making more than $1 million a year by 14 percent
.. this bill the Republican leadership sets an all-time new land speed record for forgetting where you came from.
Think tax reform will be easy for Trump? Ha, ha.
“The rich will pay their fair share,” Trump the populist promised his supporters during the campaign, when he often railed against upper-class greed and special-interest tax breaks.
.. Treasury Secretary Steven Mnuchin has repeatedly pledged that the administration would offer life-changing, economy-transforming tax cuts for the working class. Any tax-rate cuts for the wealthy, on the other hand, would be fully canceled out by closing deductions, credits and other loopholes. On net, the wealthy would pay the same amount they are now — hey, maybe more!
.. Sen. Ron Wyden (D-Ore.) dubbed it the “Mnuchin rule.”
.. Trump’s plan would give rich people the biggest tax cuts of any income group.
That’s true however you slice it. The top 1 percent of taxpayers get the biggest cut in raw dollar terms, as a percentage of their incomes and as a percentage of total tax cuts. They’d receive nearly half the total tax cuts under Trump’s plan (and three-quarters of all the cuts under the House GOP plan).
.. owners of pass-through businesses (which include sole proprietorships, partnerships and S-corporations) to be taxed at a flat rate of 15 percent rather than the regular individual income-tax rates.
.. Just as all of Trump’s health-care promises proved impossible to square, so too will his tax populism collide with the plutocratic reality of his true priorities.