Republicans like spending money on the military. Most state-side military bases are in Republican red states and a huge chunk of military spending goes to contractors like Boeing, Raytheon, and Northrup.
11
What's Paul Ryan been up to lately?
10
GOP has been stealing from us since 60s..
Dems gave us SS and Medicare; a real necessary tools to have a healthy life; but GOP is spending money on wars and then also looting our treasury like pirates.
And I implore all red states to read, analyze and then vote.. just as they care for their guns and abortion.
14
Mr. Krugman of all people, should know that the Opportunity Zone "Fiasco" as he calls it, is barely off the ground and cannot be considered a success or a failure (given that the Treasury didn't even come around to clarifying the rules until a couple of months ago.
2
"Republicans are no longer willing to spend public money in the public interest." Thank you, Paul, for 13 words that sum up one side of the Republican coin. The other side is, of course: "Republicans are only willing to spend money if it helps rich people get richer."
11
Ironically, but importantly, government spending on public works and infrastructure projects would also result in payments to many of Trump's targeted beneficiaries - the well off owners and investors in the construction companies and material suppliers for these projects. Sure, this would be a different set of specific individuals. But as a class they would still generally be the well-off who reap the profits from these "public" expenditures. Certainly there would be benefits for labor as well, and federal procurement regulations would keep wages higher than what Trump and his real-estate development buddies typically pay for construction work. And, Trump would be able to take credit in the same way as his administration's support for military spending benefits the private sector companies that largely make up the defense industry and their owners and investors. A great deal of "government spending" is actually spent to buy goods and services from private companies. Which is probably better than thinking the US should directly run the myriad and changing mix of skills and materials / products.
2
The people/monied interest groups who wrote that gigantic boondoggle of a tax bill were not "the people" nor their elected representatives, and b) unlike the "government" which SHOULD have, by law written it, they knew PRECISELY what they were doing. 'nuff said.
7
Mr Krugman refers to a recent infrastructure proposal, "... in practice the plan would have been more about privatizing public assets than about promoting new investment". Can anyone tell me how this would be different from any other legislation that gets through the Senate?
This administration is putridly corrupt and draining not the swamp but the public treasure chest. They are so emboldened that they do this in plain sight, bankrupting our democracy. Our young Hong Kong brothers and sisters are showing us the way.
6
The people who say they support Trump and other Republicans because they say Republicans get things done must admit these financial misdeeds are what is getting done.
8
Also, and not just for us in California or other blue coastal states, the elimination of SALT deduction inflicts pain on the average person even as if heavily favors the wealthy. Want to deduct the interest on a mortgage? You still can if it's on a rental property, but you cannot any more if that mortgage is the one keeping a roof over your head. And if you think this wasn't intentional I have a bridge to sell you.....
6
If only "the Wall" counted as infrastructure. But it doesn't really help business get done, it just reduces the work force.
5
"Trickle-down economics" behaving exactly as it was designed and intended.
7
The real problem is the Republican Party. It used to be the party of long term policy makers, resistant to quick and futile policy gestures, but committed to long term realistic solutions.
The party is now taken over by the extreme right (due to the primary system) with leadership and foot soldiers hardly differentiated in terms of ability. The Republican's have raised campaigning to an art form, with the ability to craft messages to appeal to a large segment of voters, solely for the purpose of securing their vote and not with a view to actually delivering anything for such voters.
Take healthcare, for example. The Republican's nationwide campaign on eliminating the ACA, while offering absolutely no alternative. Republican voters don't hold Republican state legislatures responsible for ACA related financial misery, even though insurance price increases were deliberately caused by Republican states declining Federal subsidies and not expanding medicare availability as per the ACA plan. Rather than work to a solution in healthcare, the Republican's use (abuse?) the issue for the sole purpose of getting votes.
Tax policy is yet another example. Gun safety/control is another. Republican positions reflect no policy goal - just vote mongering.
The Republican's are not the party of solutions anymore. They are the party of professional campaigning and vote mongering.
In the words of their current leader, sad.
4
The far Right Republican takeover is complete. I agree with Paul Krugman about taxes, infrastructure etc. Not only have R's abandoned the Poor, the Middle Class and anyone not in the top 10% of the 1% but they have abandoned humanity.
There was an article a few days ago in the Times reporting that a woman in jail was left to deliver her own baby in her jail cell.
Come on people; where is your humanity?
She was in jail for a white collar crime. Not that the type of crime should make any difference. They knew she was pregnant. No nurse, medical staff or hospital. Beyond Comprehension.
I knew that Republicans don't care about anyone but themselves, but allowing what happened in that jail goes beyond the pale. Many people failed to do their jobs at a basic level.
Where was their humanity? How could they think that their actions/lack thereof were acceptable? HOW?
This is what happens when getting rich and being rich or I have to get mine type of thinking becomes then norm.
We are in danger of losing our souls. This can't be allowed to continue. Republicans must be defeated at all levels of government. I see no other culprit. Just look at Mitch McConnell. Power and money are the only things he believes in and he insists on taking it away from those of us he deems not to deserve it. Disgusting human being.
We need those who have lost their way to find their humanity, once again.
18
Paul, I hope you don't mind my proposed alt title:
"The Great Empire Heist".
Too few people writing to the "Times" and writing for the "Times" seem to understand the massive impact of this EMPIRE on the political, economic, and social fabric of our lives and futures of our children.
5
Krugman looks the other way but Bernie Sanders and Warren and AOC and most Progressives have a cure for the corruption problem, the same cure FDR used: empower Labor and regulate the financial sector, return to more progressive taxing and hire to work on infrastructure problems, and make education better and more available to get the use of all the talent being wasted by working one or more low pay jobs and just getting by.
The existential threat of climate change our corrupt anti-science administration pretends doesn't exist needs to be fought. It's not enough to drain the swamp, we have to fight for our lives and just one country can't win. This is a world war we all must fight as allies remember that word? Allies. Maybe trying to save our planet would turn oligarchs back into citizens.
7
@Saint999
Saint, you are a Saint for saying what you did.
The underlying problem with humanity at this point, IMHO, is that very few people, perhaps a few hundreds, understand that in this 'globalized world' --- of which Tommy Friedman has written about since the fall of the Soviet "Evil" Empire (aren't they all Ronnie) --- 'our world' of 'we the global citizens' is actually no longer a world of countries, but is truly one indivisible world of just people, and there are only two possible conditions that this radically 'New World' can take-on.
We can only have either global democracy or Global Empire.
Be careful when you go into the voting booths anywhere in this world --- and pull the lever marked democracy --- not the lever labeled EMPIRE.
4
Here is my problem with the Tax Cut losing revenue crowd. We have a $1T deficit. Let's say the Tax cuts lose $200B every year and don't contribute anything at all. That leaves an $800B deficit that has nothing to do with the tax cuts. So to blame the deficit solely on the Tax Cut is absurd. The problem isn't that we tax too little, it that we spend too much. (paraphrasing Ronald Reagan)
1
Why is is that the worst parts of America - the inner cities - are all controlled by Democrats and have been for decades? COuld Democrats be corrupt or incompetent? I am looking forward to a Krugman article on that very topic.
As for crumbling infrastructure, perhaps Dr. Krugman can tell us whatever happened to Obama's shovel ready projects. Did he forget the shovel? Did they go the way of his promise about being able to keep your doctor?
Personally, I hope the Democrats run on a plan to raise taxes. Everyone knows the government is better at spending your money better than you!
2
@Eric Since taxes DO need to be raised for needed things (like infrastructure and energy reinvestments) they should. That is where you and I differ. You republicans are all the same: You want something, but don't want to pay for it. I've got an idea: How about yet ANOTHER tax cut that benefits only the wealthiest of us all? Why not balloon the deficit even more to levels way beyond what Obama oversaw?
5
First, there are a large number of states mainly in the South with more poverty and lower average family income than most inner city neighborhoods and they are all run by Republicans. Second, about $1 billion of shovel ready projects were constructed in 2008 and 2009 to reverse the Bush recession. Even more could have been built if the Republican Congress had been willing to appropriate the amount requested. I was a civil engineer and worked on many of them.
7
@Jack Kinstlinger
Where did the other $799 billion go?
The other item about “targeted tax breaks” that throws me into a tizzy (and that appears to be almost never mentioned) is that, even when a tax break is enacted for a lower income person, ultimately it STILL ends up profiting the rich.
For example, the Earned Income tax credit, which is universally supported, provides income support for low income people. All well and good. But where do those funds come from? Tax revenues. Which, unless the rich are taxed at a higher rate to offset that support, comes from the middle class.
And where do those people work? Well, if they are working at a locally owned small business you could argue that the money is going to support low income communities, but in many cases those people work for a large corporation. Owned by rich people. Who pay low wages and non- existent or poor benefits to their employees. Because those employees will get Medicaid, section 8 housing, earned income tax credits, etc to make up the difference. Which are all paid for by our government, which is to say, us. And it’s not like those workers are living high on the hog.
This infuriates me to think that McDonalds, WalMart, etc have this baked into their business plans. And we don’t howl!
9
YOU LIE! Just kidding, unfortunately, what you are reporting here are straightforward facts that cannot be disputed, in fact while you did mention the GOP's last big public spending Act to directly benefit lower income families, CHIP, you did not even bother to say that the GOP has been trying to pull the guts out of that Act for years. Private campaign contributions must eliminated or capped very low, term limits for all congress similar to POTUS. Term limits for SCOTUS, eliminate electoral college, increase senate proportionate to state populations.
2
The central character from Ayn Rand's Atlas Shrugged is asked rhetorically by his do gooder brother in law if he cares about the poor and underprivileged in America. He responds,"No, I don't." Republicans may admit this to each other over cocktails at the country club but never on the floor of congress. If the tax bill was rammed through without hearings why would they even pretend to care about the poor with phony opportunity zones?
110
@tomster03
Because they need their votes. Period.
14
"Republicans are no longer willing to spend public money in the public interest."
Yep, that's it in a nutshell. That's one of the core tenets of the far-right, extremist ultra-conservatism that the Koch brothers and others of their ilk have been pushing (and funding) for decades, and that has now completely taken over what used to be the Republican party. That line of thinking dates back to the John Birch Society and was expanded upon by James Buchanan (the extremist "political economist," not the former president).
For a complete history of the movement to undermine democracy and entrench oligarchs and their paid minions in permanent power, read _Democracy in Chains_, by Nancy MacLean.
5
At some point, (how long does it take them to figure this out), they will run out of other people’s money to support their luxury flop houses.
4
The GOP have forsaken everyone of us and forgotten the mantle of "noblesse oblige." With few if any tools we as ordinary citizens have to use against these one percenters; I see no future for a greater and growing poverty class.
So while the infrastructure fails to support the people and only bless the wealthy, the nobles of this nation stack the cash as high as they have stacked the deck against us.
Even if we ran into the streets like those brave Hong Kong residents, the nobles would simply do what they did at Zuccotti park during the occupy Wall street protests.
Strange how the nation founded as a peoples country has now become a nobles only club.
5
When you look closely at who the Founders were, you will realize that they were the same tax dodgers dishing noble doublespeak that we have today.
1
Just an observation that government policy by tax cut isn't something JUST limited to the rich. After the 1980s, it became "cool" to be for tax cuts, so Democrats (and I am one) also started proposing tax breaks for things that would be better accomplished by spending, because it was better to be for a tax cut than for spending. The problem is that tax cuts are permanent and spending isn't -- you get something in the code and it usually stays. But whether the government spending $1,000 on something or gives someone a $1,000 to do that same thing, the economics are the same. We've got to get rid of this mindset that doing something through a tax provision is somehow morally superior.
4
"Why has “infrastructure week” become a punch line for political jokes?" Because infrastructure was part of Trump's "big con," which is ongoing.
6
On the last leg of a European trip, Vice President Mike Pence is scheduled for two days of meetings in Dublin, but he is staying on the other side of Ireland in Doonbeg at a private golf club owned by President Trump.
It was Mr. Trump who made the “suggestion” that Mr. Pence, his family and his entourage stay at the Trump International Golf Links & Hotel Doonbeg, Marc Short, an aide to Mr. Pence, said on Tuesday.
Unbelievable that this man can "suggest" that the government entourage stay in "HIS" hotel, ca-ching, payday, to the tune of how many millions this time? And it's all out in the open.
143
@Moehoward
The best place to hide is in plain sight. Trump has blown past so many rules, laws and traditions that this type of homage to the King is now accepted as business as usual by many.
20
I keep saying it. The Democratic agenda for the 2020 election should be plain and simple: The Republican Party is a greedy and corrupt enterprise from top to bottom, focused on enriching corporations at the expense of ordinary Americans.
I know. American health care is hot mess, and Bernie has plan. Warren has a plan for everything. These may all be useful, and we shouldn’t throw them away because they can be the foundations for the reform to come. But to initiate that reform, the Democrats need to win big (or bigly, if you prefer.) To do that we need to simplify the main idea.
So: Republicans are greedy and corrupt, starting with their leader.
Trump won by convincing ordinary Americans that he was on their side. It becomes more apparent by the day that he is on the side of corporate interests, not ordinary Americans. This campaign needs to minimize the wonky ideas (not get rid of them) and change the conversation to highlight who is really on the side of ordinary Americans and who is a greedy and corrupt capitalist actively working against regular Americans.
Wonky won’t beat Trump, but calling him what he is can do the job.
9
"... such policies rarely “trickle down” to the people they’re supposedly intended to benefit."
From now on any such policy's claimed "trickle-down" benefits must be *built in* to the law. E.g., to receive a corporate tax break, a company must show it has given its employees raises as mandated by the law providing the tax break.
2
Opportunist zones.
6
"The Great Tax Break Heist
The many, many fiascos of policy by tax cut."
"And it has made a handful of wealthy, well-connected investors — including the family of Jared Kushner, Donald Trump’s son-in-law — even wealthier.
It’s quite a story. But it should be seen in a broader context, as a symptom of the Republican Party’s unwillingness to perform the basic functions of government."
This is just one more example, in an entire library of examples, of Trump and his republican supporters acting not for the best interests of all Americans, but for their own personal wealth and power. If American's do not belong to the rich 1%, they don't count to the republicans.
Enough of these rich welfare hogs. Next years vote will be our time to run the rascals out and take back Our Government.
7
@RetiredGuy unfortunately, it still gives our President another year in which to further plunder our fine republic. Where are the adults in all of this? Makes me wonder if the Democrats are leaving Trump to his own devices because the White House will be easier to attain as the nation slides into recession or worse.
2
Wait, is there anyone informed who actually thought this was a "tax cut" vs. a redirection of funds away from the middle class and blue states to DJT and his cronies?
9
@Working Mama Yes. They're all Republicans. And they all still think trickle down is the way to economic prosperity for the masses. However, they are NOT informed.
Paul, I am sorry to say, despite it all there is no Democrat who will receive enough support to defeat Trump. Every one of Trump's supporters will turn out to vote. More than I can say for Democrats. Except for Joe, who will not make it in the long run there is little to no support in the Black and Hispanic communities for any one of the other declared candidates.
@MelGlass Both parties are run by monied interests who are really not different from each other, even between political affiliations. Neither Democrats or Republicans care about the poor. It's just that the Dems like to pretend that the poor and middle classes think the party works for them. It's not reality. And it's why Dems lose
While I'm in agreement with the gist of the article, I have to point out what is missing from the anti-opportunity zone argument. This zone has and will encourage private investment in development projects in areas that will benefit from the increased tax revenue that will result from them. That is the property tax increase. These are based on the value of the property which will increase by factors of 10+. Property taxes benefit the counties and cities where they are incurred. They pay for local infrastructure, safety, parks, roads, education and many other services which directly benefit the local citizens. Many of these developments would not 'pencil out' for bank loans, but do for the 'long hold' investors who can factor in the tax breaks.
The shorter term construction and longer term maintenance jobs also would not occur without the developments.
Yes the wealthy will likely benefit more than the poor from the current zone system, but perhaps this is another idea that needs 'tweaking' rather than elimination?
1
@TW
You completely misunderstand what is going on and has been going on since the republicans started this con game in the reagan admin.
Your argument is the lie they use. the reality is that the "tax breaks" given are exactly those increased taxes you claim is the purpose and benefit of the tax breaks.
they also rejiggered the language of the law so that gains can be called losses and failure to make a profit is a loss that is not their fault to the point that nowadays you can claim X profits are possible and if you do not make those mythical profits yo9u can declare a loss based on them and by that avoid taxes.
Everything republicans do is about stealing from the working people directly and via stealing their taxes.
4
As Pence flies in Air Force 2 from one coast of Ireland to another each and every day to attend meetings so he can stay at a trump Golf Resort....recommended by the owner himself...er ...commanded by the president of the United States while
he attends to business....his business.
think of the cost.....
then...
think of a crumbling bridge
think of even one child without enough to eat
think of their healthcare
think of the cost of your medications and how often you skip them
think of underpaid teachers
think of people hoping for a next job they don't qualify for..because of little or no help from elected lawmakers
think of inadequate, outrageously expensive health care.
think of returning vets living on the street.
think of their suicide rate.
think of a planet being encouraged by this administration to
die of fire and flood......
think about undrinkable water in American Cities.
think about how much money trump is making by charging the taxpayer for a government entourage stay at one of his golf clubs....
think of the disappearing minuscule middle class tax cut.
think of the tax cut for the top 1%
make a list of the promises not kept.......
Now........add your list to this list......
Then......if you have to crawl to the polls next November
vote this phony scam artist out of what was always the
most prestigious office in the world.....an office he never
could have won without happily accepting the help of V. Putin.
.......
11
Trump is the diabolical mind squeezing the poor.
For this reason, it is inexplicable why the Koch brothers did not like Trump, when they were promoting exactly what this man is doing to the American poor.
2
"one of our two major political parties has basically turned its back on the very idea of productive public spending."
What a nice way to say that the self serving, amoral, criminal element of our United States of America has has finally come out of the closet where it has been hiding behind a masquerade of patriotism and respectability.
The only difference between the crimes they are presently committing and those they have been committing for the last 40 years is that now they there is an insane individual pulling the levers who is deluded to the point that he actually believes that He, personally, is making america Great.
He does not care about keeping the suckers stupid.
5
"Written by lobbyists" Not unique bet why I must ask; we sure as hell did not elect them. I understand the First Amendment allow for petitioning to redress grievances. But what gives them the right to write laws to favor their clients. I know this is not new but this is just another example as to why we are not operating as a democracy when the average guy/gal does not have a lobbyist working for them.In fact I dont believe most legislators represent their districts but rather their donors
2
@James T ONeill
You ask "But what gives (lobbyists) the right to write laws to favor their clients?"
The answer is those two Senators and the one House Representative YOU voted for. And all the two plus one that most of US voted for.
1
@Ed C Man We vote for representation. We don't - willingly - vote to send representatives to congress / senate to represent somebody richer who will help keep them employed as legislators. In other words, our system is broken because what is happening in D.C. is happening against our best interests. What do you suggest we do - NOT vote?
That old saw about a wealthy businessman being asked if he was interested in entering politics says his reply was he would, once he had enough money to buy his own politicians.
Money speaks. Big money rules.
Tax rules are written to avoid taxing the wealthy. Businesses and inheritances hold the national wealth and take national income in ever more lopsided ways.
It’s the eternal fight between capitalists and labor. Republicans are on the side of the capitalists.
Tax reform may fix the problems. The fix must start with eliminating all exemptions and deductions and exclusions by wealthy business owners, and corporations. Funny, they have the money to pay dividends to their owners, yet many have no taxable income. They refer to it as a “loss.”
Each should pay a fair tax on every dollar of earned and investment income, that is gross revenue, since profit can be whatever their tax lawyers and accountants say it is.
Big money rules Congress, and the payback legislation always favors the wealthy.
Tax expenditures, if properly reviewed and amended could have counter acted the nonsense of the ill-considered corporate tax cut legislation. Here is a window into tax expenditures which lists corporate welfare at its best:
https://www.jct.gov/publications.html?id=5148&func=startdown
A difficult read to be sure. Nonetheless, a thorough perusal is not necessary to capture the extent to which tax expenditures favor corporate greed over, you know, we ordinary taxpayers.
I'm no legislator, but it seems like narrowing the "oppo zone" provision to prohibit high-end development, make the tax break dependent on projects that demonstrably benefit poor communities, would not have required a high degree of verbal skill. Do we not have hard-core rules requiring a certain amount of time for examination of bills before they can be voted on? If not, this is clearly needed going forward.
1
Stop complaining! We put them in power and a nation gets the government it deserves.
1
@Cassandra - Nope. In 2016, the loser of the popular vote "won" the election. Also in 2016, Senate Democrats got 20 million more votes than Senate Republicans, thanks to the outdated provision that allows two senators per state, regardless of population. And House Democrats got 3 million more votes than House Republicans yet Republicans kept a 23 seat majority, thanks to gerrymandering and voter suppression. In other words, we have government by the minority at all levels, meaning we did NOT elect these people.
5
"Self and Family first" may embody the ethics of the Hatfields and McCoys--and may be dear to other devotees of "famiglia,"--but this norm ill befits the leader of the world's most powerful democratic republic. Nonetheless "family first" may be our best guide to understanding just what the Trump presidency is all about
1
This is the current Republican Party Platform: Welfare for the Ultra Rich!
4
While I agree that the OZ program is poorly thought out and even more poorly put together, I disagree with the notion that targeted tax credits and other tax benefits should not be used to incentivize private investment in low income communities. The Low income Housing Tax Credit, Rehabilitation Tax Credit, and New Markets Tax Credit have all been very successful in accomplishing the policy goals they were intended to serve. Indeed, these programs can and should be expanded.
The Code remains a very powerful tool for implementing public policy goals by incentivizing private activity.
1
I don’t think throwing billions here and there solves the problem. If states really wanted new infrastructure they would get rid of the pork, get serious about design (a huge cultural problem we don’t address at all) and do it ourselves. Look at the Gateway project or Penn Station — the state is stuck on a tunnel assumption when it could build a bridge to a new 2Penn Station. It all starts with design, not an arbitrary dollar figure.
What we have is a major popular design culture problem, filled in with unaccountable bureaucrats.
2
The reason that nothing has happened in the arena of infrastructure is that we have not had enough bridges collapse. Nothing is going to happen in the area of gun reform until the United States has a population of 500. The United States doesn't respond to problems anymore, our leadership is more on the reaction side. When you look at about every position posited by the GOP you have to ask yourself what do they believe in? When you ask a member they will recycle the old Reagan lines of small government, laissez faire capitalism and tax cuts.
The administration's choice to give tax breaks rather than use public spending for things like infrastructure projects doesn't surprise me. Capital abhors public control where profit can be made, and Republicans decided a long time ago that it was better to serve capitalist interests than the public interest.
5
"Tax scams are the tribute policy vice pays to policy virtue."
Taxes are in every respect but one identical to the crime of extortion. The only reason tax collectors don't go to jail is because the state grants them immunity from punishment for their crimes. Those who game the system are those who reap benefits derived from taxation.
No matter what they do to avoid paying taxes, short of lying or cheating, it isn't people avoiding paying taxes who are morally corrupt. The corrupt ones are those who rely on tax revenues for their daily bread.
All tax laws include enforcement provisions, which means that government agents are enabled to resort to force, violence and/or coercion to ensure collection. Those who game the system" to avoid paying extortion are to be admired, not vilified. Those who depend on violence for their daily bread are the ones who should be held up to contempt. And Professor
Do you have fire and police protection? Did you utilize public roads today? Did you benefit from public education or publicly funded research? Does your bank provide deposit insurance? Has anyone you have ever known used federal home loan programs, received retirement checks to assist with living expenses, or utilized Medicare?
Is the only book on your bookshelf “Atlas Shrugged”?
This is notionally a democracy and We the People are the government ideally.
Can you think of any civilization which hasn’t relied on some form of taxation?
You missed the target completely, but you did an excellent job of laughably distracting us from the subject at hand.
@Ned Netterville utter rubbish. Taxes are the price you pay for living in a civilized society. You have roads, controlled air traffic, fire protection, etc. all as the result of taxes. You couldn't thrive or even just survive without the services that taxes provide.
Prof. Krugman writes about how "one of our two major political parties has basically turned its back on the very idea of productive public spending." Let's not forget, however, that it wasn't long ago that President Clinton declared that we were witnessing the end of big government.
The Democrats, behind the GOP-lite Clintons, are as responsible for our decaying public society. I am thrilled that so many young, fresh progressive faces are finding their way into government service, and I look forward to electing Elizabeth Warren as our next president.
3
It us depressing ... but obvious ... that the Republican party is driven by greed ... pure and simple greed. Many of those in office don't have the talent needed to get rich in business ... but they do have is an innate instinct for the grift. They are good at making lies seem true ... making attacks on the defenseless seem philanthropic ... and making self serving seem patriotic. Think Mitch McConnel or Paul Ryan. That talent for sleaze ultimately leads them to the Republican party ... the epi-center for political hypocrisy. Today's Republicans feed their greed by doing whatever is necessary to keep their grasp on political power. So far ...they have retained that grasp by bilking the legions of white suckers with misplaced anger and hatred who believe voting for Trump is voting for a kindred spirit.
3
I prefer to call it 'The Paul Ryan'Tax Scam.'
6
I support the wealth tax. My rationale is that the prosperity sappers (referred to as "job creators to cynical republican politicians) would seek seek more fertile ground in other countries, and thus release the vast majority of Americans to pursue their livelihood unburdened by these parasites.
2
Republicans haven't believed in public spending since the days of FDR who joked they "want to throw old people on the trash heap like wrinkled rinds". They upped their game to include the poor, infirm, and immigrants.
6
The only and sure solution to the “Great Heist by the UHNWI” is ‘Wealth Reform’ — just uttering those two words will make the Great Looters shudder and quake in fear!
5
These property developers are the Welfare Queens of today.
3
when your party's philosophy morphs into outright hostility towards governING, this is the outcome to be expected. For America to progress, it is essential that this party be put out of its' self induced misery by terminating its' existence in the 2020 election.
Enough already. You crooks know how to steal and use the govt to help you steal. Now it's time to help put US out of YOUR breathtakingly corrupt cheating misery.
5
Trump and McConnell are not finished yet enriching the rich and powerful like themselves as mull over capital gains as the donor class is making so much money they may complain about paying capital gains. THe donor class ,fossil fuel industry and the NRA owners of the GOP want more money and if social security and medicare to be cut so be as in their opinion they are freeloaders and loser unlike Trump a real winner draft dodger and tax dodger and sexual predator.
4
Once you account for the GOP as almost across-the-board bad faith actors, the rest of their operation makes sense. Expecting integrity and follow-through on a party that has built its business model on lying to and pandering to the 99% while picking their pockets on behalf of the top 1% aren't going to act in the public interest on any projects that don't help their clientele.
The real question is if/when the Democrats will realize that they need to go all-in with the 99%, instead of cozying up to Wall Street -- they'll never outdo the GOP in kissing up to the top 1%.
3
Thought experiment: consider Republican voters, specifically Trump voters. Now, factor out single issue voters concerned primarily, even obsessively, with guns, abortion, the Rapture and how to bring it about, or frightening myths such as an invasion from the South. Who is left?
118
@Pottree
Ivanka and Jared
21
@Pottree You have hit on precisely the genius of the GOP electoral strategy. Convince people that a single issue is crucial to their personal well-being and they will vote for you, at the expense of their own interests and those of their children. It has worked brilliantly with abortion and guns.
51
@Pottree you forgot racists. That's a YOOGE GOP constituency these days
24
Greed is not the problem: if we were all reasonably greedy we would collectively agree on a reasonable balance between private and common wealth, and live in a healthy society of competition, cooperation and compromise.
The problem is fear and shame. A majority of Americans have been conditioned to believe that there's a powerful consensus that powerful individuals are better than us and that it's shameful for the less powerful organize together for a fairer society.
We need to get over this and see that the rich have no actual strong foundation: their power hangs by a thread. Just as the tax bill passed by a simple congressional majority, it can and will be reversed by the same. When a solid and stable 60% of Americans vote our own interests and hold our public servants to their promises, things will turn around. We don't need a revolution (those things rarely turn out well), we need a consensus on concrete reforms. A few well-executed changes will build confidence that we can make our own lives better.
4
@Dan Coleman
Dan, our’s did — “turn out well”.
As Justin du Rivage in his 2014 deeply researched and definitive history of our first one, which he simply titled, “Revolution Against Empire” — pointed out the obvious, that some kind of ‘Revolution Against Empire’ is essential for any country, or any kind of government, to achieve in order to avoid the inevitable and traumatic ‘collapse of all Empires’.
Most of the advanced countries of our world have learned about the danger of Empire that the late great Jewish intellectual, Hannah Arendt, tried to warn her own German people about in the First and Second World Wars of Empire, when she said:
“Empire abroad entails tyranny (and looting) at home”.
1
Capitalism is an economic system. However, when wealthy capitalists take complete power, they tend to favor the wealthy as the only worthy beneficiaries of their government largess.
Our founders were generally farmers, both rich and poor, both educated and uneducated, but they had sufficient vision to recognize the frailties of the human condition, such as selfishness and greed and created a checks and balances system to provide a means of guarding against abuse of power.
The system may break down and become imbalanced but it has always, in the long run, righted itself.
We have seen the control of power by very wealthy capitalists before, in the South by the plantation owners--abuses righted by the civil war; rich capitalists in the era of the industrial revolution, righted by one of their own, President Theodore Roosevelt with his implementation of banking and capital reform in his "trust busting" and enactment of the Clayton and Sherman antitrust acts--followed shortly by the creation of the graduated income tax; the teapot dome and lasiez-faire policies of the Republicans of the 1920s by the Great Depression and FDR's (a member of the rich capitalist class) recovery and social welfare policies.
Now we find ourselves at a similar dilemma--will our system right itself peacefully?
4
@Ironmike
Looks like this time a wealthy guy from New York won't be the one to save us.
Clever allusion to definition of "hypocrisy" found in Samuel Johnson's "Dictionary."
1
I meant Paul, not David, sorry...
Any Republican: "I'm gonna get mine and screw the rest of you."
4
The GOP turned its back on being productive when Obama was elected. It was the GOP that vowed to make Obama a one term president no matter what it took. They stated that they would not work with him at all. And they didn't even when that stance failed to make him a one term president. They wasted 8 years of our lives on being stubborn, racist, and stupid. Those were years that could have been used to head off more disintegration of our infrastructure, worsening pollution, more people losing jobs or being unable to support themselves in retirement, etc.
Trump is merely the icing on the cake of stupidity they baked themselves. What they have failed to realize (and if they realize it it's even worse) is that their refusal to improve the lives of average Americans will backfire on them. If we cannot get the medical care we need because we can't afford it public health will suffer. If we cannot spend money to keep the economy going everyone suffers except the extremely rich. If our roads crumble, the bridges fall or become too unsafe to cross, the rail system fails, our air traffic controllers retire and aren't replaced, we have a horrible disease afflict our livestock and or our crops, we don't fund basic research, and we continue to stigmatize all immigrants, the country will fail.
But hey, it only took a little more than 225 years to make America nonfunctional. That's some kind of achievement isn't it? Thank you GOP.
9/2/2019 7:39pm
11
Recommendation: "Tax scams are the tribute [that] policy vice pays to policy virtue."
South Carolina Senator Tim Scott, the only black Republican in the Senate is a big proponent of "opportunity zones." He claimed they would bring jobs to rural SC and thereby there would be a trickle down effect that would also improve living conditions and schools, among other things. I never bought it, but I'm still sad to see this seems to be one more Republican scam to pay off the wealthy at the expense of the poor.
2
Since at least the days of Ronald Reagan, the Republicans have demonstrated that they can run for government by running against government. They repeatedly claim that governments only exasperate problems rather than solve them, and then proceed to prove their thesis when they are the government.
4
This is a case of "SWAMP the DRAIN". By overwhelming the drain, you STOP the TRICKLE-DOWN. You then gather the CREAM from the top.
Paul, I think you missed that one.
3
The rich are firmly in control of our government, because it is childishly easy to manipulate voters today and to achieve a majority of seats with a minority of votes.
America is lost, things will only get worse.
5
Paul you could have greatly reduced the length of your column today, and made it far more impactful and far easier for any non-economist (e.g. Emperor Trump’s economic advisor, Larry KudLow) to understand the Republican policy of economic looting for the UHNWI — if you had just quoted your fellow Nobel Laureate (2001), George Akerlof, when he simply stated of George W. Bush (and all Republics);
“This is not a normal form of government economic policy, but a form of looting!”
5
One of the reasons that Americans are so disgusted by politics is the degree that both parties indulge in corruption, primarily to accumulate unspeakable and illegal wealth.
The Republicans, in their ceaseless craving, stuff their pockets with all sorts of tax benefits designated for the public good. This lawlessness is accomplished through the tacit agreement and partnership between private enterprise, government, with a good dose of judicial malfeasance.
One only has to look at NYS & NYC to witness how the exploitation of tax benefits (421-a) to the real estate industry has victimized the very people this legislation set out to help Financed by municipal bonds, the developer barely has any skin in the game. Rather the city gave away irreplaceable pubic assets to increase private wealth.
It is Democrats who are the stars of this public scam. Bloomberg threw open the door so all his real estate buddies could feed at the though of the 421-a slop. All of Bloomberg’s wealth could never have provided him with the power to eviscerate NYC beyond recognition. He loved it so he even stole a 3rd term.
But De Blasio, our progressive pay-to-play oaf of a mayor did nothing. He continued not to hold developers accountable, including no audit of construction costs as well as enforcement of the 421-a law. Did this program come close to addressing affordable housing? NO It increased homelessness that approximates New Delhi.
Progressive, my eye. And Cuomo is no better.
2
Please, God, I don't think we can stand any more tax relief.
Raise our taxes and SAVE US MONEY!
Gee! Who knew? Ronald Reagan's tax cut did not boom the economy - just made the rich richer - who knew? Not the Chicago School of Economics
We pay about the least for domestic spending and definitely the most for military spending. Christian America supports the military - not people.
Join me in blaming the Christians for everything. Don't they SO have it coming? The Judas Christian idolaters, I mean, the majority of Christians.
2
Trump, Kushner and all their elected Republican sycophants. have created a transactional government. Under such an administration and arrangement, the welfare and needs of the nation take a back seat to the self-aggrandizement and personal wealth-building of the occupants of the WH.
2
How sad this is where Republicans are. We have a super power. VOTE THEM OUT!!
2
I know I am being negative but what is the purpose of these articles any longer? For decades now the Republicans have promoted policy that wholly favor the wealthy while sticking the "lessers" or the future with the bill. This is evident in vast increases in national debt and greater income inequality. These are facts that can't be denied. At this point the only story worth telling is how Republicans know that they needn't do anything positive for the people who vote for them because they have successfully sold their constituents on the idea that Democrats are worse.
This article and those not written by Republican backers need to address this simple fact. Sadly the Conservative columnist all perpetuate the Republican narrative while still trying to sell an ideology that perpetuates so much that is wrong with our country. As long as you try to sell yourself as fair and balanced the truth will never be known.
If you mix clean, pure water with raw sewage you don't end up with something potable - you end up with something that you may be able to get down easier but it's still going to make you sick. Everything in this article is provable to be facts but it is rendered meaningless because you promote other ideas that deny this truth. It is far beyond time that a stand is made and a more skeptical eye is placed on ideology that has the flavor of truth but in the end is toxic. Is the purpose of this paper to inform and educate or is it to sell newspapers?
1
@Lucas Lynch Yes, the GOP has dressed up the Democratic as tax and spenders, while being guilty of the same folly they accuse their rivals across the aisle of. And as we stare down at year four of our Trumpian odyssey, I feel there's not a Democratic candidate who's speaking to me. Just as the GOP has swung to the far right, the Democrats are all the way to the left. And while they're good at spotting and naming the problems, they are not addressing them. Multiply my observation by millions and you see how we stand a real risk of 4 more years. Imagine what 4 more years of Trump could do to our Replublic.
Taxes are the original crowdfunding of civilization. And cutting taxes is a divestment from ourselves and our society. Here is the essential flaw of trickle downers. How do you convince private sector to invest in a society that is busy divesting from itself? You don't. If you think that makes a great sales pitch then I have a condo in Trump Tower Moscow I'd like to sell you. It has a view of Sarah Palin's house. Just wire me a million rubles.
4
do not give to those who are not rich is the GOP tax policy.
those who are not rich, in their small minds, are undeserving.
2
Blame Obama. Blame Hillary. He was so intent on being a mediator, allowing the R's to block him at every turn. The voters blamed D's in 2016 for their lack of progress. She ran an incompetent campaign against Trump.
Just think where we COULD be if OUR "leaders" had done THEIR jobs.
3
Yes, but look all that fun focusing on Scaravans and the Wall to save us. Bridges, highways, tunnels— if they aren’t on the news on the Southern Border they just don’t produce Republican votes.
Governance is for suckers. Let the Democrats attempt it and we’ll cry about the crushing deficit— and the immediate need to cut Medicare and Social Security.
Krugman breaks down the Republican playbook adroitly and astutely. But who breaks this pattern when the electorate can be so easily distracted by the Trump playbook, which includes demonizing the “fire department” media when it identifies the arsonists?
Even if Trump loses next year, the remaining Republicans will goosestep in union to make it a one-term presidency, all the while claiming it is their critics who hate America.
Will the next election cleanse Fox News, or Breitbart? Or merely delay the pace of our destruction?
2
The biggest problem is Americans. We see tax breaks as an unmitigated good. It puts more money into our pockets. What we don't realize is that tax breaks take money away from programs that are valuable to all of us. What replaces those "free" programs is this: user fees, shut down of the programs, crumbling infrastructures, a lack of basic research capabilities, and bad health. I'd rather pay my taxes and see the rest of America paying taxes than have more money and a less healthy country to live in.
7
The contributors whose needs determine the policies in practice (as opposed to in rhetoric) of the Republican Party are like pre-modern/early modern nobles in a monarchy. They see the purpose of government as being to hand out goodies to them. And no surprise in the case of the nobles, because their class was derived from the warbands of military leaders who seized power in various areas by violence, and who expected to be rewarded with land and loot by the warleader. The contributors are like the old nobles in another way: in order to feel comfortable with the extremely uneven distribution of wealth, they need to despise ordinary people, so that they don't feel any need to do anything for them, and even can convince themselves that it's good to do things to them. This goes with the deliberate cruelty that Dr. Krugman has pointed out repeatedly.
3
The idea that the GOP wants to do anything that threatens their plutocratic agenda can be laid at McConnell's door. The Freedom Caucus during the Obama years would rather shut down the gov't than allow the gov't any leeway to fix the troubles in the economy which in 2011 were myriad. Now with the preposterous outcome of the 2016 election, which would make John C. Calhoun proud, Trump has been foolishly given vast powers which he has tried to utilize to the benefit of his trade wars. Opportunity zones are exit A of the GOP leadership's commitment to promoting a plutocratic revolution in the country,
5
Everything you say is right, but what about the Democrats? The number of Democratic voters is much larger than the number of Republican voters. Are the Republicans more successful just because of gerrymandering?
2
Yes, but Gerrymandering is only a small part of the voter suppression efforts by the Republican Party across the country. Others would include voter roll purges, elimination of polling places, Election Day is not a holiday and is not on the weekend, voter ID laws, no automatic voter registration, made up voter fraud panels and on and on. Oh and don’t forget Moscow Mitch’s views on Russian election interference.
Sorry, not sure how you miss all these but please pay attention- this matters.
5
as a manger , an economist, onetime said to me 'we can do , say, and lie to ourselves all we want but, in the end economics will prevail' (we priced products and managed risk). we do not invest in infrastructure, continue to have and encourage more extreme distribution of wealth issues, health coverage problems etc. economics will prevail. people with a disproportionate of wealth and power will be subjected to the masses tirades , healthcare will not go away, people will not buy goods. 'we can lie all we want but economics will prevail'.
1
This limitless greed coupled with the undemocratic aspects of our electoral and governing systems spells the end of this country as it has been presented to the world. We are approaching a time when no meaningful legislation will pass because of the Senate, and the Senate majority causing the blockade will only represent 30% of the American people. In other words, the United States' time as a democracy, or even a functioning republic, is coming to an end.
4
Many, if not most, bills are drafted by lobbyists on behalf
on their clients in both the federal and state legislatures.
5
Don't forget the poor, but we in the middle class in blue states -- some of us are suffering. That extra 5 or 6k in federal taxes could be used on home improvement or vacations, which would boost the economy. Or we could simply save more for retirement, especially those of us who lost so much in the Great Recession.
3
As always, the problem is the money in politics. We need mandatory public campaign financing so our elected leaders will once again represent the public and not the money.
4
@Occupy Government
Completely right. It is the most logical and quickest path to address the core corruption.
After that the restriction of lobbying
"The point, again, is that you shouldn’t think of the opportunity-zone fiasco as an isolated mistake. "
Mr. Krugman, you have made a mistake of your own in calling the opportunity-zone fiasco a mistake. It is neither isolated nor a mistake. I'm not going to claim that that particular piece of legislation was specifically designed to do what it did, but the probability is high. After all, the entire "tax reform" package was designed to benefit the wealthy. Too many of its provisions do exactly that to be anything but planning for that result. If there is a mistake in the legislation, it's the bits that actually benefited the rest of the country.
2
Same old tired story:
- Democrats leave office, leaving behind a reduced deficit and a stable, growing economy. Republicans then get into power.
- Despite record growth in wealth for the top 1% and despite record corporate profits, Republicans claim that the wealthy and corporations need more tax cuts, and associated other tax loopholes/goodies.
- They cut taxes, and blow a hole in the budget deficit. Republicans begin their call to cut social security, medicare, and medicaid.
- Asset bubbles form and then pop, which of course no republican sees coming, the economy slows/recedes, exploding the budget deficit even further.
- Democrats regain office to clean up the mess, and over the next 2-4 years of attempting to clean up said mess, Republicans cry and whine that Democrats are not cleaning up the mess fast enough.
- Republicans retake office.
17
The faith that Republicans have in "trickle-down" economics is astounding, after looking at all the evidence which proves that it simply does not work
15
thank you Prof. Krugman for calling Republican's "tax reform" what it is—another theft of wealth from workers and the middle class deposited directly into the accounts of corporations, the .01 percent, and Republican campaign coffers.
The Republican Party, as an institution, is a danger to the rule of law and the integrity of our democracy.
The problem is not just Donald Trump; it’s the Republican party that has chosen to collaborate with him.
13
Did some say RICO?
3
Their party name is now the Corrupt-Lican Party.
2
I've got an honest question about funding infrastructure projects - one of the objections to for-profit infrastructure models is that private companies would be extracting profits from infrastructure that used to be public (free), potentially creating a regressive system that prevents struggling people from getting to work or whatever. I buy that to a degree, but I think the benefits of toll-based infrastructure, either public or private, outweigh the costs. Is that not the most progressive/environmental view?
We need to put a price on the massively polluting aspects of our lifestyles to encourage people to drive less if its not necessary. I would argue that one the worst things ever to happen environmentally speaking is the creation of a free system to drive everywhere, leading to the car-dependent modern American lifestyle.
2
@peter n You might have a point if there was a concurrent effort to upgrade and expand public transportation, so that those "discouraged" from driving had other ways of getting to their jobs. There isn't.
6
Free? You’ve willfully ignored tolls, registration fees, gasoline and tire taxes, parking taxes (in NYC it more than double the sales tax rate), fees added to auto rentals and exorbitant insurance rates.
5
I don't want your readers to miss the Times article by Drucker and Lipton that your link in your column. It is a long read but worth it because it exposes how Opportunity Zones can become become a major effluent feed for the swamp.
https://www.nytimes.com/2019/08/31/business/tax-opportunity-zones.html?
On these projects the Congress must provide oversight and keep track of the money and costs. Some of the projects and beneficiaries may be worthwhile. I can see a time coming when our major enterprise creating centers will require major additions for housing and transportation. I think about logistics and how we can move in the foods and other goods into these areas of increasingly greater population density.
I also understand, sometimes, when fast returns investments are in abundance, it is difficult for longer payout investments to attract capital and maybe the only way is to add the tax incentives for a project, no matter how worthy, to compete.
2
Like the Bush tax cuts before them, these were supposed to pay for themselves. They never have. They never do. They never will. Nor does this money ever "trickle down" to anyone lower down than a wealthy taxpayer's tax preparer.
Even the Obama stimulus legislation had to be cut to the bone. About one-third consisted of tax cuts which - repeat after me - would pay for themselves.
Some of this found money is "invested" into political campaigns. Beneficiaries will be expected to provide an ROE is the form of more tax cuts.
And how do you fix this mess? Even if Dems capture both houses of Congress they will be too timid to do something that GOPers will claim amounts to increasing taxes. Holding onto their seats will be more important than fixing our crumbling roads and bridges.
We are near or at the end of the economic cycle. Government spending will be important. Where will that money come from?
10
100 years ago I was a Rotten Republican, so I know and have been telling people for many ears:
"The ONLY thing Republicans care about are TAX CUTS for their $$$Rich Campaign contributors. = Legalized bribery: You fund my campaign and when I win I will give you back a big fat $$$tax cut!".
REPUBLICANS = SLIME!
Republicans do NOT care about the poor and middle class!
13
@Michael They don't even care about the wealthy, they care about the .0001% obscenely wealthy.
2
You seem to have a typo. You wrote: "the modern G.O.P. pretends to share traditionally liberal goals".
Instead of
"the modern G.O.P. pretends to share traditionally AMERICAN goals"
10
We are now a society defined by greed. And a tribal selfishness. And institutionalized, SCOTUS-condoned corruption. We all know it and can do little or nothing about it as the wealthy and powerful roll over us and gleefully plunder the Treasury and write the laws to increase their power to steal ever more and rape the land, water and air. No wonder we got a Faux-blonde King of Corruption. We ARE, at every level (possibly excepting the local), a corrupt, spiritually bankrupt culture of greed and violence that celebrates unabashed liars and corrupt grifters as heroic saviors. The degree of irony in MAGA is impossible to overstate.
The descent can be traced to many individual acts by "leaders", but for my money we owe it to first Rush Limbaugh, who made it possible to hate in public and demonize government and fully half the population, and then to that most fake of leaders, Ronald Reagan, who genially embodied and mainstreamed the ethos of greed and duplicity in pursuit of power. Short of revolution, which is practically inconceivable, there is probably little hope that we can recover. Now we navigate the evil like wanderers in Dante's Hell.
354
Much of what you have expressed is true, but your outlook is different from my own. I continue to believe in the American Dream, and, like Jefferson, I’ll keep my faith in the American people (once they wake-up intellectually).
17
It will take more than one generation for them to wake up, if ever.
In the mean time, some other country, with resources and will power, may
take the Leadership role.
22
@TS
TS, the exact definition of all those awful things which you described above in your first paragraph is — EMPIRE — and the one that has us all by the shorts is the world’s first and last truly Disguised Global Crony Capitalist EMPIRE.
Same as all the old ones, but this one is the fabulous “New and Improved 21st Century Model”
9
Everything Krugman says in this column is true. Yet, the vast majority of Republicans, in all the economic zones, approve of Trump. Why is that? And more importantly, how can those people be made to see the situation clearly? I'd like to read some solutions as a counterpoint to all the analysis of the reality. Color me frustrated.
11
"Screw you. I got mine." is the motto of the GOP. Good government involves helping people and none of the greedy bloated bigoted Evangelicals that make up the base of the GOP have any interest in helping their fellow man. In fact, the crueler the policy the better. All you had yo do was go to the comments section of Fox News and other right wing sites and see the ecstatic joy that Republicans were expressing over the (now rescinded) policy that was going to force immigrants getting life saving treatments to leave the country.
The problem isn't Trump. The problem is the people who support them. Clinton was right. They are deplorable.
18
This is not a new phenomenon. Since the 1970s the GOP has been the party of the rich, although under Trump it has become more brazen about it. But why not? -- it continues to work, abetted in large part by cable news which allows GOP shills to spin their their destructive policies as beneficial (the epitome of chutzpah) with propaganda more sophisticated than anything the USSR ever produced.
8
"The point, again, is that you shouldn’t think of the opportunity-zone fiasco as an isolated mistake." It's a feature, not a bug.
165
@RobtPost
when nobody was arrested on wall street for the 2008 financial crimes it was clear it was not a 'mistake' but a 'feature'.
10
@RobtPost This was mainly an undocumented feature. Works for software (we can always push an update later) but not for democracy.
1
@RobtPost As always, the cruelty is the point.
2
Trump, his family and his cronies see the entire country as an "opportunity zone" to be fleeced. The rest of us sheep are the fleecees.
14
Here is an idea Republicans should embrace: let's slash the military budget and instead give generous tax breaks to investors who finance the development of the next F-whatever fighter, the upgrade of our nuclear arsenal, and the future Space Force. Let's see who bites.
8
The GOP seems fine with spending public money to further enrich the wealthy.
5
As children, today's wealthiest "Americans" surely scolded their Nanies for their attempts to read stories such as Robin Hood and Cinderella, or books like Aesop's Fables and the Berenstain Bears. Shortly, their "parent's" promptly fired these Nanies for trying to corrupt their lovely children and would then soothe their offspring with a rousing game of Monoply-winner's version.
3
Public policy by selective taxation is a bad idea at best, and a targeted giveaway at worst, be it opportunity zones, alternative energy or any other pork pot.
3
Where's the Democratic house rescinding those tax breaks? Are they all in on this fleecing of America? Even if the senate would reject it, Amendment 25 is ripe for its promotion and would bring to light all, if not most, of this administration's malfeasance. The Federal Election Commission is left without a quorum, I've written to both Schumer and Gillibrand about this issue, why have I heard only crickets?
Who is running this very expensive show?
3
I remain puzzled how any discussion of Trump's tax cut can ignore the ballooning federal debt. The budget shortfall next year is expected to top $1 trillion!!
Mr. Krugman or readers, do you think you can convince me that is not going to be a dire problem for our children and grandchildren?
2
@Sam McFarland; Grandchildren? The human race will be extinct by the time anyone born today reaches the age of 50 due to climate change. Financial considerations will be irrelevant.
4
@Sam McFarland
I agree. And fully expect the Republicans to make desperate pleads to cut SS, Medicare Medicaid, and other social programs. God forbid cutting defense.
republican voters have been steadily brain washed since Reagan to believe government is always the problem. the politicians they elect are intent on proving this point over and over.
5
Why is anyone surprised that a billionaire president is only interested in helping the rich?
7
@Betty We have no proof, or even evidence, that he's a billionaire.
3
Just another Republican scam to take from the poor and give to the rich. If anyone cannot see through the self-serving and stealthy Republican political agenda of the last 40+ years, your attention has been on surface, not substantive, reality.
5
The top goal of the GOP is to return the US Treasury money to those who paid the most taxes. Of course, those are the ablest to pay as the 1913 Tax Act mandated.
I have to cut this short because I'm heading to the tea party at the country club.
2
Prof. Krugman presents a factual analysis of the faulty mechanism that tax breaks are when they purportedly are employees for a public purpose. He should go further and document how all the legislatively credited mechanisms to steer investment to struggling neighborhoods and place have failed except for making lavish tax breaks a boon to corporations, financial institutions and high net income persons desiring shelters from taxes. The New Market tax credit was a
prior failed effort to engender decent paying jobs in low income communities. How about The NY Times taking on a serious statistical analysis of the costs of tax credit schemes and their paucity of community benefit.
4
@Mary H, You should have read the long article Paul refers to in his article. It was chock ful of the info you claim to want to read.
2
@karen I sought to draw in other tax credit legislation that predated the 2017 give away.
It's been going on for a while. When you as a politician give tax cuts to wealthy people, they give you campaign donations. If you don't get their tax cuts through, they threaten to withhold the campaign dollars.
So the donations become a bribe in everything but its name. Recalling the adage from many years ago, "It's not exactly a bribe, but the campaign donation is also not exactly not a bribe."
7
@cjg Oh it's a bribe alright.
My taxes went up. Those four words let to being yelled at thrice: once in person and twice online. (It usually ends up with the person yelling “SOCIALISM!”) I was told that it wasn’t true, that I was doing it wrong, that I was one of a handful of people, and finally that if I didn’t have to write a check to the IRS (I had enough withheld), it simply didn’t count. The reason was that my deductions, consisting mostly of high out of pocket medical, far outstripped the std deduction. The removal of the personal exemption meant that my taxes went up. It’s not hard for out of pocket medical to exceed std deduction, so taxes increased for anyone with sky high medical costs. Intentional? I doubt it. Careless? Absolutely. Ghoulish? Yup.
6
Tax cuts, a smaller public sector, less public protection and more public spending going to private business interests. Isn't it obvious that the public is being ripped off by Republicans.
7
If Dems take Congress and the White House perhaps we can leave some of the tax cuts that are actually helpful and then do stuff like:
Tax high income meaningfully. (Imagine that!)
Tax high speed stock transactions. (Bernie’s idea)
Tax corporate stock buybacks.
Tax public offering windfalls above a certain very high threshold.
Tax “churches” that are political interests in disguise.
Disallow tax deductions for donations to “charitable” foundations that are lobby interests in disguise.
Make capital gains taxes progressive.
Tax corporations that move their headquarters abroad to avoid taxes.
There are ways to raise money to build infrastructure and pay down some costly federal debt while still leaving incentives for innovation in place and protecting small businesses. It’s there. We just need an actual representative government that actually works on behalf of the actual working (and middle) class populace to go get it.
3
Dr Krugman, A book that explains the implications of the 2017 tax bill to the average american with charts and graphs that were easily understandable would be really helpful. Maybe you or your students could do this soon? Is that possible? Maybe even an e-book. Thanks for considering this suggestion.
6
We hear a lot about Trump's desire to fulfill his campaign promise to "build the wall" even if it's US taxpayers who pay for it instead of Mexico, as Trump repeatedly promised.
But what about Trump's other campaign promises? He promised an improved health care system--much better care at lower costs. Where is it?
He promised infrastructure projects, as Prof. Krugman points out, but has produced none. Is he waiting for another major bridge collapse? Perhaps he thinks only Democrats use bridges?
The obvious difference is that "the wall" stokes paranoid fear among watchers of Fox "News." Failing infrastructure, not so much. And Trump rarely talks about health care.
Could it be that Trump didn't really mean to spend on infrastructure and health care? That those were just empty words? I think by now the answer is clear: It was all a con.
362
It is my firm belief that they intended to repeal Obamacare and replace it with nothing. That was their entire plan for health care.
64
@Tom W
His base: I wish those Democrats would just give him a chance and let him do his job!
13
@Tom W, I see highway, possibly bridge,maintenance federal financing being approved in our red states area and actual maintenance happening. Be careful what you wish for and be happy he hasn't gotten around to infrastructure improvement-as-privatization yet. Fees for toll roads and water bills will be jacked up for those who complain now about having less money than they used to have.
7
Let's face it! The entire 2017 tax cut was a total scam. In fact, as Trump would have it, it was a tax cut with a vengeance where the rich--individual and corporations got richer, often on the backs of the middle class in blue states where the SALT deduction (for State And Local Taxes) was capped at $10,000. I know how this hurt as my wife and I faced $24,000 in local real estate taxes on a middle income home in New York. As retirees on a fixed income we were forced to sell and move out of state where we only pay $8,000 for a condo in an urban park near the center of a major city. So, now we know that the tax scam contained other scams for (surprise) real estate developers. And just what's been the penalty for this self-dealing? As you often call it Paul, it's a kleptocratic kakistocracy [aka "the swamp"].
379
@Paul Wortman
The 2017 tax cuts weren't a total scam. It's sad that so many actually believe this. Perhaps they should get their information from sources other than the NYT.
3
@Paul Wortman
I want to agree with your highlighting of the State and Local Tax deduction being capped at $10,000. It seems to be inconsistent with the advertised objectives of the Tax Cut and Jobs Act. Senator Schumer, the Senate Democratic Leader made a point of how this would hurt the municipalities and school systems who depend on property taxes for important services. SALT Cap is certainly inconsistent with the jobs creation objectives of the Tax Bill.
23
@AACNY You are exactly correct! Many supporters of that person currently in the Oval Office did, indeed, reap monetary benefits from those tax cuts. So - yeah. For those people - they were tax cuts. I defy you to find more than one person with an income under $50,000 a year who sincerely feels they've benefitted to any real impact from those cuts (let's stimulate besides those who can no longer afford rent, the mortgage or health insurance).
30
Enterprise zones and development tax breaks are well established bipartisan tax policy since Reagan introduced them. As usual Trump simply took them to an extreme.
3
The privileged in this country used to live by the idea that "to whom much is given, much is expected." Today, their motto seems to be "I got mine and don't touch my stuff."
I was at the Baseball Hall of Fame last week. I was reminded how baseball's biggest stars enlisted and fought in World
War II. For example, Ted Williams risked his life over and over by flying 100 missions over four years (many of them in the same plane as John Glenn, by the way).
The Kennedys, Bushes and others of our wealthiest citizens fought for our country in that war. Can you imagine today's young tech moguls doing anything remotely similar?
Heck, today's rich don't even want to pay their fair share of taxes to the nation whose institutional stability and governmental and legal systems enabled their ability to become so rich in the first place.
This issue is about pure selfishness and greed.
533
Williams and Glenn flew the single seat strike fighters called f9f Panther. They were not in the same aircraft together but were flying side by side (wingman). Small point I know but nevertheless....
13
@Jack Sonville
Great observation! Bone spurs, other priorities and Air National Guard safe spaces seem to have become the "patriotic" response for the flag-hugging class. My father always described our family as "upper middle class," a distinction that seemed important to him. When I was drafted for Vietnam, my parents were proud that we were doing our part as expected of our socioeconomic status. (The best I could do was be proud to have made them proud. But I certainly went!)
27
@Ben
Thanks for that clarification, Ben. Great point.
6
In the last 50 years there has been a steady erosion of vertically integrated distribution of benefits by federal and state governments. There was a time when public education was subsidized by federal and state aid, but in the name of "cost cutting" these centralized sources of funding have been steadily reduced, leaving the smaller entities, town and county administrations, to pay for the increasing costs of education and infrastructure maintenance. Poverty, in this context, begets more poverty.
As "Big Government" is derided and dismantled in the cause of "Tax Cuts", we, the homeowners, families and working men and women of America are being bled dry by the concomitant increases in the costs of local and state taxes, which are not mitigated by the benefits of deficit spending that the Federal Government enjoys. While our elected leadership passes the buck, it's we who end up paying the Tab.
428
Why aren't we more angry? Why aren't we rioting in the streets?
57
@Reed Erskine - Actually, education in this country was traditionally a local expense, hence the school taxes that most of us pay to a segment of our local government. The problem is that as education became more and more expensive with mounting costs for such things as books, buildings, payrolls, and programs stretching for language teaching to special education, more and more municipalities were unable to keep up with the richer towns around them. Demands started to mount for more funding from the states and to some extent from the feds to try to equalize a situation in which a poor town might be able to spend a fraction of richer towns. Even in 2018 with aid coming from the state and the federal government, spending in Pennsylvania school districts ranged from $6,324 to $17,409 per student.
14
@Stephanie Wood
I think the same thing myself. Why aren't we out in the streets protesting. Nothing the current administration has done has benefited the middle class or the poor - nothing. And what are the achievements - a tax cut for people who don't need it benefitting Trump and his cronies bigly. Nothing on infastructure, no improvements on health care, no sensible gun control.
Why are we standing for this? What will it take to go out in the streets and say enough is enough. I fear we have We become spoiled, lazy and complacent and are sitting back watching our country being destroyed from within.
39
The Republican philosophy: Spend government money on fixing actual problems? Pshaw! That will add to the national debt!
Tax breaks for the ultra rich? Perfect!
7
The thing about infrastructure programs is that either way there is a loss for government. Either taxes lost because of tax breaks or money spent from government coffers. And the money is going to go to private business because the jobs get put out for bid and private companies do them.
It is simply this pathological aversion to the word tax that the wealthy and foolish, poor Republicans have.
1
@JKile
One wonderful thing, though, about infrastructure spending is that it actually creates jobs, utterly unlike the 2017 tax cut for the rich. Another is that it creates better roads and bridges that don't collapse.
3
Trump's lack of any kind of understanding of how systems work, let alone an incurious, distracted mind unable to attend to details--allows lobbyists, grifters and attractive ("straight out of central casting") opportunists to run wild.
Every single policy this administration has attempted to put in place fails to stand up to rational analysis, gets walked back by knuckleheads like Larry Kudlow , who claim to understand what Trump really meant. then Trump himself doesn't understand what his own spokesmen are saying, and proceeds to tweet confusing, contradictory claims and arguments.
The country cannot be run this way--and that,regardless of your ideas about the role of stimulus, tax -cuts or tariffs. This the only issue voters must decide on.
Democrats need only recite the chronology of what the administration has done with each whiplash, contradictory and crisis self-creation.
They are fables: one for immigration, one for healthcare, one for the G-7, NATO, North Korea, and one for mass-shootings. The close is that voters must turn their backs on Trump and the GOP, in order for anything resembling a competent government I put in place.
6
Krugman shoots an arrow into the apparently iron-clad shield of the GOP as they continue with their leader Trump to allow the wealthy to flourish even more. The hypocrisy and willingness of the "selective tax breaks" and zones for opportunities for Jared et al is sickening. All done while the rest of us watch while infrastructure crumbles and ridiculous schemes like the space corps adding to our debt and disbelief. We are sheep. Getting fleeced in Texas not so bad as not so cold here, but aside from the weather. how do sheep react to the shearing?
3
Over the course of my life I have seen the republican way. Impoverished areas close to urban centers are neglected till values drop precipitously then the saviors of finance push and buy out the locals pennies on the dollar. Up zone and make a killing.
This happens normally in the world, but it can also be a goal of investors to make happen for financial gains.
2
What trump and the GOP do best, is distract the voters with "strawman" and circuses, with the benefit of the constant fear-mongering of Fox.
Sadder, is that our electorate really appear uneducated, and easily led.
5
The disingenuous stench of Republicans has progressively gotten worse over the years, starting with Gingrich, the "Tea Party', evangelical zeal, and culminating with the condemned habitat of Trump; a man whose whole life has been honed on cheating, lying, impeding, law breaking, and suing anyone who gets in his way. Under the current scenario, one would expect a tax cut plan as hastily written. Big money was salivating over the opportunity and all they had to do was throw in the "Opportunity Zone" feature to hook Trump, the so called real estate genius that no one will lend money to. Disgusting.
3
A large part of libertarianism is built on the premise that clumsy interventions by government often result in unintended consequences. Paul, you are shameless in standing an argument against progressive intervention on its head! The Republicans took a page out of the Democratic handbook and you jumped on its ineffectiveness! Keep up the good work!
I disagree with Krugman on Cryptocurrency (curious that a Novel winner still doesn't 'get' it), but I certainly agree with him here. Why are we surprised that GOP policy is intellectually dishonest and Trumpism incoherent?
1
All bills are drafted by lobbyists on behalf of their clients. That’s how it works. I am surprised that the writer does not understand this basic principle of how laws are created. There are a number of other gaffs in the article -to many to illuminate.
Again, I'll share a large political message Grafitti-ed on the side of a building to be seen from the BQE:
CONservative
GovernMENt
4
part of the death of the model cities program from years ago was how anti poverty initiatives were turning into fancy golf courses. To the gop it has been ....been there done that...and they are doing it again.
Ralph Nader stated that Trump is a Corporate Socialist. He is. And we should all state it all the time.
3
With apologies to K. Marx:
"Tax cuts are the opiate of the masses."
1
Call a skunk a purring, friendly household cat and many people will not look beyond the words or even notice the smell. This is our swamp today.
1
"one of our two major political parties has basically turned its back on the very idea of productive public spending."
Well, they're businesspeople, through and through, Chamber of Commerce types. They don't want government programs doing what they see as better done by private citizens, except for the military, of course.
(I must be feeling magnanimous after my morning nap: I dislike businesspeople, especially hardcore ones, like Trump.)
Dr. K insists they're wrong in this case, but intelligent NYTimes commenters here insist that he's wrong. Do I need to be a macroeconomist to adjudge the superior argument?
I mean, I've got my pitchfork and Wiki torch ready, but I don't want to waste it. So best do nothing, just nod wisely?
The Infrastructure bank is an idea whose time has come. Without old-fashioned pork barrel gimmes, basic infrastructure needs federal guarantees for fix water issues, transportation and grid upgrades.
A bank dedicated to funding these projects would add some fiscal policy where McConnell and Republicans are stymied to do anything but block.
2
Seriously, who puts on a red hat, goes to a rally and deeply feels that this administration has accomplished anything of substance on their behalf?
14
@Steve
I suspect nearly all. They have, after all, drunk the Trump Kool Aid.
The tax cuts are nothing but vote buying schemes. Some day the horrendous national debt will have to be payed for.
7
Not necessary to pay it back. Just follow our President’s tried and tested strategy: Declare Bankruptcy and then pay dime for every $. It worked for him. That’s how he became a billionaire!
Corporations get to deduct state and local taxes from their federal tax bill with no cap, while under the 2017 tax law, individuals are capped at $10,000. That's the real fraud.
Perhaps those of us in blue states should register as LLCs, and deduct the full amounts?
18
@Joe Arena If corporations are people, per citizens united, they should be capped at 10K as regular people are on SALT.
10
Excellent observation! This might be a way to get Citizens United decision overturned, or collect a lot of tax from corporations.
Tax gimmicks for rich folks have been around for decades and coincidentally or not America’s decline and that of the middle class have followed an almost parallel path to the increasing reluctance to pay taxes by the only ones making any money. What’s it going to take, a starving populace as in Germanys post WWI, the rise of the radical right and the horrors that followed before there is any attempt to correct this race to the bottom for all but the 1%. There’s ample evidence of just that happening all over Europe and I would bet the mass shooting in America have more than a little to do with inequality and ignoring those in need of help.
13
It can’t happen here. We are America. We are different from all other cultures!
It eludes me how trickle up ideas like that of democratic candidate Andrew Yang, where he proposed to give $1,000 per month to individuals, claiming that they will then spend on the local economy, perhaps start businesses or be more productive thereby producing more wealth for their employers or creating new jobs, are dismissed with a laugh and a scoff, even by voters who would be receiving this benefit, but trickle down ideas are always lauded as wise and prudent. Seems to me directing money at the source is a more targeted approach. However many people think that recipients will waste it or simply somehow live on it and stop working altogether. For some reason people think corporations will spend more wisely and are better stewards when their excessive wastefulness has been show time and again.
14
@Costanzawallet
"For some reason people think corporations will spend more wisely and are better stewards.."
evidence for the past 40 YEARS indicates otherwise.
this is all an excuse to rob from the middle class and poor and give to the wealthy. As if they need another yacht
2
@Costanzawallet yes, but doesn't Andrew Yang plan to use a VAT to fund his basic income idea? If so, many of us could end up paying more in taxes with $12k to show for our troubles. Ultimately, our dysfunctional government will have to raise taxes to fund this because you know they will mismanage and divert funds until a new funding bill needs to be passed at 12:01 AM on the day our treasury runs out of funds. Sound familiar?
In tax year 2017, that so-called tax cut cost me about $2500 by forcing me to use the standard deduction instead of itemizing deductions, including interest on a 200k mortgage. Meanwhile, someone I know who manages a trust fund says that its three beneficiaries gained about 10k each because of the tax cuts.
Now that's a tax break for you!
22
It starts with the wrong assumption that things like the opportunity-zone fiasco are a "mistake". These are things deliberately written into the law by the lobbyists, for the sole reason of their clientele benefiting from it. These things happen on purpose.
29
Yes, thank you for saying this! I am astounded over and over that Republicans claim they want to simplify the tax system (which is indeed a good goal) while simultaneously legislating via the tax code. You can't do both!
In addition to the many reasons that this has been shown to be ineffective and harmful -- the tax code gets more complex, loopholes multiply, developers build luxury condos and tollways instead of affordable housing and roads -- it further embeds the pernicious conservative idea that paying taxes is the absolutely worst thing that one can do, and that it is to be avoided at all cost.
24
Trump Tax cut was supposed to help the struggling urban workers -- it ends up providing new ways to dodge tax for the riches.
Democratic Party is supposed to be on the side of the struggling urban workers -- what have they done for the workers?
I don't see much difference here.
The most effective way to help the workers is Universal Basic Income, like the $1000/month to all citizens proposal by Andrew Yang. No if or but.
All Democratic presidential hopefuls address the issue of income inequality as one of the biggest problem the nation is facing. Only Yang's UBI proposal makes sense and will bring some much needed fundamental change to the establishment, politically and economically.
1
@Sometimes it rains: While I applaud the sentiment, I want to add that the UBI solution will also have to include something to hold down the price of housing, hopefully by increasing the supply. Otherwise landlords will capture most of that money. The Kushners and Blackrock stand to make billions if money pours into the bottom tiers of society but the supply of affordable housing does not increase.
6
@Sometimes it rains
Yang’s proposal is hardly the “only one that makes sense.” It’s a relatively untested idea that might seem simple but maybe is not once you try to fully examine the impacts in a highly diversified economy, marketplace and labor pool such as ours.
Our entire tax system could be revised to fund much needed infrastructure projects that provide good wage jobs, which in turn cycle that spending back into the rest of the economy. I’d rather see my hard earned tax dollars go that much more productive route.
On a side note, I do like Andrew Yang. He’s a brilliant guy who thankfully avoids the usual histrionics and loquacious babble of political debate. He needs a full platform, though, beyond his one note samba of universal income.
1
Good lord. How do they sleep at night? I'm beginning to think very very soundly. Trump et al., are just a huge rip off opportunity for the wealthy that actually happened by accident.
Those that benefit are just making the most of it for as long as it lasts.
16
@Harley Leiber
it is a major reason why GREED is considered a cardinal sin- and I'm not even Cathloic
it should come back to bite them..and it will
1
Republicans are against government infrastructure projects paid with tax revenue. They think these projects are inefficient.
One problem with this theory: it’s just untrue.
No, actually, government funding from tax revenue allows municipalities, counties, and states to build infrastructure by hiring the best private design engineering and construction companies at the lowest responsible cost.
If you don’t have civil servants overseeing these projects on behalf of their ratepayers, then you will sacrifice standards. Few “privatized public infrastructure projects” have ever worked in this country. That approach works in China, because the capitalists there obey the government out of fear.
Capitalists in the USA do not fear the US government. They just complain about taxes.
Thank you, civil servants of America. Your works will be renewed soon when we regain our senses.
16
and the other "elephant in the room" .....the huge waste, expense and corporate give aways in the military budget. George McGovern was the last presidential candidate to even suggest serious cuts to the military budget and was punished for it. What are we protecting anyway when schools, infrastructure. her;th care, housing etc etc is out of reach of so many?
25
The tax cut succeeded in its main purpose: To make the wealthy wealthier so that they would contribute more generously to Republican candidates who could then work harder to make their sponsors even wealthier. Unbridled capitalism seems to be their mantra.
37
And yet, that’s not really capitalism—it’s unbridled oligarchy.
3
Here is an example of the effects of the tax rates for a family of four making $53,000 a year.
The federal tax savings for a family of 4 making $53,000 per year from the 2018 tax plan was $686. I'm sure the current tariffs will offset that savings. Also, an employee making $53,000 a year would pay about $4,000 a year in payroll taxes.
The average health insurance policy on the open market would cost a family of 4 about $28,000. Thru an employer it would cost a family of 4 about $6,000. Average out of pocket health care costs would be about $4,700. Health insurance costs are increasing about 5% a year. This is the biggest expense a family of 4 would have to deal with. It's not income taxes.
I'm sure investors and real estate developers received most of the benefits.
27
@BruceThe debate over whether or not we need single payer should end by simply presenting Americans with the facts yet all but one candidate, Bernie Sanders, refuses to fully endorse single payer, it’s a no brainer.
7
@Ted The problem is most people don't know the facts...including politicians. We need a lot of major changes in this country. I don't see this happening in the near future. I feel like I'm living in a country that is against and destroying the middle class and forcing their religious believes on me as law.
3
@Ted
one step at a time The public option is an excellent FIRST STEP
3
One of the most common lines used by my Republican friends, is the great "socialists" fear of redistributing money---their money. My refrain is to point out that we already have a full fledged redistribution policy---with a capitalists twists: our tax code redistributes all monies to the top. Of course, they fail to see how paying lower taxes than their secretaries sets socialism on its head---
35
So it seems there is little or no "public" interest in the Republican Party.
To be more intellectually consistent, as Mr. Krugman suggests, perhaps the GOP would more accurately be termed the Private Party.
I suspect their own strategists and publicists will not leap to that. But perhaps others will use that label. It seems to fit.
17
The system is so unfair to the "middle class." I just watched my son-in-law struggle with the paperwork to get a tiny amount of financial aid for one of four children whose college loans will amount to an unbelievable amount of debt.
He and my daughter have what you might call good well-paying jobs, but they make just a little above the requirement for substantial financial aid. And nowhere near enough to pay out-of-pocket.
The hard-working parents and diligent kids really deserve a break.
31
@betty durso. All due respect, 4 children in modern times was looking for trouble. Your children should have had two. So for now, I strongly suggest that each of their children (if truly interested in college) needs to start with 2 years at the local JC and work while attending. Then assess the future after a year + summer school.
@karen Yep. Because only rich people's children can go to a really good university.
2
@karen
They had their first child almost 25 years ago when their parents (us) had no trouble paying for their college education. The oldest got a good job right after graduation and will be years paying off debt. Next comes one studying in the medical field and amassing debt even as she works two part-time jobs. Who knew tuition would rise so steeply back then?
Then comes a possible future teacher off to college next year and a possible environmentalist three years later. They have already contributed to a better world through wholehearted volunteerism.
2
Steven Soderbergh declared that the USA are the greatest fiscal paradise of the planet while presenting his film :"The laundromat"
at the Venice Mostra. About the Panama papers.
All the Us corporations are fiscally located abroad and cheat to pay no taxes.
That is Apple, Amazon, Facebook, Yahoo, Google, Starbucks, Netflix, and others. All In Ireland, in the EU, invading the European markets, destroying the European economies and paying no taxes in Europe.
The cash money is repatriated to the USA via the offshore banking
in the Caribbean.
The American theft onto the European budget is equivalent to the annual deficit, 20 %.
13
On one hand liberals insist tax incentives don't work to increase investment. I think Krugman has argued that in these pages a few times.
On the other hand we have liberals decrying all the unfair tax breaks these rich investors will receive (if and only if they actually invest, build and, after 10 years, successfully exit an investment project in these opportunity zones at a profit that otherwise would have been taxed).
So which is it?
The "controversy" here appears to prove the power of investment tax incentives. Could we hone the opportunity zone designation a little bit better? Sure, I'm on board with that. But incenting a real estate housing development in downtown Houston isn't some kind of huge waste of resources. Every luxury unit built frees up a more modest apartment vacancy.
We should maybe take the lesson here and apply it to encourage more housing development in San Francisco, NYC, DC and other high COL real estate markets where normal people are priced out because of stagnant supply.
4
@Mmm
You seem to be saying that "liberals insist tax incentives don't work" and "liberals decrying unfair tax breaks" are inconsistent, which does not make sense to me.
You also state that "every luxury unit it frees up a more modest apartment vacancy," which strikes me as unlikely.
4
Where do you think these projects by Kushner and his ilk are? They’re taking over the last nearly affordable areas of the large expensive cities, developing them, gentrifying them into high priced sales and rentals and booting average people and small businesses out. Even if they do offer a few affordable units it only lasts for a few years and then they either switch them to higher priced leases or if the area somehow becomes ungentrified again they abandon the project letting it slip into a crumbling ruin taking their loan money and tax incentives and running.
2
@Mmm
"Every luxury unit built frees up a more modest apartment vacancy."
Umm, not in my city. Doesn't work that way at all. During Bubble 2.0 post 2011 we've had lots of modest apartments razed to make way for luxury housing, most of which is purchased by investors. The units either sit vacant (flip, flip) or are rented out for $3k per one bedroom apt. The modest apartment units are gone forever.
Want to see an extreme example of this in action, travel to China. Or San Francisco.
2
Republicans believe that productive public spending is giving tax dollars collected from the working and middle classes to the wealthiest of capitalists and corporations.
18
My taxes stayed about the same. However, personal tax rates are only guaranteed for 5 years, while corporate rates have no such limit. Reagan started the same scam. His next step was to try and cut social security and other social programs because of a huge increase in the national debt. One trillion a year and counting with this president. I await with bated breath the next step for this administration. How much is the space corps costing? How soon will our planet die? We all make choices and then have to live or die with the consequences.
18
The next chapter will be in the Republican's calling for massive cuts in medicare, social security, and other programs that benefit people due to the reduction in tax revenues. Wash, rinse, and repeat. We have seen this act too many times.
56
Opportunity zones crack me up. In my city, the "Opportunity Zones" are smack dab in the path of development and have plenty of developable sites, without a lot of population, or very small neighborhoods of low income residents. In other words, the investors are getting a nice tax break for doing something they would have done without a tax break- start building up in the next big area for growth.
32
Undoing all the damage that Trump and the GOP have been inflicting on this country's 99% demands for a radical government to follow suit. Koch Brothers, Mercer Pere et Fille types should be not allowed to do what they have been doing: destroying the last vestiges of our democracy (not a great one to begin with) by financing what for all practical purposes is fascism.
Who can deliver? Two names Sanders and Warren (in whatever order). Will Professor Krugman see the light (there was a wonderful episode in Oliver Sacks' "Musicophilia" where a man gets struck by lightening and all of a sudden becomes a superb musician)? I sure hope so.
22
@Blunt, yes but people keep voting for the R's I just don't understand.
Michaelf is wrong . Corporate tax cuts do not spur growth in and of themselves . Nor do they raise wages . Wage increases are nearly the same as inflation , meaning no real wage gains . Go back to your first sentence on supply and demand . No one hires because they got a large tax cut . They hire because of increased demand for what they are selling . They raise wages only if they have to by law or competition for the workers they need .
30
My retirement income is quite ordinary and my tax bill increased after the Trump tax "cut". Based on my sample of one, the intent of the so-called cut was to shift more of the tax load away from the wealthy and onto the average earners. The Republicans never, ever propose any legislation that would benefit the average American. It is somewhat surprising that American voters have failed to pick up on the actual workings of the Republican Party. The actions of the Republicans make it obvious that their basic mission is to protect the wealthy Americans.
68
@Clark Landrum
Same here! I'm a retired school teacher and my husband worked in an auto repair shop prior to retiring in Jan. We are pretty typical middle class. We paid a higher percentage of our income in federal income taxes.
23
@Clark Landrum - The "average" voter is easily scammed by being told it is a "tax cut" - words that too many have grown to reflexively applaud. Tax law and policy is math, and complex - for the very reason that "average" people can't and don't want to try to understand it. They can't generally understand the connections and just fill in numbers, and if told they are better off, many believe it. Orwell would be proud. The GOP are hucksters - even McConnell can't keep a straight face most the time when considering this.
11
@Clark Landrum The R leadership and Fox have effectively distracted their base using the God, Guns, and Gays (now throw in Immigrant Invasion) strategy. Much easier to sell fear than to sell (actual) tax reform to those who shun linear logic and math.
6
Paul,
Putting the kindest spin on what Trump did with his opportunity zones is that this policy is an abstract work of art vs. a realistic work of art. Most people who don't understand abstract art, believe abstract art has no rules - they are wrong. You can pick out the difference between Pollack or Miro because they have a distinguishing look or style that follow certain rules. Sometimes the rules impose themselves only after the artist starts the work. I think that's what happened with Trump's opportunity zones.
He wanted to do these opportunity zones to gain poor black urban votes. Lord knows he needs help with this group. But in his shoot-from -the -hip-make, it-up-as-I-go-along style, rules imposed themselves and the end product helped the wealthy more than the poor.
Many (most), are thinking: '(word I can't use in NYT comment), from the beginning it was a scam to help the very wealthy!'. Actually, you're probably right.
15
When a party has as its mantras “Government is best that governs least” and “Government is the problem” it creates a perverse incentive to govern corruptly or at least incompetently. The fact that so many people vote against their own essential interests and elect candidates that only care about their wealthy donors shows the fundamental breakdown of our education system.
58
@David Cox I disagree with your statement that people voting against their own interests illustrates "the fundamental breakdown of our education system."
It illustrates the astonishing power of the GOP's and Russia's propaganda machine.
It's even persuaded many conservatives to assail educators who teach critical thinking, accusing them of "liberal bias" and trying to hound them out of every public school and every college and university.
44
It illustrates a lack of being taught to read, see through advertising, go to multiple different sources for information and research the information. We really need a solid curriculum course on how to research and use the internet and understand and recognize the many untruthful, unreliable, scammy sites and operators on the net. Unfortunately most of the people who fall for these are way past mandatory school age.
2
@MLChadwick
no kidding , I try to tell those folks all wound up about " left and liberals " at colleges and simply explain there are more at colleges because that's where smart people are !!!
3
The voter base of the current Republican Party-Party of Trump (GOPPOT?) is attracted and shaped by certain policy tenets, the Southern strategy. The party's economic tenets are less important to the base, relative to the social ones, and are determined largely by the party's donor class. The result is that public spending is accepted, or even noticed, only to the extent that it can benefit the party's donor class.
20
Not only do you have this kind of obscene gaming of the system by the "Have Too Much", but Republican-Reptilian voters are convinced that their are millions of people gain from "Welfare Fraud" and willing to devote resources (or simply deny benefits) to ensure that people on fixed incomes can't game the system.
The people who live in McMansions, and would be turned away by the doormen (They might be allowed to use the tradesmen's entrance; Someone has to wait the tables) at these exclusive developments.
15
"And in practice the plan would have been more about privatizing public assets than about promoting new investment."
With that sentence, you hit the nail on the head as to why Trump hasn't come up with an infrastructure plan. More worryingly, it speaks volumes about how the 1% view risk and the future of the U.S. economy.
For example, if Trump could have found a way to transfer the assets of the Tennessee Valley Authority to the Kochs, Carl Icahn, Wilbur Ross and other cronies against vague promises of future upgrading and investment - without provoking a public outcry - he would have done it already.
The "investors" are looking for outright asset transfers that provide quick cash flow opportunities by jacking up rates. Privatize the interstate highway system, anyone? Have you seen how much it costs to drive from the north to the south on privatized highways in France or Italy?
That the "investors" eschew long-term "from scratch" infrastructure projects with drawn out paybacks, shows they're not very bullish on America. "America" is just a financial adviser tranche in their global portfolio pie chart.
25
The mental gymnastics over the benefits of trickle down economics generated by the recent tax cut are absurd. Unless you’re a shareholder the cut was gratuitous and unnecessary coming on top of a recovery well under way, (2016 unemployment was 4.6% and declining). The sugar high of the cut has already been exposed as the deficit balloons, US manufacturing is in or close to recession and GDP growth is settling back to 2%. The tax cut has been great for shareholders as corporations have bought back stock and increased dividends. A lot less great for all the rest. And while we’re talking about trickle down economics let’s see how the trade war is trickiing down to the workers.
27
The reason that Republicans can manage this charade is the emptiness of the people. They are voted in because we have not given the people the ways to think about and act on their democracy and their representatives that allow them to make the choices that would negate the capability of those in power to ignore the people and favor the rich.
12
Our government today is reminiscent of the African Lake Nyos in 1986. The lake was still for a long time but slowly became stratified with supersaturated CO2 in its depths until something, probably a small volcanic temblor, prompted the release of the accumulated gas with the death of 1,746 people and 3,500 cattle.
We face a similar fate. The march of income inequality grinds on and, in line with Lord Acton's maxim--power corrupts and absolute power corrupts absolutely--the commonweal is being sacrificed on the altar of personal greed. Either we responsibly depressurize our society à la Cameroon does with Lake Nyos now or a small upheaval will trigger much larger and more damaging adjustments. The First French Republic in 1792 or Hong Kong today serve as historical sentinel warnings.
It is in everyone's interest, rich and poor alike, to reduce the stresses created by this rampant inequality, greed and corruption. Otherwise, the Americans first somewhere and then everywhere will echo the call of their long passed French brethren, "Aux Barricades!".
28
@Douglas McNeill
I used to be a middle school English teacher and I often think of a line from the The Good Earth: "there are ways, when the rich get too rich and the poor get too poor." Those ways are ugly, and I hope we can find better ones.
1
@Douglas McNeill
More likely, the war cry might be "Les aristos, a la guillotine!!"
1
What concerns wealth in America more than anything else? The sense that the masses will go vote. They see their fortunes flashing before their eyes. All those tax cuts disappearing. They tilted the playing field way too much and wealth is starting to think that there might be push back. Medicare for all is gaining in popularity. Americans want gun control. Women have to be let into the boardroom. As much as they hate it, America is becoming less white. And as the storm heads in their direction, the wealthy are starting to figure out that if they don't provide the masses with refuge from that storm, the people will take it.
25
@Walking Man
What refuge?
Trickle down economics are the "We lost a bit on each one, but make it up in volume" of public policy
3
@Casey - Or, "Workers lose a bit on each one, but Capitalists make it up in volume"?
4
Professor, surely you know that the driver of wages is supply and demand for labor absent market-distorting regulations such as minimum wage which has a somewhat limited effect due to the substitution effect of automation etc. Corporate tax cuts spurred growth and gasp, wages are rising now that unemployment is near record lows, that shows a policy working as intended. I am curious though about one thing, after ranting about deficits and the debt for many columns why choose this one to reverse your position and advocate for more spending? Why cite the low costs of borrow and negative real interest rates now? Which is your position, or do deficits only matter depending on whether the issue of the moment calls for spending you like? Finally, we know that tax cuts flow disproportionally to the top 1 percent because they also pay a disproportionate amount of the taxes as they pay more tax than the bottom 90 percent combined and 38 percent of the overall total.
6
@michaelf you're wrong about Krugman. He doesn't rant against debt. Quite the opposite. He does promote strategic use of deficit spending. Slashing taxes and/or increasing spending when it's not needed is bad policy, but not when it is needed.
7
@michaelf Supply and demand is one of the biggest farces economists use to scam citizens about capitalist economics. The supply and demand in various markets is controlled by a few operators who by agreement adjust variables for their own benefit. Many times the government is encouraged protect the largesse available from the markets rather than to control the markets in the interest of all citizens in the nation.
Workers are not objects or slaves subject to being manipulated by people who use and abuse manpower for their own ends. Humans have necessities required for living decent healthy happy lives that are to often ignored by treating them as objects to enhance the economic wellbeing of a few who worship greed for a living. How is it that economic downturns in a nation or in the bailiwick of a rich businessman are often devastating for the workers of a nation or a failing business? Economics is not a science for the simple reason that data and detail of the social roots of commerce are deliberately ignored to give advantage to operators who need an excuse for protecting and accruing their wealth without regard for the rest of humanity. That is a worse case scenario for capitalist economics which has become standard practice in our economy with the help of more than a few politicians who put money over duty to maintain our democracy. It is also the standard taught in business schools around the nation.
4
@michaelf
Just which Paul Krugman have you been reading?
Trickle-Down economics always works. You just expect more than what was promised. A flood of benefits remains at the top, and a few crumbs "Trickle Down". There is no fraud, just a misplaced expectation. What is so surprising is that the reality never seems to Trickle-Down, and the bottom, the "intended beneficiaries" and the "do-gooders" fall for the same story every time.
13
@MICHAEL B Trickle-down NEVER works. Trickle-down supposedly grown the economy enough to pay for the tax cuts. That's the Laffer Curve, and it never happens. Didn't happen for Reagan, didn't happen for Bush II, didn't happen for Trump.
13
@Hank
When has supply side economics not worked?
Reagan reduced tax rates from 70% to 50% in 1983, economic growth was a stunning 7.3% in 1984. The highest growth in the last 65 years.
Reagan reduced tax rates from 50% to 28% in 1986, economic growth was 4.9% and 3.6% in 1987 and 1988.
Reagan tax cuts combined created the highest six year period of growth, 31% since the Kennedy tax cuts in the 1960s (37%).
Roosevelt eliminated the excess proftis tax, reducing taees on corporations from
Congress overrode Truman’s veto and cut taxes in 1948, we had six quarters of highest growth in the history of the U.S. 16.4%, 12.7%,16.3%, 8%, 5.6%, and 7.1%
Calvin Coolidge and Warren Harding reduced income tax rates from 75% to 25%, economic growth in the 1920's was 37% as compared to Obama at 13%.
Kennedy reduced tax rates from 91% to 70%, economic growth was 6.5% and 6.6% in 1965 and 1966.
Clinton reduced capital gains taxes by 29%, economi c growth in 1998 and 1999 was 4.5% and 4.7%.
Bush2 reduced tax rates in 2001 and had economic growth of 18% compared to Obama’s 13%
England eliminated the personal income tax in 1815, they averaged over 4% GDP growth over the next 35 years.
Vietnam? Just grew 6.5% and 9% after reducing their taxes below the U.S.
Poland with lower taxes than the U.S. grew 5% in 2018.
Caesar and then Octavian, Augustus reduced tax rates on conquered lands, the Roman Empire expanded to its peak of 60 million in the following 200 years.
2
@Hank
Pretty sure you missed @Michael B's point. He said, and it's true, trickle down economics works exactly as intended.
It just so happens that Republicans lie about the intent of trickle down. They say it will benefit everyone. The reality is, it benefits the wealthy.
It's working EXACTLY how it's intended to work. Just not how the average person expects it to work.
6
To repeat, it has been an active state of treason against the government at all levels since the creation of the income tax. (see PBS' American Experience, The Gilded Age.) The GOP effort came into its own in the late 1960s after President Johnson took the fall for the Viet Nam fiasco, our initial everlasting war. The Lewis Powell memo to the 1%ers led to their official organizing act resulting in the CATO Institute, The Heritage Foundation, the American Enterprise Institute, Falwell University's supplying grads to work non-appointive, inside government civil service, Evangelical alliance with the GOP, Ralph Reed's re-creation of the lapsed Democrats' grassroots organizing, Hollywood actor-readers as presidential material and other paid-for actions by the upper 1%. The GOP back and the corporate overlords have been at this for a long time.
29
“Opportunity zones” in Houston tend to be low-lying areas that served as storm drainage. The land is cheap because it floods. So now there are tax incentives to build there—luxury housing no less? So tax payers will also pick up the tab when there’s a storm?
Making America Great Again.
40
@Jennifer I'm not sure I understand; seems to me luxury housing up and above flood levels could be a very cost effective use of the land provided it doesn't simply displace the flood waters to another location especially where housing unable to withstand the flooding has been built.
1
@Martin Byster Houston has no zoning. Those drawn to build low-income or luxury housing in flood zones may be responsible and put mechanicals on the roof etc., or they may just build and cash out, leaving taxpayers to clean up.
And yes, if you put a brick on a wet sponge, neighboring areas get wetter.
18
The Ryan Trump Tax Bill was sold to us on the idea that the corporations would hire more people and raise wages. In the modern corporate world increasing quarterly earnings and reducing labor costs are the goal. Trickle down has never worked.
Imagine that a trillion dollar infrastructure bill would have passed. A trillion dollars in borrowing at low interest rates would have created a large number of jobs. Maybe even good jobs with good salaries and benefits.
Remember this, corporations have never increase wages and improved working conditions unless they were confronted with an equally powerful group of employees.
45
@Rich Pein
"...hire more people and raise wages..."
In 2018, 3.1 million full-time jobs were created. The most of any year since 1984. (Don't write me back with data that includes part-time jobs).
In 2018, ten all-time records were set for total combined employment of Blacks and Hispanics.
In 2018, the bottom quartile received the largest pay increase of any quartile.
In 2018, real disposable personal income increased $597 billion, 240% of the increase in 2016.
When has supply side economics not worked? It's good science.
1
@SurgicalBiologics An incredible $161 billion?Keep in mind that the deficit was just $22 billion in 1997. The Bush tax cuts exploded the deficit, then when the stock market collapsed it ballooned to over a trillion dollars. It was ticking down until 2017. Now it's over a trillion again (and climbing).
32
@John Huppenthal For whom?
Look at actual wages, lack of retirement plans or health insurance, both parents working, job insecurity then tell me how wonderful our “ Brave New World “ of work actually is.
Remember when Regan began counting the military as “ employed”. The wealthy even control how we measure our economy.
Republicans also forget that it was Obama who pulled us out of a recession created by lack of government oversight.
6
When I was in law school, years ago, we learned about progressive tax rates and generation skipping taxes.
Hope President Warren can move us back to those ideas.
21
@global Hoosier
Nobody paid those "progressive" tax rates. When Hoover tariffs to 60% and then personal income taxes to 63%, the Great Depression was on its way.
When Roosevelt increased personal income taxes to 76%, the Great Depression became the Great Depression.
After Hoover and Roosevelt wiped out the taxpaying class, the economy had to live on tax breaks for the politically connected for the next 50 years.
Read the Rockefeller and Surrey reports of the 1950s.
1
@John Huppenthal You're a GOP politician and toeing the republican line quite well.
I suggest that posters here look up his history.
4
The "Upward Wealth Redistribution" (aka tax cut) bill of December 2017 needs to be repealed in its entirety.
The massive borrowing needed to offset the loss tax revenues due to the bill then needs to be redirected to a massive infrastructure program.
27
@oldBassGuy
That taxbill gave all families of four making $53,000 or less a 100% tax cuts.
They now pay zero in personal income taxes.
That's amazing.
In almost all 190 countries around the world, such families are regarded as being upper middle class or rich and pay tens of thousands in taxes.
Despite this 14% tax cut bill, personal income tax revenues in 2018 were higher than in high tax 2016.
That's amazing. That means the "rich" (successful small business creating 3.1 million full-time jobs in 2018) had to be paying more, a lot more in personal income taxes- a growth rate of over 7%.
Amazing!
And you think that work of art, beauty and goodness should be repealed. Incredible.
1
@John Huppenthal
Claims made without evidence will be summarily dismissed.
"... And you think that work of art, beauty and goodness should be repealed. …"
Yes.
3
@oldBassGuy
And, what claims are thise you are dismissing?
Any $40 tax package shows the the tax levels at $53 k
The monthly treasury report shows the tpersonal income tax revenues for 2016and 2018
The current tax law pushed and passed by the Republicans has fired up the pandemic of big corporate stock buybacks, which are nothing more of hoarding of wealth by the very rich!
27
@Louis A. Carliner
"...nothing more..."
Maybe some more.
Business investment in 2016 under Obama? $448 billion
Business investment in 2017 under Trump? $507 billion, a 13% increase.
Business investment first quarter 2019? $676 billion, an all-time record, a $247 billion increase over fourth quarter of 2016.
The American income tax code is and always has been a monument to legal lying, cheating and stealing.
The American income tax code provides deductions, credits, subsidies and lower income tax rates.
But only for certain industries, individuals, transactions, sources of income, business entity structures, contracts and securities favored by special interests lobbyists buying legislative, executive and judicial complicity and conspiracy for their benefit.
Americans have the country that they deserve.
23
@Blackmamba
"Americans have the country that they deserve."
Maybe.
American median household income: $62,400
European Union median household income: $40,000
Maybe we can do better still.
@Blackmamba Thank you for making the distinction that the law and justice are not the same thing.
Krugman's idea that the federal gov has to pay for things, good & bad, with taxes or borrowing is just plain wrong.
The gov doesn't need your money. It can (thru the FED) create as much as it needs out of thin air. Just think about where money you pay your taxes with came from in the first place. Unless you have a printing press in your basement, it originally came from the federal gov.
But there's a catch. If the gov needs to create too much money to do the things we want it to do, we may not be able to make enough stuff to soak that money up & will have too much money chasing not enough stuff, i.e. excessive inflation. This is rare & is usually caused by shortages, e,g, of oil.
But that's easy to solve & where taxes come in. Taxes allow the gov to take back the excess money & prevent inflation. The purpose of taxes is to adjust the amount of money in the private sector. The more we can produce, the lower taxes can be.
So the way to run things is to spend money to facilitate production. Tax cuts do this, but in an inefficient way. If we cut Daddy Warbuck's taxes, he does not need to spend the money; he uses it for financial speculation. If we cut poor Joe's taxes, he spends the money on stuff--food, house paint, etc.etc. This promotes production of food, etc.
Even better if we pay Joe to fix a bridge, the money still gets into the economy, AND we get the bridge fixed.
Just remember, the federal gov will run out of money when the NFL runs
out of points.
13
@Len Charlap It's interest rate that are a problem. The Fed doesn't have much wiggle room.
@Tammy - I don't think interest rates affect the economy as much as people think. If the federal government supplies the private sector with enough money, people, businesses, and state & local governments will not have to borrow so much.
I think interets rates have a large effect simply because people believe they have a large effect.
Anecdote: In Austin TX a few years ago, a developer wanted to put up a condo tower downtown. The city agreed to pay for utility infrastructure on the assumption that residents would then pay utility bills that would offset the city's original "investment" in the project. But the buyers were wealthy people who rarely occupied the condos; they mainly visited to attend Formula 1 races (another promotional boondoggle) or other events. Perhaps they simply owned the properties as "investments" themselves, as is the case in many urban centers (New York, London). And because no one really lived there, the city failed to earn on its "investment." Thus do governments promote business at the public's expense.
36
@JEB
No occupancy, no crime, no traffic burdens.
Pure property tax revenue. Maintenance jobs for a few people.
@JEB
So, the city of Austin somehow profits from providing “utilities” to its residents. Sounds funny to me. Maybe that’s how things work in Texas.
@JEB Yet people were hired to build the condos.
While I agree with Krugman's criticism of economic opportunity zones, it should be noted that both Republican and Democrats have endorsed these scams over time. While Republicans utilize the "tax credit for the rich to encourage them to give a little more to everyone else" strategy exclusively, Democrats have used the same technique quite a bit.
5
@Glenn
I agree with Mr. Krugman's assessment that, while Democrats have been compromised by the campaign finance system (which was pushed to extremes by the Republicans in the Citizens United case), Republicans are now corrupt, in service of the wealthy and corporate class exclusively. There is a big difference between "compromised" and "corrupt." To argue "the Democrats do it too" is to equate a man who steals a dollar to a man who swindles thousands out of their life savings, saying "both are thiefs." False equivalence is a prime strategy of right wing Republicans seeking to minimize or deny who they really are.
33
Is there one Democrat on record advocating literally reversal of the abuses described here?
This essay could have been written about what the Democrats didn't do to propose an alternative to the tax law or flatly oppose it.
Time and again Krugman makes excellent points about US economic policy. He practically never names one elected official prepared to speak in favor of alternatives to the damaging policies and practices he cites. Isn't that the most troubling aspect of our economic and political reality.
7
@stewart bolinger
Obama proposed an infrastructure bill to a Republican dominated Congress and was stymied. Trump proposed his tax cuts to the same Republican dominated Congress and was soundly endorsed.
30
@stewart bolinger
One who suggests that there isn't "one Democrat on record advocating literally reversal of the abuses described here?" is either being disingenuous, or has not been paying attention. Democrats have passed many pieces of Legislation, addressing a variety of problems, which have been placed in the Mitch McConnell graveyard without a vote, or even a hearing. Democratic Presidential Candidates have proposed many solutions to the problems described here. There are too many Democratic Candidates, and they have not received enough media attention, due to Donald Trump's mastery of dominating the news cycle. The media is not blameless for this. However, anyone paying attention to a variety of credible news sources is aware that the Democrats have not sat silently by during this travesty of a Presidency.
26
@stewart bolinger
Every democrat in the Senate and House voted No on this tax bill, but that wasn't enough to defeat it, as both chambers were controlled by Republicans.
1
Borrow more for infrastructure? How about stop borrowing on a new credit card based on every idea we concoct? The tax cut was a crime for future generations as was the expense of the wars in the Middle East. I would love to see a plan to spend what we have and actually pay off debt. Every day 3 Billion is added to our debt. In 20 years at this pace we will be paying more in interest than on anything else including defense. Time to pay the piper and stop the insanity!
12
@James
"In 20 years at this pace we will be paying more in interest...."
Maybe, maybe not.
In 1994, federal debt service was over 4% of GDP.
In 2018 federal debt service was 1.6% of GDP.
A nothingburger.
Further, in 2016, the nominal GDP growth was $485 billion while the nominal deficit was $580 billion. Further, nominal tax revenue growth was negative.
While in 2018, the nominal GDP growth was $1,030 billion, $250 billion more than nominal deficit of $780 billion.
Your idyllic "paying off debt" hasn't boded so well for the U.S. Every period of paying off debt has been followed with a severe recession or depression in our 200 year plus history.
3
@John Huppenthal - Thank you for writing my usual reply. One minor correction, the figure of 1,6% for debt service does not account for the fact that the FED returns the interest paid on the Treasury bonds it hold to the Treasury, making the figure even lower.
Here is the data behind your last paragraph:
The federal government has balanced the budget, eliminated deficits for more than three years, and paid down the debt more than 10% in just six periods since 1776, bringing in enough revenue to cover all of its spending during 1817-21, 1823-36, 1852-57, 1867-73, 1880-93, and 1920-30. The debt was paid down 29%. 100%, 59%, 27%, 57%, and 38% respectively. A depression began in 1819, 1837, 1857, 1873, 1893 and 1929.
5
@James Paying off the debt would redistribute wealth to the already wealthy both in the US and elsewhere. It would also badly crimp demand further hurting its citizens. A government budget is not the same as a household budget. Given sufficient economic growth, moderate inflation and low interest rates, servicing the debt presents no real problem. The real problem is not spending resources where they are needed.
12
Is anyone with a functioning brain and a memory that stretches beyond last night's dinner surprised by this? In at least the last 40 years, from Reagan forward, there has never been a single Republican change to tax rates and rules that has not benefited the wealthy and large corporations at the expense of middle and lower income Americans and small businesses. That fact alone has been a major driver of rapidly expanding wealth and income disparity over recent decades. The result is that the gap between the wealthiest and the rest of us is wider now than at any time since before the Great Depression. Incidentally tax cuts do not pay for themselves. Laffer lied.
71
@truthtopower40 Elect Bernie and he will destroy the upper classes and we will all be equally poor.
Yep. It all started with “Government is THE problem.”
14
@Mike Pod, no “Republican government is the problem”. When you have a party that is so in the pocket of oil, NRA, rich donors, etc., all you have is a government working for the people who buy it. While plenty of Dems take money from donors, more and more are going for the small donors, and even when they don’t, most of them do the work for the poor and middle class, groups the GOP could care less about. So, no it’s Republicans who are the problem.
40
Trump and the Republican Party detest poor people. They are leeches who want to take money from the wealthy. Both are con artists wholly owned by lobbyists and corporate America. That so many of my fellow Americans cannot see the scourge they are is enraging. Wake up and see the obvious - Trump and the GOP don’t care about democracy or honesty.
25
@joe hirsch
"...detest poor people..."
Wanting to give them a job is not the same as detesting them.
Unless you have a new definition for "detest".
What are the Democrats doing? Nothing. That in itself is corrupt.
6
Making America Greatly Aghast, one Republican senator's offshore bank deposit at a time. Isn't that what American taxpayers are born and indoctrinated for? To enrich their fascist rulers? Or am I missing something?
12
"The Art of the Con" by Donald Trump and the Republican Party.
25
Our legislators try to fix social problems like inadequate housing with tax incentives and then calls them tax dodges when they are actually used. What hypocrites!
"We have met the enemy and he is us."
6
Democrats, please, in the campaigns, keep the message about the Republicans SIMPLE. Repeat, repeat, repeat that they are “of the rich, by the rich, for the rich.” Thanks Karenteacher!
27
That word, infrastructure, turns up often including a few times here.
I think the Times is remiss in not providing examples of American infrastructure with comparisons of particular elements of infrastructure in other countries.
My month in the northeast USA every summer gives me plenty of material to compare infrastructure there with infrastructure here in Sweden where I spend the other 12 months of the year.
Will not repeat my comparisons but will point to an infrastructure element always under discussion in the northeast that shows how far behind the US intends to remain.
Natural gas pipelines, infrastructure elements that practically speaking are forever are being laid to guarantee that New England remains fossil-fuel country. After the Lawrence-Andover MA natural gas explosions and fires there was brief mention in the Times of something that is rarely mentioned in the Times, the heat pump in its several different forms.
The sane thing to have done totally after those natural gas failures would have been to replace completely with heat pump systems, especially ground-source wherever possible.
Here in my city, Linköping, we have a vast network of pipelines underground but they carry hot water, not natural gas, hot water that heats my home and most buildings in the entire city. No natural gas pipelines here.
Only-NeverInSweden.blogspot.com
Citizen US SE
13
I have a friend who is in his mid-seventies. He was born behind the Iron Curtain, emigrated twice before arriving in the United States as an advanced-degree-holding adult. How he is a naturalized citizen.
To hear him tell it, there is _no such thing_ as a "public good" to be paid for by public funds. ANY road, bridge, highway, sewer system, water-purification plant — whether new construction or improvement to existing facilities — should be paid for by "user fees." To him that means tolls on bridges & highways built, maintained and operated by private companies. Governments can collect fuel taxes and vehicle-registration fees (for what purpose he doesn't necessarily say).
So, I ask him, what about the smaller roads that bring groceries all the way to our neighborhood supermarket? "Cost of construction & maintenance by the private operators gets priced into the cost of the groceries."
He's smart, articulate, successful in his profession, intellectually rigorous & self-consistent. He describes himself as a libertarian, but votes Republican. He doesn't read the NYT or the WaPo and dismisses "National Palestinian Radio" due to their "evident biases" and only half-trusts the Wall Street Journal.
No such thing as a "public good"? No such thing as "market failure"? Clearly he didn't take Econ 101 in college, nor has he absorbed much of its substance from news reportage.
But I must say, he's fun to argue with!
2
"Bum's rush" does not mean what Professor Krugman seems to think it does.
The news from the USA is getting depressing.
It is lots of ....
.....lies from Trump (and his enablers).
.....killing by military weapons (and the enablers).
.....unnecessary struggles by nice people who deserve better (but are not in the top 10%).
Why do they choose to live this way?
8
"... policy by tax break — which consistently fails..." It doesn't fail at all. It does exactly what's intended: make the rich richer and the poor poorer. As for "selling" such bills as being helpful to the poor, well, any buyers apparently have yet to learn that today's Republicans are always guided by the maxim "Never give a sucker an even break."
12
This criminal republican administration hasn't accomplished anything except the massive tax cut for the rich and for corporations. Everyone else gets a healthy dose of gratuitous cruelty and scorn. A majority of Americans will send the republican party to the unemployment line in 2020.
8
"...such policies rarely trickle down..."
When has supply side economics not worked?
Trump reduced tax rates in 2017, in 2018 we had real economic growth of $680 billion, up from $290 billion in 2016 and by comparison with Europe at $210 billion.
Reagan reduced tax rates from 70% to 50% in 1983, economic growth was a stunning 7.3% in 1984. The highest growth in the last 65 years.
Reagan reduced tax rates from 50% to 28% in 1986, economic growth was 4.9% and 3.6% in 1987 and 1988.
Reagan tax cuts combined created the highest six year period of growth, 31% since the Kennedy tax cuts in the 1960s (37%).
Congress cut taxes in 1948, six quarters of highest growth in the history of the U.S. 16.4%, 12.7%,16.3%, 8%, 5.6%, and 7.1%
Coolidge/Harding reduced income tax rates from 75% to 25%, economic growth in the 20's was 37%
Kennedy reduced tax rates from 91% to 70%, economic growth was 6.5% and 6.6% in 65 and 66.
Clinton reduced capital gains taxes by 29%, economic growth in 98,99 was 4.5%, 4.7%.
Bush2 cut tax rates in 01, had economic growth of 18% compared to Obama’s 13%
England eliminated the personal income tax in 1815, they averaged over 4% GDP growth over the next 35 years.
Vietnam? Just grew 6.5% and 9% after reducing their taxes below the U.S.
Poland with lower tax rates than the U.S. grew 5% in 2018.
Caesar and then Octavian, Augustus reduced tax rates on conquered lands, the Roman Empire expanded to its peak of 60 million in the following 200 years.
@John Huppenthall
Fast and loose with the data John. Poland for example has averaged 4.2% annual GPD growth since 1992, even under high tax rates. In 2017 growth broke 4% but it is down since then. Contributing to growth has been immigration from Ukraine and huge EU investments. EU investments are set to continue at .8% of GDP after 2020. It isn’t useful to look at tax impacts on growth without looking at other contributing factors
3
@John Huppenthal
Amazing the claims you can make using cherry-picked statistics and false correlations.
8
@John Huppenthal How are you measuring growth rates? If you use FRB data for industrial production from 1953 to 2012, you find the highest rates of growth always occurred under Democrat administrations. The Republican Ronald Reagan actually came in at 5th place, behind Jimmy Carter, in four year growth rates. The highest growth rates by far occurred under Kennedy and Johnson, followed by Clinton. And to your point, Reagan's tax reforms of 1984 and 1986 actually raised taxes by tightening loopholes and exclusions.
4
Our pockets are being picked right in front of our eyes.
6
The GOP has thrown every working man and woman under their greedy, corrupt and self-serving bus.
The millions who don't get it are the ones they are counting on to let it lie. Ignorance is their ideal constituent and they will do everything in their power to keep it that way.
Their goal is to erode everything that is a benefit to our society country and our lives, and they will take you hostage before you even realize it has happened.
You know who the perpetrators of this scam are and you have the power to shut them down.
Register and Vote.
9
@Gretchen And the Democrats have done such a great job. Just look at the inner cities. They look like third world countries. Crime. Drugs. Etc.
It should be pretty clear by now that the current GOP simply does not believe in wealth redistribution, on any level. They like the deck stacked in their favor. They justify the huge corporate subsidies that benefit them as though they deserve them. Meanwhile, slashing public programs on the environment, healthcare, social security etc are in complete alignment with their governing philosophy of deck stacking and their hypocritical allergic reaction to subsidies for the public good. I mean, really, the pendulum has swung so far in the wrong direction that only a total mutiny on the part of the voters will even begin to cleanse the wrong and mean spirited 'policy' of this current batch of GOP cowards.
281
@Lake Monster
"GOP...doesn't believe in wealth distribution..."
Maybe, maybe not.
In 1980, the top 1% of taxpayers, those with an AGI of $80,000 or more, paid $47 billion in personal income taxes.
Adjusted for inflation, $80,000 is $237,000 today.
In 2018, taxpayers with an AGI of $237,000 or more paid over $900 billion in personal income taxes.
As are result, the poor in the U.S. have cars, cell phones, running water, electricity, toilets, showers, sinks, beds, shoes, refrigerators, washers and dryers, couches, refrigerators, stoves, and more calories than are healthy for them.
By comparison, young girls from poor families in India clean latrines with their bare hands to help support their families, live in shacks without water or electricity, have no shoes and eat rats to survive.
Krugman's tax policies have trapped 570 million people in Latin America, 1 billion in Subsaharan Africa, 1.4 billion in China and who knows how many in south Asia in multi-dimensional poverty, a kind of sub-human existence poverty unknown in the U.S. By comparison, our poor are rich by world standards, thanks to the redistribution policy of Reagan.
5
@John Huppenthal
The poor in the US have electricity and running water as a result of the goodness of a many of shrinking middle class men, not you. Many poor can’t pay their bills for such basics. The rich run the supply houses, taking the top off any money these kind of men used to make on material.
21
@John Huppenthal
*boggle* Krugman's tax policies imposing poverty on over three billion people? If China is still trapped in "a kind of sub-human existence poverty," how are they, as a nation, getting rich selling us everything from toys to semiconductors? Ditto for Brazil, which is looking pretty good on account of its deepwater oil discoveries developed by Petrobras. India has become a software-development, technical-support, and business back-office powerhouse. By some measures India & China have larger middle-class populations than anywhere else in the world. (That's three of the four letters in the old buzzword/acronym BRIC).
As for solving abject poverty in the United States, let's give credit where it's due. Rural electrification & the Tennessee Valley Authority began under FDR as part of the Works Projects Administration. Back when "wetlands" were still called "swamps," we undertook to drain them (literally) in order to reduce the _malaria burden_ in the impoverished rural deep south. Food stamps, Head Start, and Medicaid all began under LBJ.
Reagan's policies towards the poor were best summarized by his vilification of the (largely fictitious, certainly exaggerated) caricature of the Welfare Queen Who Drove A Cadillac.
But then I suppose it's good to be in America, where you don't have to scuff up your feet (apologies to Randy Newman).
21
The Republicans used to believe government is an unnecessary evil and if we starve it and give all taxpayer funds to the more efficient private sector then we'll get better services.
Now they believe that if you're poor is your fault and they have better things to do with our money than helping poor people.
8
@Barry Henson
“...if you are poor it is your fault...”
No, it’s the Democrats fault for making tax rates too high, welfare too beneficial and regulation unnecessarily burdensome.
I really would like to know the actual date when "that Republicans are no longer willing to spend public money in the public interest" as you wrote in the column, Mr. Krugman. Anybody who follows tax laws in our country knows that they are written on the basis of loopholes. There is an easy solution for this travesty that we call tax code, but nobody has the moral character to call it out - base taxes on gross income, period...
6
How many opportunity zone projects are happening in Moscow Mitch's back yard in rural Kentucky?
Or has the Republican party concluded that there are no opportunities there or elsewhere in rural America?
4
"Among other things, the bum’s rush meant that much of the bill was drafted by lobbyists on behalf of their clients. Given that, it shouldn’t be a surprise that a provision sold as a policy to help the poor has actually ended up being a giveaway to hedge funds and real estate developers."
I don't believe there is any reasonable living soul who doesn't see Trump and his Republican partners for what they truly are, which simply stated, is that they are a horde of self-serving, self-dealing, wholly insatiable avaricious predators intent on accumulating vast wealth by any means imaginable, including, and especially, beggaring the poor and the middle-class.
And whomever remains silent as this rape and pillage continues, remains so because they are beneficiaries of this criminal enterprise.
Three years into this horror show of a Presidency with not one day passing without experiencing some abominable effect of some dastardly thing made to occur by Trump and his criminal partners.
And, from my perspective, and I dare say the perspective of tens of millions of decent Americans, this Presidency is indeed operating a criminal enterprise engaged from day one in perpetrating the greatest fraud ever visited on the people of America.
May he and his minions lose "bigly" in November 2020.
25
I'm going on a tangent, but hear me out.
I understand the South fought the Civil War really to keep slavery. But why did the North really fight? It couldn't be for a noble cause, seeing how reconstruction was left in tatters and black Americans continued to be oppressed.
Perhaps the North despised the South not for the moral abomination of slavery, but for its cheap labor. And the North saw profit in supplying the war. That's not what's taught in high school history. But if so, it would explain why the GOP serves the rich.
1
@William Fang
The South's initial war aim was to secede from the Union because it felt constrained in exercising "states' rights" guaranteed by the Tenth Amendment. "States' rights" to do what? Why, to keep slavery and to force its expansion into territories further west as they were organized into new states and admitted into the Union. Lincoln's initial war aims were to prevent expansion of slavery and to demonstrate, by force of arms, that the Union was indissoluble. Only later did emancipation become an overt political goal. The failures of Reconstruction are, IMO, directly related to Lincoln's assassination and the pusillanimity of his successors.
James McPherson's _Battle Cry of Freedom_ is an excellent one-volume summary of the Civil War. He begins by pointing out that, following the Revolutionary War the North was culturally diverging from the South due to industrialization and urbanization, whereas the South remained largely agrarian, slave-holding, and rural.
Consider that over 1-million were killed or wounded on both sides combined (divided 58:42 Union:Confederacy, and 60:40 dead:wounded), corresponding to ca. 4% of the total population. I'd say that war-profiteering is a pretty callous reading of the Union's motivations.
It's also essential to remember that in the 19th Century both the Republican Party _and_ the Democratic Party stood for very different things than they do today. Your suggestion regarding the GOP's serving the rich doesn't exactly track.
1
A million people hit the streets in Hong Kong over an extradition treaty. Hundreds of thousands of Brits demonstrate across the UK to oppose BoJo's Brexit tyranny.
And here we are in the 3rd year of living dangerously under the thumb of the Boy Who Would be King (but settled for the presidency) and nowhere a massing of what should be millions of Americans disgusted at a great democracy laid low by an orange hologram of an alleged human who proclaims himself the "Second Coming".
The word limit doesn't allow even a cursory review of the top 10 crimes against America, reality, truth, honor, justice and global amity.
Everyday a torrent of lies, swamp gas, hate, and corruption in plain sight. Everywhere things simmer but never boil over because there's next year. And there's social media to dissipate anger and divert to eye-candy or clickbait.
For children there's no teachable moment, no explanation for the horror that's happening and horror to come. What political legacy do we leave them?
Trump is at war with America and the world. But too many keep hoping before the last episode he'll come around and at minimum slow his demolition of democracy and distortion of normal.
Tell you what: let's have a tax strike. Everyone declares the maximum number of dependents to lower paycheck deductions, set aside the max for health savings accounts, and pay federal taxes into an escrow account.
No taxation without representation -- doesn't that have a familiar ring to it?
12
@Yuri Asian
Consumption expenditures are increasing at over a 7% pace, life is good. Only liberals are cavilling.
@John Huppenthal
Like all those "whining" farmers in the wine cellar?
When you see the same bad results from the same people over and over again, there are two explanations.
One is that they're simply insane/incompetent/deluded/evil/etc.
The other is that they are getting exactly what they want and all their protestations to the contrary are simply lies and self-deception.
The two explanations are not mutually exclusive. They are not ruled out by Occam's Razor either.
6
Dr. Krugman,
Thank you for this article keeping this issue front and center.
I have read other similar material and it is disgusting to see the greed so rampant in our system. We all know it is no accident but is, in fact, designed into our policies by the corporate calligraphers who write them.
7
A testament to the true greed of the Republican Party— my republican sister in Texas says things have become obscene in terms of tax policy. This just after telling me she’s putting 200k into an opportunity zone investment scheme.
3
Republicans waited 8 years for Obama to leave office and rushed the whole tax cuts through as soon as Donald was in office because they have taken all the donations from their corporate sponsors and rich friends.
And this was the once-a-life-time chance to pay back their friends. What was amazing is how many poor Americans bought this message even though they did not get a penny for their vote.
That's why the Republicans need Donald, the reality host, who can do a make-believe show...
8
A million people hit the streets in Hong Kong over an extradition treaty. Hundreds of thousands of Brits demonstrate across the UK to oppose BoJo's Brexit tyranny.
And here we are in the 3rd year of living dangerously under the thumb of the Boy Who Would be King (but settled for the presidency) and nowhere a massing of what should be millions of Americans disgusted at a great democracy laid low by an orange hologram of a human who proclaims himself the "Second Coming".
The word limit doesn't allow even a cursory review of Trump's top 10 crimes against America, reality, truth, honor, justice and global amity.
Everyday a torrent of lies, swamp gas, hate, and corruption in plain sight. Everywhere things simmer but never boil over because there's next year. And there's social media to dissipate anger and divert to eye-candy or clickbait.
For children there's no teachable moment, no explanation for the horror that's happening and horror to come. What political legacy do we leave them?
Trump is at war with America and the world. But too many keep hoping before the last episode he'll come around and at minimum slow his demolition of democracy and distortion of normal.
Tell you what: let's have a tax strike. Everyone declares the maximum number of dependents to lower paycheck deductions, set aside the max for health savings accounts, and pay federal taxes into an escrow account.
No taxation without representation -- doesn't that have a familiar ring to it?
4
My favorite of these comments are the ones claiming that a Nobel-Prize-winning PhD in economics doesn’t really understand economics.
7
As a former Republican, I have concluded that the GOP has totally embraced a fiscal ideology that effectively embraces a systemically corrupt application of tax policy. We must remove this party from positions of power before its oligarchical thievery destroys our Republic. We must do it quickly.
12
@the doctor
"...corrupt application of tax policy..."
In 2018, all fmailies of four making $53,000 or less paid zero.
In 2018, all taxpayers making $237,000 or more AGI, paid over $900 billion in personal income taxes, an all-time record.
What's corrupt about that?
Want to see corruption? Look at Europe. Despite their higher tax rates and larger population, that group paid less than $500 billion.
That's corruption.
"The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness." – John Kenneth Galbraith
11
So sickening already. When do we get to fight back.
1
Proof that it is worse than we thought.
When will the People be in the streets with Pitchforks and Torches?
5
The Rich get richer, the poor get dead. And quickly.
1
@Phyliss Dalmatian
"...the poor get dead..."
Not so fast any more.
In 2018, the accelerating death rates from Opioid overdoses came to an abrupt end after an 18 year run.
Maybe the record 3.1 million full-time jobs got them out of the house and helped break chemical dependency.
Three economists published a fed paper showing the correlation between the 13 million discouraged workers and Opioid addicttion and death.
This piece goes hand in hand with the piece on "drain the swamp" corruption in this edition of the NYT. When there is a final reckoning of the (mostly, but not all) corruption of the Trump administration and his congressional Republican enablers, perhaps it will take the form of a truth and reconciliation moment. I would, however, not hold my breath on that one. There will be too many bilked individuals and small businesses who will howl if no one serves time this time around. If we can just get DT and Co. out of the government business, we'll be in the black or heading in that direction.
1
How about a 2 year capital gains tax holiday for home owners. Allow some of us older folks to sell our houses and move on.
1
I think you get 250k each for husband and wife, which will only help those in rich areas of the country.
Krugman is always so insightful and spot on with his analysis. We get more and more given to the rich and the middle class becomes poor and folks working two jobs cannot pay their bills and miss out on any meaningful family time. Clearly Trump goes along because he, his family and friends benefit and his fake populism is shown up to be the sham it really is. The Republican party keep selling to folks with limited insight that they have a plan to make everyone rich, when they know going in that only a few will benefit. Trickle down-ha- more like trickle out from a leaky pipe that fills the coffers of the rich.
3
Does anyone really think this multibillion dollar opportunity zone tax incentive was actually intended to help “struggling urban workers”?
High-end real estate developers have been feeding at such tax break troughs for decades. Putting an “opportunity zone” label on it was just smoke and mirrors for yet another instance of the “exceptional corruption” Mark Schmitt describes elsewhere on these pages, where this administration and the GOP chose “to elevate private interests, or their own” over the public good.
4
A party needs to serve its constituents. What’s so wrong with that? It seems it’s more a question who has got their act together. Also, words matter. It might be better if we could try not to keep calling it a tax cut. It’s been a tax increase for most of the middle class as anyone from that constituency is likely to tell you. And there’s more of them.
1
@Solomon
"Tax increase for most of the middle class..."
Nope.
Taxation was reduced to zero for all families of four or more making $53,000 or less.
That's amazing.
Such families are regarded as upper middle class or rich in almost all countries of the world and have to pay tens of thousands in taxes.
What's more amazing is that in 2018, personal income tax revenues were 3% higher than in 2016. Meaning that the rich (really meaning successful small businesses) paid more, much more in personal income taxes.
Amazing. A thing of art, a work of beauty.
Excellent essay as usual. However more recently than CHIP a whole lot of Republicans, including President Bush Jr, were willing to spend a lot of money on Medicare Plan D (the prescription drug benefit).
As expats living in France all our income taxes are paid to America.
I assumed that our taxes would help repair the infrastructure but that is not to be the case.
It appears that the election of a president who owes favors to big business will result in legislation biased for their benefit.
What a shame that the heart and soul of America have turned to stone!
7
This should settle all questions regarding what companies like Amazon have gotten for their lobbying efforts.
https://itep.org/amazon-inc-paid-zero-in-federal-taxes-in-2017-gets-789-million-windfall-from-new-tax-law/
Let’s see, who do we all know, who sits at a pretty high office that might have something to gain by creating a loophole specifically for real estate developers....hmm.....for those who voted for trump and for those who supported him in congress, a day of reckoning is coming, and it will be a recession that will be deeper, and longer than the one Bush created. Interest rates are far below normalized, or neutral, companies are more over leveraged today than they were leading up to the 2008 crash. Companies like Tesla, have let billions in junk bonds, companies that have spent almost a trillion dollars on buying back their own stock, Proctor and Gamble paid out in dividends to shareholders equal to its revenues, and they aren’t the only ones. Companies that are valued at almost a trillion now have a negative tax rate, Amazon received a return in the hundreds of millions of dollars. And let’s not forget that now they are floating the idea of indexing capital gains taxes to inflation of course this doesn’t benefit the retail investor.
@RHR
https://itep.org/amazon-inc-paid-zero-in-federal-taxes-in-2017-gets-789-million-windfall-from-new-tax-law/
Let’s see, who do we all know, who sits at a pretty high office that might have something to gain by creating a loophole specifically for real estate developers....hmm.....for those who voted for trump and for those who supported him in congress, a day of reckoning is coming, and it will be a recession that will be deeper, and longer than the one Bush created. Interest rates are far below normalized, or neutral, companies are more over leveraged today than they were leading up to the 2008 crash. Companies like Tesla, have let billions in junk bonds, companies that have spent almost a trillion dollars on buying back their own stock, Proctor and Gamble paid out in dividends to shareholders equal to its revenues, and they aren’t the only ones. Companies that are valued at almost a trillion now have a negative tax rate, Amazon received a return in the hundreds of millions of dollars. And let’s not forget that now they are floating the idea of indexing capital gains taxes to inflation of course this doesn’t benefit the retail investor.
5
The republican party in Washington is a conspiracy to loot the government for the benefit of its major corporate contributors. That people can be conned into believing that the money is for the public good shows the fear they have of the alternatives that the republicans tell them will befall them if they do not support the republicans.
7
Meanwhile back at the ranch in the US the EPA is being gutted (already air quality is plummeting), the CFPB is being dismantled, Dodd–Frank is being compromised, the deficit is going through the roof, the wholesale sell off of huge swaths of public lands, world free trade seriously assailed, the justice department is being revamped with a slew of GOP biased judicial appointees, and all while the nation’s intelligence agencies and the FBI are being disemboweled.
24
@John Townsend
Isn’t the phrase meanwhile back at the ranch from “The Lone Ranger”
It seems to me that whoever drafted the "opportunity zones" provision (by lobbyists for the people who benefited) did so with the express intention of creating a loop hole that would allow this to happen. The "help to create jobs in low income areas" is the eye catching socially responsible cover that is so often employed in these scams in order to garner approval.
What we should be asking ourselves is what kind of people are we that we allow a corrupt administration to ram through a tax cut that will only exacerbate the shocking inequality between the wealthy and everyone else.
Why wasn't there an outcry, demonstrations and people on the street? Have we become so used to being defrauded that we just shrug our shoulders and let it pass? This is madness. The trillions of dollars given away could have gone a long way towards solving many of the urgent social problems in this country today. Instead the rich become richer at our expense and plan the next fraud because they know they can get away with it.
7
If Republicans genuinely wanted to help workers, they would have cut payroll taxes.
4
I live in an Opportunity Zone, otherwise known as a working and middle class neighborhood where 40 year old condos already started at $300k for a one bedroom. Now it’s even higher.
As a middle class renter who’d hoped to buy soon, a tax break for homebuyers would have helped people like me afford the already overpriced housing stock. Instead, they drove up prices all over the neighborhood by building luxury condos to add to the local air b n b inventory. Please let me know when we’ve been rescued from poverty.
Hmm, maybe Reagan was right about the most terrifying words in the English language.
6
@Wondering
You shouldn't mistake government efforts to genuinely improve the lives of citizens w/ efforts by the Republican party to enrich the rich. Believe it or not, governments do serve a vital function, if only to pervade services the private sector won't. Finally, contrary to Republican myth, Reagan was part of the problem. It was he who gave us "trickle-down economics" that continues to define GOP tax policy.
7
@Wondering With republicans it's a self-fulfilling prophecy. They complain about bad government, then get elected and govern badly. See?
3
@Aristotle
The idea that if you give massive tax cuts to the rich the benefits will 'trickle down' to the poor is so derisory that it is difficult to believe that anyone ever took it seriously, It is not a 'tax policy'. I would call it an outright scam.
1
The challenge is not to convince the average reader of the NYT mr Krugman. You are doing an excellent job (for years already). The question is, how can the Democrats explain the average GOP voter what is happening when the GOP is in charge.
Your country has become so polarised that governing responsibly is not relevant anymore (see Trump). A person is either for or against one of the parties.
And deep down this is what is really wrong with America.
Politics isn't a religion. It is a way to organise government, ensuring good decisions are made for its people. In America politics has become a religion, and it hurts democracy and the people badly.
41
@Dutchie
A most important and true observation. When divisiveness goes beyond a certain point it becomes impossible to govern a country effectively. Just look at what has been happening in the UK for the past three years.
2
I'm all in favor of offering tax breaks to businesses for hiring new employees and/or raising employee wages. But I knew the Trump plan was a scam from the beginning because there is a very easy way for government to make the tax breaks work. That method is to permit the tax break only UPON PROOF that the business actually hired new employees and/or raised employee wages. No evidence of performance; no tax break.
14
@lhc
Right. the tax cuts should have been incentivized. But that just makes all of the scamming that much more difficult.
7
"But [the widespread abuse of a provision ... that was supposed to help struggling urban workers] should be seen in a broader context, as a symptom of the Republican Party’s unwillingness to perform the basic functions of government."
Since Ronald Reagan started the tax-cuts for those who didn't need and cuts in social programs who badly needed them, the Republican party has been on a never-ending strife with the progressive elements in the country in various ways, except under GHW Bush.
They use religion conveniently to fool the conscientious rank & file Republicans, telling them Democrats want abortion on demand at any time during pregnancy & so on. They have Jerry Falwell Jr., Pat Robertson & Franklin Graham on their side to sway good, Churchgoing, hardworking Republicans who're in the habit of helping those who struggle to make ends meet. They are led to believe blacks at home & now brown immigrants don't want to help themselves and are waiting for government handouts.
It's not easy to convince Republican voters that their leaders, like Newt Gingrich, Paul Ryan, et al, are simply callous, whereas Democratic leaders like most presidential candidates are conscientious and only want to help those who badly need help.
But the popularity of Elizabeth Warren is scary to me. If she gets the nomination, Donald Trump could be reelected.
4
@A.G.Don't be frightened of Liz Warren. She is smart and experienced, especially in law and economics. read her books). Also, her proposals will do us good and she knows how to pay for them.
25
@A.G. Why? She's exactly what the country needs, although we're already seen that the 'other team' refuses to acknowledge when a Democratic POTUS saves their bacon, a la' Barrack Obama, or a republican burns them bad like W or DJT. People have lost their objectivity, and that wrecks Democracy.
3
@Traveler
"Liz Warren ... is smart and experienced …"
But the electorate sees her as a socialist who wants to give away the hard earned money & wealth of the country to the lazy, undeserving locals & immigrants.
If her plans can be put into practice, I will be as happy as any one else. The chances for that are next to nil.
1
Between our crumbling infrastructure, unchecked Russian infiltration in our electoral system, an unnecessary trade war with China, North Korea perfecting its missile technology, weekly mass shootings and a president that dreams of dropping nukes in hurricanes while buying Greenland, it’s pretty clear that the party that always claims to make us more more safe actually makes us less safe every day.
27
Is anyone still wondering whether we need to remove the GOP from control of Congress and the White House? This country needs accountability and a lot of it to get back on a positive track to repairing the damage to our Democracy; Politics; and our Economy. To mitigate the damage to our alliances and curb China. To put a lock on No Korea and their impetuous leadership.
10
How is it that other capitalist democracies, even with their various troubles, can use taxes to finance infrastructure, health care and college tuition?
Their conservative parties try to reduce public spending, vs liberal parties, but not like our GOP.
How do they have elections without big money from gun makers? So they pass strict gun laws that keep their citizens safer.
How is it other democracies don't turn over their elections to wealthy mega donors, who then dominate lawmaking? That's blessed by our highest court, equating donor money with 1st Amendment Free Speech. Our pro corporate S. Court used our own Constitution to muffle the influence of the citizen majority.
How is it that other countries actually ban paid political ads on their media? Wikipedia says it's to prevent special interests from dominating their political discourse. How come they allow average citizens more of a voice in their policies?
These ads are our biggest election expense, paid by mega donor money. How is it that big media companies abroad exist without big profits from political ads, that swamp our voters in protracted campaigns?
How come other democracies ban pharma drug ads direct to consumer on the media? We are swamped with them day and night.
Our drugs, health care and elections are the world's most profitable and expensive.
Why are these blatant contrasts and their wide ripple effects never discussed by our columnists and TV cable news pundits?
14
Like other comments, mine is in essence:
As usual, Prof. wrote simple English to deliver facts.
Now, how can this be delivered to just a part of Trump base and/or Republican leaning voters whose switch can change the course of 2020 campaign?
Unless someone figures this out, the course takes its predetermined path to Mr. T’s re-election.
1
About 15 years ago, Dr. Krugman wrote that the Republican party was never really a friend of the working middle class (I paraphrase).
This is especially true today with hastily passed 2017 tax reform and yet Trump is met with cheers whenever he brags about this 'accomplishment' at his rallies. When will his base wake up and stop voting against their own financial self-interest?
5
It's really time to re-introduce the educated public to the concept of rent-seeking, because as far as I can see, that is the heart and soul of modern GOP policy: the state exists to funnel special legal status or non-competitive monetary benefits to a limited group.
Another word for a society whose political economy rests on rent-seeking is "privilege", so our young 'uns, even if sometimes over-focused on identitarian privilege, are not wrong to see privilege as the pernicious principle that is undermining and hollowing out progressive desires for a just management of social resources.
4
I think Republicans are being remarkably consistent in demonstrating that they don't believe in gov't helping the poor.
They don't view tax breaks as spending programs. They view them as a way of giving money back to it's rightful owners.
6
Another well-constructed column, and my reaction is familiar: How do they keep getting away with it? Some will say "elections have consequences," but when most votes went to the other candidate, it's really "dishonest elections have consequences." Republicans know that they can't win without gerrymandering, the electoral college, and obstinate obstruction (Mitch McConnell's photo on the dictionary page), and it does help to have some Russian input. This isn't just a "swamp"--it's a bottomless pit.
22
I have never possessed the skills for any kind of academic achievement. So it is only by listening to the opinion of acknowledged experts that informs my opinions.
Politicians and pundits inform me of their prejudices but expertise is derived from years of specialized study using the scientific method.
When Adam Smith wrote the wealth of Nations he was already a noted ethical philosopher without ethical philosophy economics will not sustain an ethical stable society.
One hundred and twenty plus years ago Ambrose Bierce wrote about the Abracadabrans, today thanks to an economy that has no ethical basis we are faced with a society prone to believe in magic rather than science.
I cannot agree more with Dr Krugman's assessment but I do not believe the kind of economy Dr Krugman proposes can be implemented until we debate the kind of society we favour.
It may be that Republicans favour a society dominated by the few who understand the system and are willing to abandon a society that values all its citizens.
I fear however that Republican voters have abandoned the belief that America once had in creating a more perfect union and see their only salvation in the destruction of what they are convinced is a corrupt and ever more evil world.
I know my history and in my world the world's people have never been better off.
It was Voltaire at the dawn of the enlightenment who said "Those who can make you believe absurdities, can make you commit atrocities."
9
Republicans prove again and again that although they are talented in campaigning for office -- spurring turnout of conservative voters, suppressing turnout of Democratic voters and even declining to count the votes of Democrats -- Republicans have no interest in actually governing.
In the never-ending campaigns they wage, Republicans know that many working families of every political persuasion have caught on to the fact that, although everyone says the economy is healthy, working families are losing ground.
That awakening does not bode well for Republicans who have to run for re-election in 2020.
Well, as they say, necessity is the mother of invention. The so-called opportunity-zone concept was invented as a scam on Americans who badly need jobs paying decent wages.
The very rich who invest in opportunity zones build fancy high-rise office buildings, and the I.R.S. pretends that those luxurious buildings will benefit working-class families, as long a few jobs are created in nearby areas.
Poof! As if by magic, opportunity-zone investors no longer need to pay taxes on the huge annual capital gains received by the very rich every year from totally unrelated businesses.
On top of that, the public relations firms employed by the very rich make sure that their clients praised in newspapers and on television for creating jobs for the needy.
The rich get richer, the poor get relatively poorer, and the rich are lauded as heroes for making it happen.
7
@sdw
"The working families are losing ground"
Nope.
In 2018, the bottom quartile received the largest pay increase of any quartile. The second quartile received the second largest increase.
In 2018, the economy created 3.1 million full-time jobs, 200% of the 1.56 million created in 2016. (Please don't respond with part-time job data) The largest number of full-time jobs since 1984.
In 2018, real disposable personal income increased by $597 billion, 240% of the $244 billion increase in 2016.
Overall, workers received their largest pay increase since 2007.
And, it shows, consumption is increasing at over 6% rate.
Confidence is much higher than at any time in the last decade.
Too bad Mr. Krugman didn't drive a few miles north to New Rochelle, NY to learn that the mayor and the city council (all Democrats) have been cheering on and fast-tracking developments in the struggling downtown that could result in more than 5,000 apartments. And yes, there are affordable units set aside in each project.
But of course it's always the fault of the big bad Republicans who give handouts to the rich. Tell that to the Democrats who run New Rochelle.
1
@Erik
The question is what are the Republicans doing to make things better for society not what mistakes the Democrats in your judgment might be making in your neighborhood.
1
@Erik
What kind of perverse society 'sets aside' affordable housing as some kind of benevolent handout?
4
Professor Krugman’s three objections to the ‘public/private partnerships’ certainly are true. But above all, the problem with using tax incentives to do public policy is that elected officials and the permanent staff of government abdicate their role in directing public policy. Instead, it relies on private individuals and corporations to set aside their own vested interests and instead work for the good of everyone, and often those who have the fewest resources and influence, an assumption that has almost always failed. But what do you expect of a political party that has vowed to reduce the size of government so much that it could be drowned in the bathtub?
14
Outstanding essay. Your perfect pitch insight on how government policy can be a source of corruption under the guise of addressing social needs in America is timely and illuminates the Times report on the reality of how the Opportunity Zones created without the checks provided for in the Constitution can be used to benefit those special members of the insiders club and not at all address the real needs of our society. This is shameful and permanently stains the policy record of the Republican led Congress. With no hearings, and limited Committee staff review and it seems, an absence of oversight on how the Opportunity Zone provision of the 2017 tax cut is being carried out,
It is my hope that the House Democratically led committees launch an oversight investigation into the opportunity zone investment and that it gets well covered by our major media.
Democratic candidates for the Senate, House and White House should include this in their public statements and advertising on why the public should vote "D" in the special election in NC and in the November 2020 Election.
18
Eliminating taxes for the rich (along with all manner of regulation for big business) has been the only policy Republicans have cared about since Reagan, period, full stop. The GOP has become a wholly owned subsidiary of the largest corporations and richest individuals. All the rest is window dressing and/or means to this end.
U.S. politics become very simple to understand when viewed through this lens.
37
@David
"Eliminating taxes for the rich..."
I think that is a Democrat specialty. Bezos, Buffet, the Google boys, the Apple empire, Steyer - none of them have to pay even a penny in taxes.
Meanwhile the Republicans made successful small businesses pay:
37% federal + 3.4% medicare +8% state + 3.5% NYC + 3% Unemployment + 8% sales on what's left = 60%
Instead of 63%.
Meanwhile, they eliminated all personal income taxes for all families of four making $53,000 or less.
Yeah, big bad ogres.
And then there are the old folks who just don't understand. Mother's uncles were successful Republican public works contractors. How far we have strayed from that era. Roads, sidewalks, bridges, and schools around my hometown all have little imprints with our family name. But mother is unfamiliar with the newfangled, complicated word "infrastructure". She berates Democrats who want to spend on "infrastructure" even though that is precisely what made her uncles successful businessmen.
34
40% of Americans seem ready to fight to the death so that 1% of Americans who are doing incredibly well and have more money than they know what to do with won't have to pay another nickel in tax. It's always a spending problem, never a revenue shortfall even though the majority of Americans want and rely on public goods and services. And still it's political suicide to suggest defense spending cuts.
37
" . . . [T]he modern G.O.P. pretends to share traditionally liberal goals, like poverty reduction . . . But it refuses to spend money on these goals, trying instead to bribe private investors into serving those goals by offering targeted tax breaks."
Dr. Krugman correctly notes that the GOP merely pretends to share goals like poverty reduction. Then, regrettably, he falls into our delusion that the GOP might share them but is just wrong about how to reach them. No, the GOP is not even engaged in a self-serving calculus that the goals are worth bribing the wealthy to achieve for political gain. The GOP intends nothing of the sort.
The unvarnished truth? The failures of GOP policies to achieve their advertised goals at all is not a bug in the system or an unfortunate outcome of a well-intentioned plan. The further enrichment of the most wealthy among us is the result of these policies by design and intention.
It is not just that the GOP has zero interest in broad-based prosperity and the policies to achieve it. It is not just that the GOP has zero interest in addressing public issues such as infrastructure with sound public policy and action. It is that the GOP has 100% interest in continuing to pillage and to plunder the wealth of this country to benefit its donor class with politicians as the only ones upon whom this wealth ever trickles.
Until voters, the media and Democrats grasp this hard truth, the GOP and the wealthy will continue getting tired of all the winning.
11
@gurnblanstonreturns My pet gripe against Republican financial hypocrisy is the way they piously preach the importance of saving every fetus, but have no intention of actually helping pregnant women or infants with health problems, although the USA has one of the worst records of maternal injury and death. Republicans like to control other people's lives, but don't want to pay taxes to help anyone.
1
@Carol Robinson
"...USA has one of the worst records for maternal injury and death..."
You can't tell it by infant survival rates. Our infant mortality rate is exactly equal to that of the European Union and if the present trend continues, we passed them in 2018.
@gurnblanstonreturns
"...Republicans have zero interest in broad based prosperity..."
In 2018, the economy set ten all-time records for combined Black and Hispanic employment pushing their unemployment rates down to the lowest levels in recorded history.
In 2018 the bottom quartiles received the largest increase of any quartile.
One of the most broadbased expansions in history.
"Among other things, the bum’s rush meant that much of the bill was drafted by lobbyists on behalf of their clients."
That's not what a "bum's rush" is. It's the act of "'86ing" someone — kicking them out of an establishment because they're considered undesirable.
Maybe you could stretch that definition to apply to a legislative bill. But if you did, it would mean the opposite of the way Krugman used it here: rejecting a proposal one didn't support, rather than hurrying it through in an attempt to have it enacted with the least possible scrutiny.
1
Thank you Mr. Krugman for points most of the media either ignores or obfuscates. The Republicans are not interested in public policy in the public interest, policy is in the interest of their wealthy benefactors. They do less now to pretend otherwise.
5
Hello Paul
Our national press recommends that Denmark buy the USA for $1.00 it would then have one of the highest per capita incomes in the world, health care for all, no shopping mall shooters , highest environmental standards, education and quality of life. No swamp to drain as Copenhagen has none. No more six times Chapter 11 for chief executive contenders, the benefits would be endless.
14
But why? What’s the ‘broader context’ of why the GOP is ‘unwilling to perform basic functions of govt’ for We the People?
Why has America, once an example for the world, been able to get away with this? Our political system actually contradicts democracy.
We’re painfully aware of tax loopholes drafted by lobbyists. Why tell us again? Tell us why this is a NORM in our system. ? Crumbling infrastructure? GOP policies DON’T trickle down, but benefit the rich? Really?
We DON’T think these are isolated mistakes. It’s a total commonplace – Repub are long known for anti - public spending. Same old.
Trace cause/effect. How did our whole democracy get so corrupted that this party can thumb its nose at the citizen majority?
How did they convince millions to swallow the distortion that our ‘freedom’ depends on small govt? We are the govt.
Trace back why the US stands out for lack of HC, gun safety, infrastructure and green energy that endanger our safety, well being and our lives.
Why avoid the Supreme Court's blessing of unlimited mega donations by big money in our elections? Instead, trace the effects.
Candidates say they must take corporate money to compete, or else it’s ‘unilateral disarmament.’ America does need to disarm---from both big money and from guns. See the connections of how the GOP still gets votes while it fails in public duty.
1
Dr. Krugman overlooked the dictum: Follow the money, and two strong follow the money factors:
1 -- the threat of wealthy big donors to not contribute again to Republican campaigns unless they got the large, enduring tax cuts and benefits that they had been buying with their investment donations;
2 -- that the U.S. government only incidentally is a government by, of and for the populace; as a Rutgers study confirmed: it is a government by, of and for the wealthy and monied special interests.
12
@JimPB Nonetheless, it is a government elected by the people. What is your plan to have our government elected in some other way?
Trump wasn't elected by the people. He lost the popular vote by almost three million votes.
5
@JimPB .... where did you find the Rutgers study of govt for monied interests?
@Stanley Jones....Govt elected by the people isn't working.
The 1st step to unblock our democracy is to do what majorities of voters and many politicans want---reverse Citizens United. The reduction of legalized big money dominance would restore the influence of average citizens in our lawmaking.
Our media avoids the whole topic. Most columnists lament the affects of big money, avoiding even discussing the remedies.
3
Your case is sound, as usual, and the same tropes keep coming out but kind of like the weather, no one does anything about it. Rich Americans should be treated less favorably than the not-rich. Someone who has benefited so much from our capitalist system owes it back; the more rich you are the more you should pay, not only in total dollars but proportionately as well. 40,50 60, yes 70% should be their tax, the higher the income and savings, the higher the rate. They can easily afford to do so, but don’t want to - make them pay it, they’ll get used to it.
9
@Pat, top marginal tax rates were as high 90% in this country.
3
The top 1 percent pay a greater share of individual income taxes (37.3 percent) than the bottom 90 percent combined (30.5 percent). The top 1 percent of taxpayers paid a 26.9 percent individual income tax rate, which is more than seven times higher than taxpayers in the bottom 50 percent (3.7 percent).
1
Paul Krugman is incorrigible. As Daniel Patrick Moynihan pit it, he is entitled to his own opinion, but not his own facts.
Here is Krugman on the subject of workers' wages: "Opportunity zones aren’t the only part of the 2017 tax cut that is notably failing to deliver; remember how slashing corporate tax rates was going to lead to a surge in ordinary workers’ wages?"
This is what I read in July: "Wages for U.S. workers grew 4.0 percent over the last year, increasing the average wage level by $1.09 to $28.54 an hour, according to the ADP Research Institute [Report (WVR)] released today. The growth [accelerated] from 3.8 percent to 4.0 percent annual as of June 2019." That is the biggest increase in 10 years.
Do I have to remind Krugman that unemployment is a 50 year low?
That is not to say that Krugman may not be right about infrastructure and other things. But how can I trust him when he doesn't get the simple things right?
7
@Ian Maitland
The "average" wage statistic is undoubtably skewed rightward, like "average income" or "average net worth," by a small number of high-wage-earners to whom wage growth has further accrued. A more useful figure would be changes in the "median" wage — preferably accompanied by a description of the wage distribution curve.
As for unemployment being at a 50-year-low, you might want to consider that there is a not-insignificant number of people who have simply given up even looking for work. They're "too old," for example, and think of themselves as washed-up at the age of 55. Or their employer has shut down the factory or office and moved operations elsewhere (FBI & EPA moving from Washington, DC to the deep south or midwest, anyone?) Such people exist, and they're not all headed to opioid-related deaths that will be reported in small type, if at all, on page A23.
11
@Ian Maitland
I often wonder about the unemployment rate. One of the things I wonder is whether lots of jobs are being landed because practically no one in the lower income bracket can make a living on just one job.
Heck, I'm not in the lower income bracket, as a public employee. But even I have two side gigs, and live paycheck to paycheck. Not complaining, just saying.
13
@Ian Maitland thank you. What I see PK do most often is take a very selective statistic which, by itself, fits the progressive narrative. But taken in concert with other statistics or facts, it just doesn’t sell well to the progressive crowd. He needs to be called out for this a lot more because one can clearly see the economic literacy of commenters on this string is quite low.
5
Mr. Krugman, I've been reading your commentary for a long time.
This is not the first column I have read by you that points out the corrupt nature of tax legislation, the dishonest rhetoric about helping the poor that legislators employ, and the windfalls that such legislation provides for the corporations and individuals who finance political campaigns and, as you say, employ the lobbyists who write the legislation themselves.
Since our partisan courts declared money to be speech and corporations to be persons, the corruption has been made almost legal.
You rightly point out that the Republican party is the arrogant malefactor here, the architect of this corruption. I would like to point out that the Democratic party, which gains from the transfer of wealth from the poor to the rich just as much as Republicans do, is also guilty for sitting on their hands watching the travesty unfold.
Our dysfunctional government has lost the respect and trust of more than a few Americans. It's a shame on Americans that we do not have the backbone that Hong Kong citizens are showing in recent weeks.
438
@William Romp
Not one Democratic Senator voted for the reactionary Republican 2017 Tax Obscenity. Not one Democratic Representative voted for it. NOT ONE. So no, the Democratic party did not sit on their hands watching this travesty unfold. Even Manchin III, who disgraced himself by voting for both Gorsuch and Kavanaugh for the Supreme Court. This was purely the Republican party + Trump.
I am not here to argue that the Democrats are saints or that campaign money never influences their voting. But this article is specifically about a provision in the reactionary Republican 2017 Tax Obscenity.
121
@William Romp
You have echoed my thoughts exactly, in pointing out that the Democratic Party has done next to nothing in helping to right income inequality. I no longer believe in the leadership of either party, and refuse to vote again for a candidate that takes campaign contributions from corporations and the Uber rich. Fool me once...
11
@White Buffalo
"...Tax Obscenity..."
Maybe, maybe not.
In 2018, that "obscenity" reduced the personal income taxes of all families of four making $53,000 or less to zero.
That's amazing.
In the 190 plus countries around the world, such families are considered upper middle class or even rich and are subject to taxes of tens of thousands of dollars.
Despite this 14% tax cut, personal income taxes in 2018 increased by 3% over 2016.
That implies a growth rate of over 7%.
That's amazing.
That means the "rich" (successful small businesses creating that record 3.1 million full time jobs in 2018) had to be paying more, a lot more, in taxes in 2018.
Maybe not so obscene.
Maybe perfect policy, a thing of beauty, art in practice.
Here’s how DJT is re-elected, perhaps:
The GOP’s dilemma by way of the pot
situation is: break the progressive younger
adults away by facilitating the US Federal
laws re cannabis and marijuana such as liberalizing paralyzing banking laws.
But won’t the GOP lose their strong religion voters?
The question is how many progressives
switch to the GOP, and how many religious oriented
people can the GOP afford to lose.
There is no limit of political issues, but I guess
pot shall be one of the hottest.
Joe, Liz, Bernie and Company shall probably
have to confront the issue too!
Save me some popcorn for the show over
the next thirteen months
Another issue is who wins Miss America,
if there is still an Atlantic City exciting
contest, but I miss Bert Parks, my
mother knew his mom.
I doubt that progressives will switch to the GOP because of a sudden change of heart on pot. Not when they can vote for actual progressives who will do the same thing.
To my mind, funding infrastructure projects via targeted tax breaks is inefficient. The government loses significant tax revenue, and also loses control over how the project proceeds.
The "opportunity zone" tax break is an excellent example. The government in essence gave away lots of money, and got projects which would have been built anyway in return - projects which benefit only the wealthy built at what works to taxpayer expense. (The lost tax revenue means further cuts to programs helping the 99%.)
For those touting the efficiency of private enterprise versus public entities, please remember that the Dilbert comic strip is written about how privately-run companies are run. I'd much rather pay $100/year more in taxes than pay $1,000/year to a private company with monopoly power.
705
@John M Plus, with public entities there is at least the possibility of voting poor performers out of office and replacing them with people who want government to work for all the people.
62
@John M The reality is that America is being looted by these “investors."
80
@John M
Also important is that the public loses ownership of its essential infrastructure.
64
Republicans entire goal, the last 50 years, has been to transfer wealth from the working class and middle class people of the country to the very wealthy. Analysis of income and wealth data over this period shows the resulting trend clearly. Everything they have done has been focused towards this goal. The endless erosion of unions, at the state and federal legislation level. The packing of the federal courts with judges strongly pro-business. The easing of environmental regulations. The transfer of hundreds of billions for defense contracting in the conduct of two wars of choice. The continual efforts to cut taxes, with every Republican president seeking their signature "Tax Reform" that somehow focuses 85% or more of its benefits onto the top 1% and 0.01%, and lets the rest "trickle down" (when? never.) to 'the rest of us'. Republicans as a party are corrupt through and through, and they have been bought, owned, and controlled by the 1%, at the state and federal level, for decades. The only way to clean this up is to vote them -all- out, at all levels.
35
@Jim Brokaw I agree completely and also vote out the Democrats in office now who often vote for Republican bills and have the same large donors as the Republicans.
5
You can encourage these developments, but you can't force people to purchase these kinds of properties when the economy puncturing effects of bad trade policy come home to roost. Though perhaps Trump's relatives will also make money on the REITs that hedge downturns. Guess it works well for casinos.
1
I’m probably the only bona fide business owner on here - responding to the constant criticism that the tax breaks benefit a small sliver of individuals.
My QBID last year (the amount I’m allowed to deduct under the new tax law) was $655,000. That money doesn’t disappear into my bank account. I hired two employees, bought about $50k in capital equipment and increased our company travel budget.
In other words it gets spent and re-deployed back into the economy. I have no political axe to grind here. I’m fairly middle of the road - but I can’t tolerate the constant drumbeat that the rich benefitted at the expense of everyone else. Some of us use that money to grow our businesses.
8
@Jason And I read reports, news reports, that the 1% got tax cuts during the Bush/Cheney Middle-East wars, two of the most expensive wars in American history, & the first time in American history this happened. I read reports that the rich donor class can buy Congressional votes. I read reports that proved “Trickle Down” was a fake, a fraud, and ex-GOPs like me had finally figured it out.
It seems the 2017 Tax Cut Bill helped 90% of taxpayers by giving the 1% richest of those helped 99% and the 99% lowest of those helped 1%.
We could bring back the Progressive Income Tax or we could play Monopoly during our trip to becoming another 3rd rate banana republic.
7
@Jason I’m responding to my own comment because of the vitriol that I see in response to it. I’m trying to offer real life perspective to you. I benefitted greatly from the tax breaks. I am a 1%er. That I admit.
My only point to you is that I don’t put the benefits of that tax break in my pocket. I spend them. On people, equipment, travel, etc.
That you’re angry about Trump I understand. I don’t blame you. But don’t be angry at someone who just offers an honest opinion which may differ from yours.
2
@Jason
No doubt your decision to invest the tax deduction was because of the future profits to be earned from it. With interest rates so low, you probably could have borrowed the money and still made this a profitable investment.
Instead, effectively, the government has borrowed the money for you at a cost to other taxpayers (the money for the tax cuts was borrowed).
From what I have read in the NYT and elsewhere, the expected surge in investment due to the tax cuts has not occurred. So perhaps you are one of the few that have invested and benefited the economy. Or perhaps it's only the big players who haven't invested, giving the appearance that few employers have.
In the end, it's the overall effect of the tax cuts that matter, and it seems overall, that the promised surge in investment and the increase in income tax revenue has not occurred. Of course, one wonders whether the stated expectations were real or just a ruse to justify tax cuts for the wealthy.
2
It's not really very complicated.
Tax the Rich. That's where the money is.
20
And that’s how America developed the economy to create a big middle class.
Reagan’s Tax led to a lot of disaffected voters, but it led to MSGA.
We need a Democratic President and Congress to conduct broad criminal and legislative investigations to bring to light how the President, his cronies, and his family members bilked the American taxpayers of hundreds of millions of dollars and lined their pockets with foreign funds during the Trump presidency.
44
@Didier My guess is that if we get a Democratic President next time he or she will pardon everyone in the Trump administration in the name of unity. I hope I’m wrong but if Trump is voted out he’ll be stoking as much civil unrest as he can and the new president will try to quell the unrest by letting the rats go. The Trump swamp should be rounded up and sent to jail but it’s just not going to happen. And the violence from his supporters is going to happen anyway.
9
@Didier
If only. NO ONE went to jail for activities that led to the 2008 "recession." And possibly the cure was almost as bad as the disease: basically, the taxpayers bailed the rich BANKSTERS out.
17
Basically, the voters need to take the system back from both parties.
It is totally rigged by the two parties in cahoots with big donors.
If the country desires to have an efficient system, with no corruption, we have enough computing power to find several alternative optimal solutions, under appropriate constraints defined by the will of the voters. It might be a better alternative to corrupt politicians holding the whole system hostage.
However, one down side is that GDP may suffer and the unemployment may go up, because lobbying, and corruption expenditures will be eliminated. Upside will be that cost of almost every product will go down, ultimately benefiting common consumer.
I know that this is not achievable, given so many rich stake holder, donors who like to control the system.
I would like to see Dr. Krugman do a more definitive piece on US vs OECD tax income as a precent of GDP with accompanying explanations of the details.
When one looks at the numbers, to me they are astounding. The US is in the lowest decile of total taxes as a percent of GDP, even if you adjust for differences such as universal health care. Corporate taxes are at an all time low.
Yet, the Republican propaganda machine has convinced the average American that their taxes are low. This is the primary reason the US is literally falling apart. Gas taxes are a great example of this crazy policy. They have not increased since the 1990s when CAFE milage standards were much lower and there were no hybrid or electric cars. Yet our bridges and freeways are crumbling. China can build intercity high speed rail. We can't even fix a bridge.
Oh, wait, I forgot. Remember, Jesus' dying words according to evangelicals was: "Oh Father, give me low taxes and limited gummint"
86
@Mike
I'm not sure, but did you mean "that their taxes are HIGH."? Because I don't think anyone thinks their taxes are low, because, as you point out, they have no idea what everyone else in the world pays
8
@kgj
Yes I meant our taxes are low as a percent of GDP. Saw typo after I submitted.
9
@KGJ: Sir,I would counter,anyone with internet,living in OECD could easily download that information from government web sites.
1
Thank you for yet another insightful column. What we need you to do is to write down what you just said in terms suitable for campaign speeches and campaign ads. Ask your coworkers at NYT for help on language suitable for those more broad audiences. Democratic candidates need the help to explain just how awful the Republican financial policies have been and continue to be.
23
This story, like many the Times does exposing the corruption, incompetence, coddling of the wealthy and general meanness of the Trump administration, is exhausting, but necessary. It will not be read or understood by the typical Trump voter, nor would it change his/her mind even if it was explained to them. But it’s important to keep doing them to keep Republicans on notice that the rest of us are still watching their amoral behavior, and haven’t given up. We will not stay home on Election Day.
32
It's no surprise that the last time Republicans approved legislation for public funding (CHIP) was more than 20 years ago. It is plain that for more than a generation now, Republican voters don't want to fund programs for the public good, even when they, themselves might be helped by these programs.
The old saw about voting one's pocketbook simply hasn't been true for Republicans for nearly a quarter century now. Case in point - their hostility to Obamacare, or any national programs designed to expand access to affordable health care. The last thing that Trump voters care about is whether they have benefited from his tax cut (although only 1% of them have).
Nearly three years on in the most horrific presidency in my lifetime (and I remember presidents back to Eisenhower), Trump's voters remain in lockstep with him, although he has done nothing to help his struggling base.
Why? Put simply, Trump voters don't care that they cannot afford higher education or good healthcare. They don't care that there aren't meaningful job retraining programs for them. They don't care that medical treatment for one of their sick children will bankrupt them.
Trump's voters' interest is race, and only race. As long as he tells them that as whites, they are the only "real" Americans, they will stand in soup lines for this man. Trump voters have gotten exactly what they want from Trump - a president who tells them that they are the only "true" Americans. This is all they've ever wanted.
9
It's not that the Republican Party simply doesn't care about the poor or about economic fairness or about encouraging development that actually benefits all Americans.
The GOP actively despises anybody outside their gated bubbles. Republican officials and the narrow population of constituents they really serve rarely step outside these gilded bubble. Beyond them, it smells funny; folks with darker skin lurk dangerously, funny accents and foreign languages abound.
Horrors! Give me a home-grown mass murderer any day.
Dr. Krugman mentions the "Children’s Health Insurance Program, which was, by the way, highly successful." Yes it was. So was Head Start. But these programs have been systematically drowned in their bathtubs by the GOP and its polemicists.
The only thing more offensive to a Republican than public spending is public spending on programs that succeed. As Dr. Krugman aptly opined in another column several years ago, "A citizenry that thinks government is always bad will always have bad government."
David Koch might be dead but his venom lives on.
9
Guess the "opportunity zone" is aptly named, in that its an opportunity to shelter income and avoid taxes.
At some point, doesn't somebody somewhere have to pay taxes?
10
Sure, that’s what the middle class is for.
This type of corruption isn't confined to politics at the national level. Here in the so-called progressive wonderland of Portland, Oregon, political corruption is bi-partisan. It's like the Wild West, according to my barber, whose clients include many of the developers involved in large scale real estate projects that are rapidly and permanently destroying the city's livability. You'd think a state like Oregon would have environmental protection laws in place, similar to the California Environmental Quality Act (CEQA), that gives citizens a fighting chance to shut down corrupt deal making. But no such law exists.
1
I sure hope to see Trump brought to justice for all of the damage that he is doing to the country on every level, damage that is just meant to bring more wealth to himself and his friends.
5
Don’t hold your breath
Doesn't matter. Even if Republican voter know this and concur, they will still vote Republican.
3
Republicans appear bloodless, heartless, and selfish when they're in control, but wait till they're out of power. They'll be crying like, well, I was going to say babies, but it's more like spoiled rich kids once things don't go their way.
Anyway, it's important to remember the Party has zero credibility on deficits and the debt, on the environment (rampant global warming), on public safety (guns and opioids), on homeland security (Russia), on protecting a free press ('enemies of the people'), and on democracy (voter suppression, disenfranchisement, and now, legal gerrymandering).
If our SCOTUS sanctions Trump's fake national emergency at the border, the howls will be deafening once a Democratic president takes office in 2021.
Republicans actually loathe the republic they're supposed to serve. They are trying, very diligently, to abdicate the federal government's role in everything but military spending. They can't wait to attack social security and Medicare. They have tried to decimate the Affordable Care Act. Infrastructure is a private enterprise. To them, "republic" means "let the states decide what to do." If they succeed in collapsing our republic, it will be important to live in a state that cares for its citizens.
5
"Things like this are inevitable when one of our two major political parties has basically turned its back on the very idea of productive public spending."
It's called "milking the cow". And taking millions while condemning the giving of nickels and dimes to help "those" poor people is called hypocricy.
1
How in the world does trump get his 38% solid support? Most of his adherents got hit by his so-called tax reform bill big time. He declares repeatedly that he and his spawn didn't benefit from this bill. This is utter brazen lying. What has occurred is the most massive transfer of wealth from the middle class to the wealthy in US history! By 2027 those earning annually $40-50,000 collectively will pay a total of $5.3 trillion MORE in taxes. While those earning more than a million annually will collectively pay a total of $5.7 trillion LESS in taxes. These are numbers certified by both the CB and the Joint Committee on Taxation. This is so outrageous that people should be up in arms.
8
"In reality the tax break has been used to support high-end hotels and apartment buildings, warehouses that employ hardly any people and so on. And it has made a handful of wealthy, well-connected investors — including the family of Jared Kushner, Donald Trump’s son-in-law — even wealthier."
Well gee. Surprise, surprise. Trump signs dubious law, Trump family benefits bigtime
3
There is nothing ore conservative than upkeep on what you own and need to use regularly.
That being said, there are no conservatives in the GOP
1
Of the 1%, For the 1%, By the 1%.
6
@Valerie Wells -- One thing is very clear - We have:
The Best Government Money Can Buy.
1
Not being a Genius I think what the Republican Leadership is doing is make corruption a legal thing.
2
Why even bother talking about Trump, McConnell and the rest of the GOP predictable crooks. Why not direct attention to the fuel that propels the legislative inequities and continues to stuff the coffers of the heavy hitters - the real players, the lobbyists. As long as some of these shadowy people exist and line the pockets of our legislators, then the status quo shall prevail. Look at the Koch brothers as exemplars herein. Infrastructure? Bad joke just like the promise that Mexico will pay for the great wall of Trump or other specious rants about our wonderful economy - but don't forget to exclude the national debit.
1
"Why not just borrow some money and get to work on those bridges?". Because we're already have more debt as a percentage of GDP than any time since the end of WWII? Because that debt makes us vulnerable to external actors who could use it to crush us? I don't even need a four key calculator to say that every 1% rise in interest rates cost me and my fellow taxpaying Americans an extra $22,000,000,000 per year. The elites don't care, they are mobile. The poor don't care because only federal income taxes (and tarrifs) are used to make debt payments, and the bottom 50% of taxpayers only pay 3% of that burden (1)(2).
This has been and is the part of the economic cycle where we were supposed to be paying down the debt, not piling on more. Full employment, rising wages ... not the right time for low interest rates *and* deficit spending. The only explanation, other than assuming a sudden and universal drop in national IQs, is that political emotions have risen to a point where the who we love or hate now overwhelms decades of hard won wisdom, data, logic, and experience.
Cutting taxes the way Congress did in 2017 was evil and stupid. Increasing public works now would be naive and stupid. We need to reboot this whole process.
1) https://taxfoundation.org/summary-federal-income-tax-data-2017/
2) https://www.bloomberg.com/news/articles/2018-10-14/top-3-of-u-s-taxpayers-paid-majority-of-income-taxes-in-2016
1
You are wrong that the poor don’t care. They just don’t have the resources to do much about it. Too busy trying to survive.
@Smilodon,
Perhaps ... on a case-by-case basis.
TheRepublican plan is always to loot the country whenever they get the chance.
It’s a business.
Their secret has always been carefully hidden in plain sight.
4
The more recent Republican measure was W.'s free prescription addition to Medicare which the Democrats naturally voted against and Obama cut. Then Obama wanted to raise the age of Medicare to 67.
There is a reason that the white working class is 2-1 Republican and the red states are the poor ones and the blue ones are the rich states.
Well, we will see in November 2020 if the rich suburbanites who read the NYT are going to vote for a rise in the corporation tax and a major drop in the stock market.
2
Republicans like infrastructure...as long it enlarges the hidden tunnels into 0.1% bank accounts.
Unfortunately, too many Americans are too functionally illiterate or propagandized by 'God', guns and fear and loathing to realize that the great national 0.1% train robbery occurs mostly by tax dodging, evading and 0.1% tax welfare.
The main reason Trump won't release his tax returns is because he doesn't want people to know that he's spent his entire career dodging, evading and shirking taxes for a living.
Trump gained at least $885 million in NYC tax breaks, grants and other subsidies for luxury apartments, hotels and office buildings in New York, according to city tax, housing and finance records.
“Donald Trump is probably worse than any other developer in his relentless pursuit of every single dime of taxpayer subsidies he can get his paws on” said Alicia Glen, Bill de Blasio’s deputy mayor for housing and economic development, who first battled Trump when she worked in Giuliani’s administration.
The 2017 Trump-GOP 0.1% Welfare Act, frosted with lots of 0.1% welfare for the Trump family and other 0.1% welfare queens, is the perfect personification of the Greed Over People party.
If you want to know why the USA is an international disgrace in healthcare, infrastructure, mass transit, public education, college costs, campaign finance corruption and sham elections, it's because Republicans prefer that billionaires flourish while society rots.
Nice GOPeople.
Nov 3, 2020
175
@Socrates
"[A]n international disgrace in healthcare, infrastructure, mass transit, public education, college costs, campaign finance corruption and sham elections." Sounds like a failed state. Can't say that I disagree.
3
The foremost public intellectual of the English speaking world in 1776 was Dr Samuel Johnson. Dr Johnson not only gave us a dictionary with which we wrote the founding documents he gave us the methodology to understand literature and philosophical thought that allowed us to understand context.
Dr Johnson was a conservative and gave us the social contract translated into an English that Rousseau who was still living had introduced into Western civilization.
Dr Johnson's letter to the American Congress titled Taxation no Tyranny described the social contract of the English speaking world. It laid forth the both diversity and understandings constituting obligation of citizens to their government and the obligation of government to the people. For many of us it is the most important document of the American Revolution and is basic in understanding the basis of not only Canadian and all liberal democracies but an understanding of what America brought into the development of we call democracy.
The GOP has torn asunder that social contract and created the neoliberalism threatening to destroy the fundamentals of responsible government. This is what I believe is responsible for the polarization of America and the reason I think the GOP is responsible for the breakdown of trust throughout the world.
Taxation is the price we were willing to pay for the development of our society and its pre-eminence in creating most of what made America great.
https://www.samueljohnson.com/tnt.html
3
The greatest "tax break heist" in history was the Reagan tax rate cut for the wealthy. Pre-Reagan tax rates protected the country for decades, by recirculating money throughout the economy. Reagan set the stage for income inequality and other economic ills the country is currently experiencing, and politicians of both parties have been following up with corollary tax break heists ever since.
8
@RC
"Pre-Reagan tax rates protected the country...."
Following the Kennedy tax rate cuts, the economy grew 6.5% in 65 and 6.6% in 66.
Following the huge Johnson tax increase, the economy grew 0% in 1970.
As inflation further increased tax rates by pushing people into higher and higher tax rates, real median personal income dropped every single year during the Carter presidency.
After the Reagan tax cuts, real median personal income increased 38% from 1981 to 2000. Didn't happen in high tax Europe. Not only did Europe's higher taxes not protect anyone, their job growth was 30% slower than U.S. job growth. Can you imagine the U.S. with 30 million fewer jobs? Obama created 10.6 million jobs. Not only that but what few jobs Europe did create had fewer $/hour and fewer hours/week.
No, those pre-Reagan tax rates didn't protect anyone.
This opinion column is correctly describing the Republican strategy for what it is:
The Art of the Con”
Unfortunately, they have been getting away with it for forty years and counting.
17
2017 Tax Cut is a done deal. The damage has already been done. Even though many tax loopholes exist, but they will not be the last. Just make sure that we elect the right person such as Elizabeth Warren or Joe Biden the next time.
5
Joe Biden isn’t going to do what’s needed. He’ll just tweak around the edges, too afraid to actually make big enough changes to actually do some good.
Is it really a surprise to anyone that a provision of the 2017 tax cut intended to help "struggling urban workers" with affordable housing would be used instead to help wealthy people like Jared Kushner become even richer? That's what the Trump brand and today's Republican party are all about. The Trump administration is arguably the most corrupt and dishonest ever. The only remedy is for Democrats to retain control of the House and take control of the Senate and the Presidency. Only then can we even have hope that integrity and honesty will be restored to our government.
5
Unquenchable greed seems to be a constant theme for what needs to be changed.
11
The Trump tax cuts were very good for Americans. Almost all Americans paid a lower tax rate; and middle income Americans saved $1-2K in taxes. Those with children under 17 got an extra $1K credit on their taxes owed. More of the credits were refundable. And the AMT threshold was raised significantly, so many who were paying the AMT saved thousands as well.
You can focus on the rich but there is no denying that middle America did better. Considering the average real property taxes in the US are under $4K, the SALT cap didn't effect them.
4
@AACNY
Is that why the wealth gap keeps widening.
I’m sure the “trickle down” will fix everything though.
7
@AACNY
"You can focus on the rich but there is no denying that middle America did better."
So, in your view the thousandaires did better than the millionaires?
5
@Grove And the tax relief will also trickle away when the payment for tariffs at the point of purchase is due.
1
I vividly recall how thrilled one woman was that her great trump tax cut would cover her annual Costco membership. I wonder how thrilled she would be if she knew that the Chinese-made goods she buys at Costco will now cost her an average of $460 more per year, thanks to the great trump trade-war tariffs.
39
@Drusilla Hawke
She'll probably be OK with it as she, like millions of other Americans, understand it was long past time to address the China issue.
1
In other words...tax breaks are helpful "on both sides"
2
@400 Lb Guy The very rich ones.
The Opportunity Zone tax breaks are simply a way for the ultra wealthy to privatize assets and shift much of the costs to the public fisc.
I have said a long time ago that Trump was out to privatize, or outsource, as much of the annual Federal budget expenditures as possible.
When the Feds outsource, the contracts usually allow the contractor to tack on a profit of about 3% above the contract costs.
Privatizing $4 Trillion would generate about $120 Billion in pure profit.
If the contractor owns the property that is used to perform the work, such as office space, and rents that to the government as part of the contract as well, the "take" goes up.
4
@Joe From Boston
Both democrats and republicans love opportunity zones. It's a favorite of most politicians because they can compete with other states for investment.
1
@AACNY
"compete with other states for investment"?
More like "compete with other states to give away tax dollars."
Many tax "abatements" are losers for the communities that give them. Public spending for athletic stadiums are a prime examples.
The examples described in this article are also very good examples of federal tax abatements that principally help the ultra wealthy.
Politics is about redistribution by definition, as to a royal court or to finance the king's wars of glory (e.g. Louis XIV) from general tax payers in a monarchy. From the time of the Great Depression and the New Deal, there was redistribution from the very rich to the middle-class and poor, including unionized labor. The Great Counter-Revolution in America has been all about overturning progressive achievements and reverting to an oligarchy, even starker in the divide between the few very rich and the rest of the country. The Republican Party is the political engine to achieve this reverse redistribution, from the poor and middle-class to the very rich. It's literally about taking bread from the mouths of widows and babies - or taking away their food stamps and access to health care, which is the same thing.
17
Republicans took advantage of having Trump and McCONNELL in power to ram thru a tax cut bill favoring the rich real estate folks like Trump, Kushner and their cronies . Concern for infrastructure was just lip service while most in the know knew that this tax cut bill was for payback to the donor class with a sweetner in the bill sure to please Trump/Kushner the ruling regime. Airports and infrastructure around the world are in much better shape than our but our GOP govt is most interested in taking care of the 1% their paymasters and now rulers.
12
@REBCO
"Concern for infrastructure was just lip service"
No.
Like in most elections, It was Trump's and Republicans' con to get votes to win which they did, big time.
12
This program is a win-win … for the rich.
They get tax breaks now and in the future. And they build luxury apartments to advance the gentrification of the neighborhoods.
And it is a lose all around for the 99.9%.
26
@John Graybeard
Yes.
The tax “breaks” (crumbs) have an expiration date.
Another clever ruse.
5
Funny how that works that the tax cuts for ordinary folks have an expiration date but the ones that benefit the very wealthy don’t.
I draw the conclusion that the Republican party is duplicitous. They present as conservative when they are in fact libertarian.
They are owned by and respond to a relative handful of individuals. It disappoints me beyond measure that millions of voters think the Republicans act in their interest, or at the very least oppose Democrats who act against their interest when the logical and obvious interpretation is the opposite.
Who's more to blame, the scammers or the scammed, the duplicitous or the duped? We live in a system navigated by a constellation of bad ideas that will fade from history long before the damage done. The Republican world view built upon the Reagan revolution is not sustainable. Voters will come around, at least when all the stubborn old white guy voters die out, but the wealth disparity created will live for generations.
20
@larkspur The libertarian fifth column infiltration of the republican party is the root of the problem in our country. It's gratifying to read at least one other person in the world recognizes that fact and understands its significance. As a progressive I could still have a productive discussion with traditional Burkean-based conservatives. Libertarian ideology and those who implement it are a NeoFeudalist scourge.
9
Millions of Americans are more concerned about their well-being and that of their family than whether the rich get richer. The rich always get richer, regardless of the party in power. A good job, affordable healthcare, a good school system, a safe community are the priorities of millions of people, and the party they think can provide these essentials will get their vote.
7
@LNF1 Which brings us back to the column. The Republicans invariably harm the economy, oppose making healthcare affordable, oppose funding public education, and oppose programs that have been proven to reduce crime because they are opposed to the very concept of the public good.
32
@LNF1 - It would be a lot easier to achieve the latter if the rich would pay their fair share of taxes.
21
@Randy Agree, but the "Grand old Party" will continue to argue they are for the public good which must see less government involvement so therefore less government spending ... hence must cut social programs that benefit the public as public should be able to prioritize their own choices ... ignoring the fact public has no "savings" to make those choices !
7
a reader commented that FDR told labor that if they wanted protections etc., they had to demand it. they held many strikes and forced congress' hand. we must do the same to keep our democracy from failing on a number of fronts. we need to take to the streets like those in Hong Kong. nothing -gun control, health care, protecting the EPA...., will change unless we get to the streets.
17
@L'historien
Power gives up nothing without a fight.
WE can't win, if we don't fight.
Best wishes to Hong Kong.
Btw, where is our president in condemning China on this? I'm guessing he's with the Authoritarians on this one.
I'm glad we outnumber them
by about a million-to-one.
Is it almost time to take a stand?
13
@L'historien It's looking that way. We have a shot at using the levers of our barely in tact system to elect a president who will genuinely fight to turn the libertarian tide of greed and profit as the only approach to all issues. And will fight to end systemic political corruption. Not to put too fine a point on it, that means Warren or Sanders. All the others support rule by the financial elite in abdicating any real stance against corruption. Electing them will not turn the tide that needs turning.
Absent that result, I fear massive protests and far, far more violence are in our near future before the spigot at Fox "News" et al of hate and self destruction among the poor is turned off. Government resulting from convulsive violent revolution often ends badly. Our own first crack at it notwithstanding. (but that was different)
4
Shouldn’t there be stipulations in place forcing these projects to benefit the common good? It’s like, Lord we don’t need another luxury hotel. And to the Dionne Warwick song, oh listen Lord if you want to know — we need decent wages, affordable homes, healthcare, and childcare - our working families are so tired and under siege.
21
@rebecca1048
That is called communism..forcing projects to benefit the common good. Realistically, do you think anybody is going to do a project unless it benefits them first? These people can go to Europe Asia and Africa and do any project that they want to do without much interference. And make money at the same time. If you take away the profit angle, the project goes bye-bye. If this happens too often we will have no economy left whatsoever.The careful of what you wish for.
3
@Unhappy JD
Rebecca1048 may have a point. If these private enterprises are receiving government subsidies, maybe they should have to build projects that benefit the public good. What could be considered communist is the tax-payer sending their money to a centralized government to benefit only the 1%.
FDR was no communist (even though Republicans believed that he was). He took the public's money and used it for the public good, which helped put Capitalism on a firm and democratic economic foundation.
13
@Unhappy JD
I don’t know how such would be considered communism? I don’t care what they invest in, but if they want tax advantages from our common kiddy, then it should directly benefit the common good, also.
2
Not one mention of Jack Kemp, his enlightened and compassionate conservatism, his dedication to the underprivileged, and his hands-on experience with opportunity zones.
5
@Mike Pod
Ah yes. The lone virtuous Republican of the past 20 years.
Was there a reason to mention him?
Republicans give away massive amounts of public tax money away to the 1%, which is money that can be used for your children's education, healthcare and future infrastructure. America's billionaire class is stealing money from children. Why are Americans satisfied with poor children subsidizing the mega-rich?
Didn't the French fight a revolution in 1789 against these practices?
72
@Uptown Guy
Because without the mega rich who put their capital in banks who in turn lend the money out for small projects undertaken by poor schnooks like us, there would be no tax economy and no taxes.
2
@Unhappy JD So we've been told by Republicans over the past 40 years as our infrastructure has crumbled, inequality has grown, and we've dealt with the biggest economic catastrophe since the great depression.
25
@Unhappy JD. Things were better in the past when taxes were higher. Also, if what you say is true, why haven’t they helped the “shnooks” with their new wealth from the big tax cut? Further, look at high low taxes ruined Kansas.
19
As a CPA I was asked by a client to research opportunity zones with a view to creating a manufacturing business. I found no opportunity zone funds that were investing in manufacturing businesses. Instead, I found real estate projects aimed at building high end housing priced well beyond the means of residents of opportunity zones. Yes, they might have created some jobs in the short term, but that is all the benefit that would realized by the people this law was supposedly intended to help.
High end investors are already familiar with tax deferred exchanges (called 1031 exchanges). However, you can only exchange "like-kind" assets and certainly not securities. Now we have 1031 exchanges for stock. Hold the investment in the opportunity fund for 10 years and you gain is zero. The 1031 exchange is only a deferral. This is a permanent elimination of gain.
The interesting thing about opportunity funds is that there is no case law and precious few regulations. How will the IRS treat these funds down the line? There is no way to know at present. I predict that there will be audits and these audits will find widespread abuse.
I've been in the tax business for 42 years full time and 50 years in total. One thing I've learned is that making economic policy with tax law is a failure. The road is littered with failed ideas. Yet, every day is a new day. Trump has brought out some oldies but goodies (if you're wealthy) and a few new outrages like the opportunity zone.
67
@John Kendall
I left tax practice when I could not stand the cynicism and institutionalized grifting anymore. I took a position as CFO for a medium sized firm that actually did something. What a relief.
24
@John Kendall
As an attorney who also works with clients. I wonder what areas of the country you looked at.
3
When the economy falls into a GOP-induced recession -- and it will, soon -- Democratic spending on infrastructure will help get us out of it. We might consider that a silver lining.
Hopefully, young people have realized the near-terminal mistake they made in 2016 and will turn out in droves against Trump and his Republicans in next year's election. And China is surely sick of Trump's trade antics and will also work to oust him. When the Chinese help tank the global economy, many other US voters will come out in favor of Democrats.
November 2020 will prove to be our true "opportunity zone."
21
@Blue Moon This is nonsense. Krugman criticized Obama for rejecting a fiscal stimulus, and Trump's huge deficit is Krugman's fiscal stimulus. So elect a Democrat and get a effort to reduce the deficit---which will indeed produce a recession if the public is foolish enough to elect the right-wing New Democrats like Krugman.
@Jerry Hough
I'm not sure what you mean by "nonsense." Trump's "huge deficit" is largely due to the tax cuts for corporations and the wealthy which have not stimulated the economy (because "trickle down" does not work). Democrats should work to reduce the deficit -- that's what should be done *now* during "good times" -- and they can also spend on much-needed infrastructure (e.g., for green energy, among other things, such as bridges and roads) ... by eliminating the worthless Trump tax cuts. All Trump and his GOP enablers are doing is taking tax money that should be used for the public welfare and dumping it into the hands of the rich (who don't need it and just store it away, not injecting it back into the economy in beneficial ways). The 99% are being run off the cliff, and the country is being run into the ground.
1
I'm familiar with one of the "opportunity zone" projects that Paul references... an apartment complex in Tempe, AZ. While it actually should be of benefit in terms of adding to the needed housing stock without gentrifying a moderate income area, it adds very little in terms of jobs: some maintenance people, rental agents and a bit of office staff. Construction jobs? There certainly is no shorted of those jobs here in the Phoenix area.
What IS most striking to me is that I have no doubt that this project would have happened tax break or no tax break, for it is a veritable cookie cutter of two (at least) other buildings erected by the same developer over the last couple of years.
Same apartment breakdown, similar pricing for the apartments, and similar target markets (ASU students and recent grads).
The only thing that has changed is that well connected investors got a tax break windfall at public expense.
32
@ImagineMoments
Big difference is that in order to garner the tax benefit, the people will have to put their money to work for at least 10 years to get the full benefit. In my book that is a pretty Tax holding.
1
@Unhappy JD
I truly don't understand if you are countering me, or agreeing with me. What is a "pretty tax holding"?
My entire point was that, for this project, tax incentives were entirely unnecessary to put capital to work. No two projects are exactly the same, of course, but after perusing the offer sheets to investors, title transfers, and the like, the expected ROIs are very similar... ROIs without the tax break that is.
Getting to use the "opportunity zone" exclusion is simply gravy for the investor's train.
8
All my life I have trusted my instincts to recognize the political truth. For me, the political truth begins with, "All governments operate by myth, fraud, and ultimately force." I understand the actions of Wall Street and the 1% as "the unhampered looting by finance capitalists." I stand by the belief that a strong middle class, the 70%, will make America as great as it could possibly be. Teddy Roosevelt and FDR went head to head with the criminal rich and won. Eisenhower warned us that there was a new game on Wall Street and in government: war profiteering. JFK, MLK and RFK were murdered for threatening the looters and the war profiteers. Wall Street looters and Washington DC war profiteers are not patriots. The sooner they are erased, the sooner America stands tall again.
13
That would truly make America great.
It should not be surprising at all that "a provision sold as a policy to help the poor has actually ended up being a giveaway to hedge funds and real estate developers".
After all, who is Putin's Trump and his son-in-law - a real estate developer. How could the GOP expect him to sign it if there is nothing in it for him?
15
The proprietor of the Republican Party, Charles Koch (and his army of think tanks and special interest groups), does not believe in the government acting as a positive force in the lives of ordinary citizens in any way. Koch does not believe in government backed infrastructure projects.
To be a Republican politician nowadays you have to always remember who pays the bills. They serve at Koch organization's pleasure and if they don't bow to its wants, they will be "primaried" out of a job.
There will be no infrastructure work done in America as long as Koch and the Republicans have a foothold in the US government.
16
The GOP has not had an original idea in 35 years: only cutting taxes. All the while, we have no infrastructure , no education and no vision for the future. As Bernie Sanders stated succinctly in 2016, “if people don’t pay their taxes, we don’t have a country,”
36
That’s their answer to everything. Economic boom? Cut taxes. Economic bust? Cut taxes. Space aliens invading the earth? Cut taxes!
3
The column suggests a road map for Democrats to follow after they assemble sufficient political power to write new laws:
1. Call congressional hearings for the purpose of reviewing every aspect of Jared Kushner's financial life.
2. Identify every aspect of federal policy which has afforded Kushner special benefits, unavailable to ordinary Americans.
3. Turn each such policy provision around 180 degrees. Wherever Kushner (and others like him) now get a special federal break, let them be targeted instead with a special federal obligation.
Using that tactic will provide a nearly infallible guide to reforming government fiscal policy on behalf of ordinary Americans.
18
Infrastructure improvement should have been one area in which bipartisan cooperation could achieve something important. The need is critical and undeniable. But as long as Trump and his Republican enablers continue to treat the issue mainly as another opportunity to foster privatizing public assets through tax credits to private developers, nothing gets done. I'm afraid it will take some high profile infrastructure disasters, like the collapse of a couple of major bridges with many casualties and massive disruption of travel patterns in high population areas, to finally force some action. But I hope I'm wrong.
27
Wait a second. Where is Pelosi’s and the House majority infrastructure plan? All I ever hear from them is impeach, impeach, impeach. Are these people actually doing anything besides impeach and impeach. Where are these great plans and. Pelosi?
2
@Jerry Davenport You might check Govtrack or a similar site to learn about the bills passed by the House which await action in the Senate.
3
We’ve already had bridges collapse & still nothing gets done.
I had the privilege of touring Timberline Lodge in Oregon with out of town guests this weekend. The “crown jewel” of depression era funding to build a magnificent structure using obviously talented local laborers and products shows what can be accomplished if public funds are used to give gainful employment to the unemployed public.
Where is our spirit of community? Included in the lodge is the bedroom that FDR used on his visits- so incredibly simple without a single ostentatious object other than a typewriter.
I urge everyone to support rebuilding our nation using what we have available, rather than just creating more tax schemes for the wealthy.
133
@William R. Greene, MD
Dear Doctor,
As a ski bum in the 1970s, I lived and worked at Timberline Lodge for a year. I became a student of its history, a study made easy by the small library there with every word ever written about the project.
Predictably, at the time there were right-wing opponents of the plan. Part of their opposition was that some of the jobs were going to Italian-American and Portuguese-American Catholic stone masons, and to "negroes." The rest of the opposition was of the kind you hear from the conservative right today--"I work hard for my money; why should my hard-earned tax dollars go to make-work projects for losers?"
Overwhelmingly, the plan was lauded, and it remains a shining example of the kind of practical, progressive, and worthwhile program that you describe it as. How I wish there were prospects for something similar today. Fat chance.
10
To celebrate Labor Day, I stayed at Cheaha State Park, which was largely built by the Civilian Conservation Corps during the Great Depression. There is a museum of the CCC at the park. It’s fascinating to read how young men from all over were brought together to work on conservation projects, including building stone cabins, trails, and a beautiful lodge. They learned many useful skills and gained a sense of national solidarity. I only wish we as a society could regain their spirit of practical idealism. I’ve got to say: the people who work at the park get it and they are carrying out the vision.
5
Here's an example of the economic theft being perpetrated on the average citizen of the US...and is me. My father built a shopping center in the 1950's and wrote off 15% of its rent for 30 years as depreciation. My mother inherited it and ditto, and then the same for me. What that means is that the same building was written off three times (15% every year for the past 60 years) for for tax deductions. Last year I paid only 3.9% of my gross income in large part because of an inconspicuous line on the standard 1040 that would seem irrelevant to anyone without a real estate LLC (just like Trump and me). That "line" allowed me, ( having already taken off my 15% depreciation), to take an additional 20% off my rental income. I don't think that that tax bill had anything to do with saving the average person money. It just allowed persons like myself to further enrich themselves. It was a disgrace even to me. I think it is time that others like myself come forward to explain the shenanigans to the general public. And time for the general public to become enraged.
608
@richard
Unfortunately, it’s how the rich will write the rules when they are in charge of creating them.
25
@richard thank you for sharing. Is there no time limit to how long your family can continue to take depreciation on the same asset? I agree it's time for people with a conscience to stop the personal money grab and start thinking about the common good. I know it's a lost cause, but a wise person once said those are the only ones worth fighting for.
21
@richard
I have been enraged since the reactionary Republican 2017 tax obscenity was passed.
But thank you for sharing this detail with me. I am not a tax expert so I do not know all the consequences of this legislative obscenity.
My husband complains that I waste my time reading the comments to NYT articles. But I learn a tremendous amount doing so.
63
The Great Heist is the growing over 70,000 pages of the IRS Tax Code, that gave the DT organization, and the Kushner Holdings such lucrative tax breaks because of the real estate deduction, that neither one has probably paid little if anything in taxes for two decades. When as a nation you are paying now $400 billion in annual interest on $22.5 trillion in debt, and have been spending about $1 trillion more each year than what you are taking in, in revenue, than you know, it is all big, legalized extortion, by way of lobbyists, lawyers, and the Congressional staff of Congress members who spent the needed time adding legislation to facilitate all of it.
40
@MaryKayKlassen Congress can be voted out. Newly elected people can be called or emailed and urged to repeal the Trump tax cuts. Tell them we need real infrastructure before the bridges collapse and trains that work like European and Japanese cities.
22
@MaryKayKlassen With 40,000 people killed every year by the GOP/NRA's opposition to sensible gun laws, its must be obvious by now that a few bridges collapsing here and there are not going to disturb their cocktail hour. Let's face it, the only thing that most of them care about is the health of their personal balance sheets.It is surely no co-incidence that Trump and his family and cronies rake in such a large part of tax savings and other government largess. Let's get these crooks behind bars where they belong.
4
" But it should be seen in a broader context, as a symptom of the Republican Party’s unwillingness to perform the basic functions of government."
This has been the reality of the Republican Party for decades. There is no more pretense under the guise of limited government and budget prudence.
It isn't just programs for the poor and or working folk. Every policy decision is tainted: Rollbacks of consumer protections, environmental protections, wildlife and endangered species to stealing money from FEMA;we don't even have assurance that foreign policy decisions are made without the taint of financial benefit to the one sitting in the White House. And...there isn't a single mechanism to stop this. The only one that comes close, is voting-but that isn't a guarantee.
42
Thank you, Dr. Krugman, for bringing up that recent Times story setting out the scandalous tax manipulations occurring in those oxymoronic “Opportunity Zones “, courtesy of the Republican tax cut beast of 2017. Accompanying that initial piece was one profiling how Trump-associated individuals, including Kushner, Christie, and Scaramucci, are enriching themselves from that venal legislation. In response to both stories, I beseeched this paper to continue its investigative reporting on the continuing and deep corruption, even criminality, still attending it. It would indeed be welcomed by your readership if you could do so also, in op-eds exposing the macroeconomic consequences of this plutocratic giveaway. Thanks much.
33
In reality they are trying to get as much public money as possible into the bank accounts of as many oligarchs as possible. Private developers build, paying the lowest possible wages with the stingiest benefits to workers, who ironically are from the class who are supposed to be benefiting from these opportunity zones. And then these people make too little to be able to afford to live in any of these zones.
23
It is not impossible to believe that this tax heist and the resultant exploding deficit are designed to create the conditions necessary for accomplishing what Republicans have long sought to achieve, the destruction of Social Security and Medicare.
46
@MG And the neoliberal Democrats will be more than happy to help, cf. Grand Bargain. The fleecing and ongoing destruction of the working class has been a totally bipartisan project.
@Steve Bruns
Neoliberalism is nothing more than a shift to free market capitalism. While Democrats need to protect advances for average Americans. it’s safe to say that the programs I mentioned have broad support among voters of all persuasions and tampering with them would be fought on multiple fronts.
"In fact, however, the modern G.O.P. pretends to share traditionally liberal goals, like poverty reduction or expanded health coverage."
That is diabolically clever. It rewards "the haves and have mores," as G.W. Bush called his constituency on the pretext of helping the poor. And when, inevitably, it fails to help the poor, the GOP turns around and says "See, the government trying to help the poor just doesn't work."
38
Opportunity zones for whom? Only a Republican would label a government program as something good for the poor when its true intent was for rich developers to reap a windfall.
The television program "American Greed" could have program after program highlighting the multitude of scams from the Trump years.
Remember when Trump and the Republicans tried to label his tax cut a Middle Class Tax Cut only to learn that 80 to 90% of the dollar total went to the wealthy,
This will continue into 2020 and perhaps further unless the sleeping American public shakes their dormancy and decides to put a stop to it.
28
“Beyond that, however, the opportunity-zone affair reflects the reality that Republicans are no longer willing to spend public money in the public interest.”
Something happened a while back.
It didn’t effect the republicanism of Dwight Eisenhower or Richard Nixon. But in 1980, a B-movie actor who had managed to become the governor of California was nominated by the republicans to be their candidate for president.
During that 1980 campaign, Ronald Reagan spoke these two historic sentences into the microphone before him, “Government is not the answer to our problems. Government IS the problem.”
And the Reagan Era began. The era in which the Republican Party has profoundly changed. A strong anti-governmental virulent strain infects those on the right who would govern us.
Like it or not, we are still stuck in the Reagan Era. Thirty-nine years of irrational right-wing defiance that has led us from Ron Reagan to detached-from-reality Don Trump. Thirty-nine yesrs of partisan paralysis. Federal dysfunction.
The elitist republicans have put together coalition of angry, pious, 2nd Amendment fundamentalists. They have given up on even feigning the pretense of being ethical, tolerant, fair-minded or of serving the broad mass of American voters.
It is looking more and more like eliminating the Republican Party is the key to reuniting the American people.
281
@Tom W
"Like it or not, we are still stuck in the Reagan Era. Thirty-nine years of irrational right-wing defiance that has led us from Ron Reagan to detached-from-reality Don Trump. Thirty-nine yesrs of partisan paralysis. Federal dysfunction."
Yes, and the more that the Republicans can make our government seem broken and irreparable, the more likely it is that they can claim privatizing the whole thing (at least the potential revenue-generating parts) is the only solution. It's a downward spiral with only a further-constraining ratchet effect.
34
Much of what is now the Republican leadership can't be bothered with pesky time consuming notions like utilizing government for common projects and programs that make this a better place to live. That's better left to the private sector. That way they can be sure that nothing will get done and no government funds are expended on such trifles like infrastructure.
20
The thing I like about when Democrats are in power is that my taxes actually go to things that make my life better and don't just make the rich richer.
229
@sjs
Alas, someone has to pay for all that democratic largesse. Eventually, they revolt.
1
@AACNY
We are already paying for all that Republican largesse to their fat cat donors. It is high time we revolt. Time to go back to Eisenhower tax rates.
11
@AACNY
No, the revolt will be against the predatory rich.
6
While the “opportunity zone” tax cut was a Trump scam for sleazy investors, even legitimate tax breaks, like New York City’s offer to Amazon, transfer wealth and political power from the people to corporations. Congress should end all corporate and bank tax “incentives” and collect the full business tax from all—no data has been published, but tax revenue in the trillions of dollars. Under the interstate commerce clause, Congress may ban states and cities from offering tax breaks, preventing corporations from shopping for the most desperate locality. Wisconsin’s tax break for Foxconn, the tax break for GM, my city of Oakland’s tax break for the Raiders, all demonstrate bribing corporations doesn’t buy their loyalty and prevent them from laying off workers or moving out of town. The stable, good-paying manufacturing and office jobs of the post-War period is over. Profits-over-people neo-liberal capitalism rips us off blind if we don’t fight it tooth and nail.
44
@Bruce Shigeura
What was legitimate about the gift of $3,000,000,000 to amazon?
2
@Bruce Shigeura
Don’t forget the Warriors turning their backs to Oakland in their move to SF under new management for more profit.
“Golden Rule” all over again.
2
Writing comments here is pointless. Since the elimination of the Fairness Doctrine, the concentration of media company ownership, the destruction of any business model doing the hard work of reporting, and the fusion of politics with entertainment powered based on attention grabs, the game is over.
Trump may lose the next one (although, given his severe medical disability, he should be removed), but the forces behind all of this won't stop.
What began with St Ronald reached its point of no return when McConnell broke the Constitution permanently with the Garland fiasco (or maybe that happened back in 2000 care of "‘Consideration is limited to the present
circumstances" Scallia.
106
@Eben
2000. A farcical statement that a judicial decision was not a precedent rendered juristry meaningless.
5
@Eben
Well said..trump is a temporary pathogen ,the forces that sustain and prostigate the barbary of St Ronald is indeed still alive...Koch ,Mercer etc...the good thing is that Nothing last forever...and that is the opportunity to do good for all.
4
So-called Opportunity Zones are not the exclusive product of Republicans.
On a much smaller scale, in the mid-2000s a Maine governor, a Democrat, created something called Pine Tree Zones. The idea was to create areas throughout the state where small and medium sized businesses could thrive given all kinds of tax breaks.
Local governments were to some extent compensated for lost tax revenues.
The law required that an annual accounting be given to the legislature on jobs created, jobs saved, new businesses started, etc., etc.
To this day I don't believe that a proper accounting has ever been made to the Legislature that justified or justifies such zones.
State welfare wears many faces.
6
The key is how to spend "in the public interest". Certainly, the GOP has stuck to its original plan of unleashing the private sector by cutting taxes or even helping to finance the increasingly remote upper crust of America. Since Reagan, trickle down has failed miserably, yet there is no shortage of suckers still buying it in the belief that starving the federal beast will yield noblesse oblige and benevolence. The truth is, for the filthy rich, it has always been about themselves. But Fox Nation still believes that as evil as government is, they would rather be dead than be Democrat.
But as another article has pointed out about corruption, the political system relies on donations for victory. And who do you suppose provides the bulk of the money? While Democrats don't support trickle down, their devotion to the professional and financial classes has been at the expense to labor and has done more than enough damage to American workers, including disasterous trade policies along with not adequately restraining Wall Street.
But how does a compromised political system reform itself when public service is a stepping stone to post-service enrichment?
As long as we are red or blue, the answer is: it won't. And so the insurgency must begin by taking over one party with real populism. The GOP succeeded 40 years ago by changing the dialogue and redefining issues. We must stop listening to the parties and start making demands instead. In our terms based on our needs.
3
The GOP voting to reward the wealthy at the expense of others plays like a broken record. This has been their not-so-hidden platform since Reagan cut social programs. The bar for GOP morality has gotten so low, the only option is to hold them accountable by voting out the ones who've forgotten what it means to be a Public Servant. However just voting is not enough. We must each work to get the disenfranchised involved by pointing out the policy differences and the effects of a GOP-controlled gov't. Jobs, programs, services -- we must make ithe impact tangible, relatable, and actionable. Door-knocking, it starts with you, me and Paul doing lots of door knocking. We go from there...
8
Thanks to Paul Krugman for explaining and expanding for me the Republican policy of trickle down economics in the Trump administration. I am no economist but it’s clear that this is the same-old same-old Republican ploy the party has always pulled. Everyone knows it doesn’t fulfill the objective of public spending for the public good. We are outraged but we are exhausted by this administration’s blatant disregard of the public trust they have been given and have ignored.
Color me eager to vote them all out!
58
The most important point of this article is that this is not only not atypical, it's universal. The last exception passed by Congress with Republican support, as Krugman points out, was in 1997 - over 22 years ago. And back then it was exceptional - almost everything major the Republican party supported was on the Dark Side.
12
The "opportunity zones" in the tax code are correctly named. They always meant opportunities for Trump's friends and other top one percent to make more money.
41
@PK2NY
Universal Studios in Florida is in an opportunity zone.
If the middle, working, working poor, and the poor did their job instead of complaining about them as well as the rich do their job of cutting social services and making the playing field as level as a sheer cliff, then they would be better off. If the rich can play at highway robbery and we don't do anything about it, then aren't we lucky they don't take more from us than they do? It's pure generosity and martyrdom on their parts that they don't, for sure. We have principles, of course, and we wear our crowns of martyrdom more proudly than they wear their real ones. So let's be grateful the rich let us wear ours and when they kick us in the teeth, be humble by not asking for another.
2
In Massachusetts we have a high incomes, low unemployment, and a veto proof Democrat controlled House and Senate. We had that 13 years ago when Deval Patrick took over from Romney, making the veto issue moot. The roads don’t get expanded. Public transportation breaks down all the time. Nobody can can get anywhere, any time of day, even in the summer. On Cape Cod, it’s impossible to get to Boston. You can’t even get to Boston from Boston any more. There are no Republicans to blame here. “Get me re-write!” There’s much more going on than the author realizes.
13
@Cape Cod
Massachusetts could emulate California and pass a "Road Repair and Accountability Act" known as the "Gas Tax" to begin to solve those problems. There is bad government everywhere. However, if Massachusetts wants to elect "Trump Republicans" to counter the Democrat control, then you can be sure that they would try to sell off Cape Code as an opportunity zone for Jared Kushner and friends.
17
@Cape Cod
Public transportation depends pretty much on federal subsidies. With the Koch wing in power whose mission is to destroy it, public transportation in Massachusetts like in other states that depend on this money will get worse.
We need to nationalize and expand public transportation, but it is the opposite of the goal of this administration
14
@Cape Cod
Funny, the last time I was in MA, I was thinking how well it worked and what a great place to live (thinking about moving there when I retire). Maybe the western part of the state is better run? Great Barrington was great, Lee looks like a movie set, and Lenox was just beautiful.
2
Another part of the “Great Tax Break Heist” is the new “T.T.T.” (Trump Toxic Tariffs) plan. "Tariff man Trump” tells us that the tariffs are designed to promote U.S. economic interests. In the real world however, the costs of the tariffs are borne by U.S. companies, who may further reduce American wages, and burden consumers with a highly regressive tax that targets less affluent. Trump’s tariffs are yet another one of his policies to harm American workers and the poor.
A study by the New York Fed with Princeton and Columbia Universities estimates that U.S. companies and consumers have paid $3 billion a month in additional taxes because of tariffs on Chinese goods and on aluminum and steel from around the globe, in addition to a $1.4 billion in costs to U.S. companies related to lost efficiency in 2018.
Many don’t realize that tariff man has again mislead us by not making clear that the “T.T.T." is simply another tax. Placing U.S. tariffs on Chinese produced goods for sale in the USA means that it is individual Americans, not Chinese, who end up paying this tariff/ tax. To cap that off, ironically, almost one half of all Chinese companies that produce goods for the U.S. market are American owned.
8
What other country sustains a political party that is a profound enemy of government itself?
59
The "opportunity zones" share a lot with the tired old "Keystone Opportunity Zones" program that Pennsylvania employed in the 1990s. It was a huge debacle that entailed real, regular folks kissing away their tax dollars as a bid to win the creation of new warehouse centers by rich corporations.
6
There were Democrats who also voted for the bill, and why are we hearing about these details in terms of avoiding capital gains tax just now?
OZ zones of various sorts like the 500K visa have existed for many years now. (How does this play into the OZ zones? Will all of the buildings in these zones get property tax abatements like the Hudson Yards development -- which IMO is pretty badly designed?
The Republicans have been obstructionists since Newt Gingrich, but frankly the Clintons (deregulate Wall Street, Greenspan - lower the interest rate) and Obama (Romneycare anyone? pay full fare for drugs -- that's the law, Libya and Syria) were less obviously corrupt but just as bad in terms of their treatment of the middle class and the world at large, and good old Joe Biden might be nearly as bad.
So long as oligarchic (predatory? vulture?) capitalism is the flavor du jour, and everyone's 401K is doing well... (BTW which administrations wanted to privatize social security?) no one really care do they? (And then De Blasio pays more than the asking price for some building??? -- it goes on and on. Democrat/Republican?
Warren! Bernie! Too many of the other supposedly Democrat candidates are chameleons!
4
Intellectual consistency for Republicans consists of running campaigns every two years on bigotry and culture wars, issues they intellectually care about only as fodder for partisan exploitation, then consistently looting the Treasury with tax cuts for their rich Wall Street donors.
12
I know this isn't all his fault but because of his keeping such a low key on this and other McConnell atrocities, Chuck Schumer needs to move aside from 'leadership' of the Senate Democratic caucus.
He's done good work in the past but now he's just somnolent. Where's the outrage, Chuck? Where's the righteous indignation? Ever think of being interviewed on television and laying out what the GOP is doing and what the Dems stand for?
Would that be too much to ask?
17
Republicans still mechanically repeat a poisonous mantra from Reagan’s first inaugural address: “Government is not the solution to our problem; government is the problem.”
For four decades, Republicans have portrayed the federal government as a debilitated 'ogre' staffed by incompetent do-gooders to aid freeloaders. Thus Ronald Reagan’s further mindless assertion: “The nine most terrifying words in the English language are, ‘I’m from the government, and I’m here to help.’”
10
@B. Granat
They did a great job making the government and liberals as evil. But as you state the republicans did a great job of making sure the government was incompetent.
We have lost track of how the government is supposed to be for the people, not the rich.
However until americans wake up and realize the government is suppose to work for us, nothing will change. And americans are not waking up and fighting to take back thgeir country from the real enemy, the rich.
1
What we are seeing is the ongoing leveraged buyout of the US driven by the debt-loving, tax cut loving GOP. Just like all of the rest, these corporate raiders are draining the country, taking assets, personally enriching themselves at the expense of the ‘shareholders’ - the rank and file 99% citizens and residents of this country. What happens when we get to the point that the debt payments crowd out everything else? The wealthy walk away and the rest of us are up the creek without a paddle. Every time the GOP gets control, their mantra is tax cuts regardless of how the economy is doing - it is evidence free - just corrupt payback by careerist GOP reps for their moneyed donors. Why most folks who vote for the GOP willingly hurt themselves is beyond me. Worse health, education, environmental protection, fiscal policy, international relations, and it goes on.
12
The Republican playbook used to include a sense of noblesse oblige, now long gone. It's simply a bait and switch operation now.
4
Mr. Edsall educated us on what drives the Republican voter this week past. I've known that or sometime.
https://www.nytimes.com/2019/08/28/opinion/trump-white-voters.html?action=click&module=Opinion&pgtype=Homepage
This will not change until the mistake of killing the Federal government is felt more acutely, and that is not yet.
Many thanks for keeping score.
2
Honestly after supporting Hillary and not Bernie, this type of stuff sounds like schadenfreude to me.
4
Feds need to buy trains so we can evacuate cities from these hurricanes and floods.
Trump is so insanely jealous of President Onama that he stole his 2014 Promise Zone initiative and simply slapped a different name on it. A plantation is a plantation is a plantation no matter the obfuscatory name you slap on it. To Obama's credit, he at least didn't ram his own gift to the oligarchy through under cover of darkness. He held a press conference to praise how generous Wall Street investors were being to a smattering of the nation's "poverty pockets." since one of the lucky pockets in the war on poor people was in Kentucky, even Mitch McConnell was fulsome in his praise.
Ever notice that whenever bipartisanship overcomes the manufactured gridlock, it's either the rich getting more tax cuts and the military getting unaccountable trillions and it's always the poor and working classes who get stuck with the bill?
7
The problem is actually deeper than Dr. Krugman suggests. The problem, paradoxically, lies in two words: truth and humility. The lack of accountability of Trump about infrastructure is because we've given "truth" a back seat to "humility."
The argument goes something like this: "Gosh darned it...Trump's not a politician...he's unvarnished...he tells it like it is...and if he makes mistakes, well, gosh darned it, he's just doing his best...if you judge him you are judging 'us deplorables', too...because we are right behind him...we've got his back..." Truth takes a backseat to humility. We cannot judge the man according to any standards or any logical analysis, because, gosh darned it, "he's a non-political wrecking ball that we hired to clean up Washington." Therefore, he goes unscathed, because we accept him as an anti-politician, one of us. Truth goes right out the window.
He got in on truth, by the way: "Washington is a mess...the Iraq war was a disaster...the system is rigged...the finanical crisis proves that the rich get off easy...etc., etc., etc."
So you have to have humility for this "non-politician" and realize, however phony and ridiculous this might seem, that he's just a truth-teller. That is the sad level of acceptability that many millions have given this president.
2
And yet a huge percentage of the people most affected by lack of living wages and lack of high paying jobs continues to belong to the cult of djt.
8
And the GOP Senators say, " Ha, ha, what you gonna do about it, suckers?"
By the way, when are we going to learn the details on who got all the investment money in the 4 failed gambling casinos.
Also, speaking of bond defaults, will that tactic be used as the art of the deal, as leverage against the Chinese, who have huge investments in United States debt. But I repeat myself, what happened to the purchasers of bonds in the gambling casinos who lost their shirts.
With China the result will not be pretty. That I can tell you. Believe me. We'll see what happens.
2
The Democrats should have blocked the trillion dollar tax scam giveaway to the rich—by threatening a government shutdown.
It was that important to stop it.
2
@srwdm
They couldn't, they didn't have the power.
The intellectual dishonesty at work here is astounding; off the charts.
When will the electorate that supports these charlatans finally get a clue? Do they really crave some more "trickle down"?
November, 2020.
2
The NYTimes's piece on Opportunity Zones was sickening, especially the focus on Houston's downtrodden blighted area across from an I.M. Pei-designed, Joan Miro sculpture graced 'slum' (deepest sarcasm); according to the Dallas Federal Reserve map of Texas Opportunity Zones, virtually all of downtown Houston is such an area of under-investment.
What is upon us are the fruits of Grover Norquist's drown government in the bath tub ethos, performing exactly as intended; the ethos that government is bad, by definition, and must be kept small enough that commercial interests can manhandle it.
Since government is 'we the people', there will be more heisting and Vulturedom, celebrated as 'unleashing animal spirits', instead of the deliberate starvation of democracy's lifeblood - taxes.
6:42pm EDT, 9/2/19
3
Thanks Baby Boomers. History will not remember the Selfish Generation kindly.
5
Thanks, millennials, for not being able to put your phones down long enough to bother to vote. You think you have the guts to fight for yourself to regain all the rights we fought for and bequeathed to the spoiled generations after us? I can't wait to see where your inaction will leave you. You've had the world handed to you on a plate and all you can say is "how come such small portions?" Keep contemplating your iPhones and watch as your rights slip away. Both parties are the same? Keep believing that lie, sitting on your duffs, and losing your country.
3
@wcdevins We listened to boomer advice over and over again. All we got was a recession and crippling debt.
Thank you for the advice to vote. This is the first time that non-boomer voters outnumber boomers. I guess we'll see what we can do once we muscle your generation to the side finally.
Also worth a chuckle:
The commenter above WCDevins perfectly exemplifies the boomer generation.
*blames Millennials for the current economy when the boomers were supposed to shepherd it. Instead they voted in tax cuts for themselves.
*claims Millennials were handed the world "on a plate" but ignores that Millennials born after 1990 have literally never worked in a pre-recession economy. This is the plate they hand over and pretend we should scrape and praise them for.
*Accuses Millennials of inaction when we have been the minority voting block and have consistently tried and failed to counter the larger boomer block.
*Simultaneously maintains that the world was better before and that they have done good for the world.
*Blames everyone else for what should have been their responsibility.
Read WCDevins again. This is what boomers are.
2
Millennials have a right to complain. They had to go to college to get a good job, with resulting debt so high that they might as well have stayed flipping burgers. Ridiculously high rents. Graduating into a horrible recession. It’s easy to criticize when you didn’t have to deal with conditions like that when you got out of school.
1
H.L. Mencken said, “Democracy is the theory that the common people know what they want, and deserve to get it good and hard.” At least half of the electorate embodies a category 5 storm of gullibility, and the rest of the GOP consists of con men only too happy to give them what they want, good and hard. When the bills come due and the bumpkins are reduced to eating cat food, the con men will blame the lib’ruls and immigrants. And the rubes will fall for it again.
5
Conservatives have proven to us that they are frauds by not governing, not leading and not even trying.
its a scam but you don’t have to participate, you can vote them out.
4
Tax cuts and incentives, the whitest of white collar crime.
5
The OZ tax credit scam is in its heyday at the same time that affordable housing is in crisis throughout much of America.
How do you share this with GOP supporters? FOX news. Democrats need to bang on their door and demand to be heard. They need some entertaining scrappers. Ignoring FOX is done at the peril of the entire nation.
Why is all this making me feel sick, just sick?
4
All I can say is you should have supported Bernie rather than slamming him and tooting Hillary’s horn.
How did it work out for you?
I know it did not work out for most people. And those ancient bridges and potholes are still a threat.
7
Piqued Bernie Bros who could not swallow their petty pride gave us Trump. I wouldn't brag about that here.
2
@Blunt. Bernie never had a prayer or winning the presidency and never will. Get over him and get on to the future.
2
@Brookhawk
I don't even know how and from where you get your categorical information.
And the future that we are supposed to get on to is what exactly, if I may ask?
“ Government is the problem “. First promulgated by Saint Reagan decades ago. The original excuse for destroying all social programs. Now, the GOP/NRA Party has moved on to bigger and better Scams. Trickle down economics, the perfect snake oil for the undereducated. And Corporate Welfare, as in NO Taxes for the “Job Creators “. They must think that we are really, really Stupid. Unfortunately, they’re about 40 % correct.
Seriously.
Monday, 5:45 pm.
13
@Phyliss Dalmatian: Lady of the Plains: The white-hot anger of St. Ronnie's "Government is the problem" meant the following for his exegesis to white America:
Truman's integration of the armed services chipped away at your superiority.
Brown vs. Topeka meant that you have to move over.
The Civil Rights Act meant you have to make way.
The Voting Rights Act means your votes are half what they used to be.
The creation of Housing and Urban Development meant that you had to sell your home to save your whiteness.
The courts that created affirmative action meant that you had to share college admissions and job opportunities and lose your supremacy to quotas.
Government became a problem for white America when the government implied that others had every right to the same rights and respect that it enjoyed.
When St. Ronnie opened his 1980 presidential campaign in Neshoba County, Mississippi, practically on the graves of three voting rights workers who were crushed by bulldozers and then buried...Reagan had the audacity to shout "I believe in states' rights." In other words, the government had no right to step in and overrule a state or county or municipality's indifference to racial violence or intolerance. The law of the local jungle should be considered more important than that of the federal government.
That, Lady of the Plains, is just some of what St. Ronnie meant.
Republicans have never stopped believing in it.
The current president, and 40% of America, do so, too.
3
The President clearly believes that Job 1 is to shovel vast amounts of money to the wealthy, especially the banking and fossil fuel sectors.
We've seen this movie before, in Rome, Paris, Moscow, and Caracas. In each case, the very wealthy believed that they were better than the rest of us, and the more money they accumulated, the better. The rabble were considered to be kind of scummy, not deserving of the villas, art, and jewelry that the rich like to accumulate.
It always ends badly, for everyone. But then, the rich don't study history or human behavior. Someone once said "the rich are stupid, because they are lazy. Thinking requires effort".
Unfortunately, in today's world, thinking people are just a minority niche, thanks to supine media and feckless schools. Reality will kick in here, too, though. It always appears when least expected. I hope I live long enough to see all of our rich become ordered to pay a 90% tax rate. That actually occurred under Eisenhower, a Republican President who was ten times the man of any politician we see on TV today. It will happen sooner or later, and if it's later, it will be too late.
1
The election was rigged. That's why the Trump Wall st cabal is pillaging the nation. They know they can get away with it again.
3
Republican Translator
"Poor communities" = "Trendy upscale neighborhoods"
1
The 'tax break heist', a fiasco for ordinary folks left, as usual, in the ditch. These are awful Trumpian times, a reverse socialism where the 'rich and powerful' rob the poor. Greed is the culprit, as ethics was sent packing long ago!
6
You could simply call it Greedy Naked Capitalism at its best.
2
I here from a lot of republicans that opportunity zones are a waste of money and that the government is giving money away to businesses that don’t need it and don’t want it. I had heard this from some developers even. Ergo government is bad and is always going to find a way to waste taxpayers money. Government programs of any kin should not exist. This is their simple conclusion.
Here in Denver I have been seeing a lot of people collecting signatures to recall the newly elected governor. That is because he wants to amend the state tax law and keep some of the money for a rainy day fund instead of giving tax refunds of 30-100$ to a family in a year with surplus tax revenue. Yesterday such a person was sitting in the sun on a 98 degree day collecting signatures for the recall.
I wish with all my heart that the liberal and progressive citizens of our country fight for our ideas and goals with same vigor and zeal! We gave up a lot of ground under the pressure of a small, but vocal bunch of Tea Party lunatics. I 8 years years we let enough ground to allow Citizens United, Mitch McConnel, Donald Trump and many other awful policies and people to turn our country into an oligopoly.
If we don’t fight back we are very soon going to end up with a Duce, with all public services being privatized or run by private companies and with no Social Security benefits of any sort. This has been in the works and it is coming in 4-8 years time.
Rise and fight or end up back in the XIX century.
7
@ELB
read Dark Money by Jane Mayer. None of these so called grassroots groups are actually grassroots, actors were hired , protesters were paid to perform for the cameras. It's all the billionaires who joined up with the Koch brothers manipulating the gullible to achieve their ends. which won't be good for anyone who isn't filthy rich.
Will the past repeat itself?
Both Clinton and Obama fixed an economy broken by republicans.
And democrats paid for that by becoming targets of the so called limited government republicans.
But I think what trump is doing breaks us more deeply and hope that has lasting consequences for republicans.
12
Making tax fraud safe(r) again wasn't the primary purpose of Trump's Donor Class Maintenance and GOP Fundraiser Act (officially called the 2017 Tax Cuts and Job Act) but it was a PLANNED byproduct.
The complexity of the Act, lack of hearings, and speed of passage were destined to give the "right" tax payers, already rewarded with massive rate cuts, an opportunity for additional tax avoidance. As 13 professors of tax law wrote at the time:
"Many of the new changes fundamentally undermine the integrity of the tax code and allow well-advised taxpayers to game the new rules".
Not much of a surprise really.
"Undermining Democracy, Regulations and the Rule of Law: Let's Finish the Job" might as well be the Trump/GOP 2020 campaign theme.
21
If Democrats tried to pass an infrastructure bill be sure that Republicans would say (with a straight face);
"We can't fix our infrastructure because it would add to the deficit" ....
eyes rolling.
39
They have turned their back on any idea but one: get re-elected so as to stay in power and reward their wealthy supporters. Simple deal.
15
Many of the same people who complain about the obvious "pick a few winners and a lot of losers" flaw in these schemes advocate for heavily-subsidized rail projects and subsidizing luxury cars which are close to the pinnacle of "picking winners" policies.
It is sad that was once the smaller government/fair markets party has turned into little more than a scam-tastic cartel, but this is not a license for their opponents to ramp up their own version of crony capitalism or to convert public sentiment into a jackpot for favored interests.
2
What Paul describes has been going on since the 80's. In 1982 a tax law/regulatory revision passed that allowed companies to do stock buybacks.
That kind of broke the back of productivity gains being split 50/50 between labor and management. Instead they began to focus on buybacks which accounted for upwards of 80% for the basis for CEO pay. Hey, if that's where my pay originates I'll plunder it for my benefit seems to be the mantra.
Until voters take back their country this will continue.
38
@DP Unless voters use several news sources and develop basic critical thinking skills they cannot take back their country.
5
I’m not going to hold my breath waiting for that to happen.
1
Swamps are a natural filtering system full of balance and growth. Republicans are invasive creatures and plants that clog up the filtration system destroying the balance between the native species. Once the water is murky enough the y feast on the native creatures and once those are gone the native fauna is next. What was once natural is now dead .
46
Zeroing in on the phrase "productive public spending." Prof K clearly knows there is such a thing--but can it be measured? On my understanding, current measures of GDP count public spending as unproductive--or, more exactly, as producing value only equal to input. Could economists/statisticians do a better job of making the productivity of the public sector visible?
24
If the Interstate Highway System wasn’t built, you would still be be using horse buggy!
If NASA and DOD research didn’t exist, you would still be using IBM mainframe with 100k RAM.
Some public goods can only be built by the the Government, because their ROI is so long term, that will not be attractive to private investments.
9
@Data, Data & More Data
You can also add putting the rural area on the electric grid (1930's), extending postal service to rural area (1890's), and creating the internet (1960's ARPANET). We could create a very, very long list of things we would not have if it wasn't for the Federal government
PS GI Bill
10
Not necessarily, but Republicans can make it disappear.
1
Tax cuts for the rich, then robbing public funds, further enlarging the federal deficit coinciding with the Tariff taxes to pay for the harm of those tax cuts makes it all obvious the Republicans are robbing everyone and plan to flee the country to their relocated sources of wealth and income in their foreign homes. I'd prosecute them.
29
I like Krugman, wonkish articles included. But he is singing to the choir, as are most NYT columnists. How many people under the 100K income level for example, have an inkling of how the tax cut affected their own taxes, and how many are aware of the actual tax windfall to the very wealthy? A pie chart would be great. How many understand the shell game the GOP played by increasing the itemized deduction floor in and increasing the standard deduction amount? How many knew it was temporary for the middle incomers. Most folks have their taxes done (paid for) or run through a Q&A with Turbotax. You don't need to know the inner calculations of a preparer with or without turbotax to to get your taxes completed. The biggest concern of many: How much will I get back? That is all. Not their effective tax rate. I suggest some simple charts (not a wonkish article aimed at business students). Show the reduced taxes paid to the federal government. Show the income brackets that don't pay those reduced taxes. Eighth grade level would be a good start, seriously. Junior high speak is the stalwart of the GOP, and it seems to resonate with a lot of people.
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@Steve
Excellent commentary. Thanks!
It brings up a point that has rankled me for years: our income tax code has become so incomprehensible to most Americans that we have no idea of how it works.
And it works for the rich, not for most of us. We don't scream about the inequity because we can't see it on paper. We only know that, somehow, we don't seem to get much for our tax money.
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The donor/constituents the Republican Party exclusively represent-- CEOs, Wall Street investors, and scions of the wealthiest families-- believe the only proper role of government is to protect their interests, and particularly to facilitate the transfer of the nation's wealth into their entitled pockets.
They want to restore the 19th century Gilded Age, before evil "Progressives" started meddling with antitrust, food and drug laws, and so many regulations that interfere with their Entitled greed. They especially resent New Deal and Great Society programs that confiscate their wealth as taxes, redistributing it as undeserved "entitlements" to people who are in fact entitled to nothing.
Republicans since the 1980s have assiduously implemented that agenda through tax cuts, "deregulation," and the systematic destruction of government programs and services that benefit the non-wealthy. But they need millions of people to consistently and enthusiastically vote for politicians who are committed to impoverishing and immiserating them.
The brilliant solution was to conceal the real agenda behind fakery that appeals to ordinary voters' greed: Tax cuts for the wealthy will trickle down and make everyone rich! We need to cut taxes and shrink government to the max, so we can keep that wealth! Government only wastes our money! And no more handouts to the lazy poor, who buy lobster and Cadillacs with welfare money stolen from our pockets! And many have bought into the fakery.
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@Ted Unfortunately, many of the grand winners (some of whom, are acquaintances; some even decent people) have little belief in representative democracy. The regard the Federal Government, not as the one "company" that everyone has shares in, but as an immoral entity that tries to legally take their stuff. They fail to perceive that the issue isn't "redistribution," but the distribution prior to taxes that represents the gaming of the system to encourage the power of aggregated capital while discouraging the aggregation of power of labor.
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Republicans in the Age of Trump have jettisoned almost all of the “principles” they used to hold dear—free trade, multilateralism, deficit reduction—but one thing will never change. If there’s an opportunity to put money in the pockets of private business owners—preferably those inclined to donate to Republicans’ campaigns—by paying them to do something the public sector could do as well or better, they’re all for it. The concept of a “public responsibility,” the “public good,” or the “public interest” makes no sense to them. If it can’t produce private profit, it’s not worth doing.
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You omitted that they are supposed to be the party of family values.
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@Richard
They still hold deficit reduction dear. Wait till there is a Democratic president or Congress.
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To be fair and honest not one democrat in either house voted for the 2017 Trump Tax Giveaway.
Not one.
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@Sendan To be fair and honest, sadly Democrats have done little or nothing to reverse or remove even the most egregious tax law changes/breaks/loopholes when they have been in power. Does anyone seriously believe, for example that Biden or Booker would spend $1 of their political capital trying to remove or reverse the Bush/Trump tax 'reforms' ?
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@Sendan. We can only hope that a new regime will bring change in 2020. Including reversal of this.
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@Sendan
And not one independent (Maine and Vermont).
Every Republican Senator voted for it, save McCain (absent). A handful of Republicans opposed it in the House, and they are a strange collection; John Faso (N.Y.) along with Darrell Issa and Dana Rohrabacher (Calif.), for example.
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These opportunity zone scams are not new. Republicans have worked them at the state level for over twenty years. We have seen several iterations here in Minnesota. The name and some details have changed but it always turns out to be a virtually identical scam.
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Not so, because in this iteration Federal Income Taxes are essentially waived on taxable capital gains that were accrued in periods prior to the tax law enactment.
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@OldBoatMan
We have them in New York under both Republicans and Democrats. Draw your conclusions about who controls our Democratic Party, which is still better than our Republican Party.
@Suburban Cowboy Taxes are imposed on capital gains only when the gains are realized. Inchoate capital gains have never been taxed. That was true with the state income taxes as well as the federal income tax.
The same pattern (designation of specific, defined, identifiable zones, the promise of jobs, abatement of taxes, and taxpayer funded infrastructure improvements) substantially identical in all of these tax scams, the JobZ program here in Minnesota comes to mind and the scam reported in New York.
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Window dressing as per usual; focus on some distracting minutiae and point a finger, but ignore the Big Picture and in particular the enemy inside the Liberal house: That the real problem is, for ethical Liberals; that the DNC is in bed with it's donors. This would be fine if like Sanders' DNC donors were individuals, not corporations and interest lobbies. This is not the case.
We can presume a Nancy Pelosi is as good hearted as a grandmother, but it doesn't matter because the deeper structure of her party is owned by entities that are NOT those that are in need of a good heart. When get in line is called, the bullies of corporate America make sure that the little guy waits outside in the rain and snow until they give up and go away. That Nancy Pelosi is astronomically wealth has nothing to do with her job performance, of course not.
So the example thrown up is children's health insurance blah blah, which was last held up as the Liberal light as the shining gold star on Hillary's defeated campaign resume. Ho hum is too kind, it's clearly a welfare handout for insurers like Obamacare.
So no it's not about the other side, it's about our side.
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@CK You clearly don't know much about Obamacare or how it has helped people like me avoid bankruptcy due to healthcare.
It was a free market model with a government paid backstop because that was something that could get passed in Congress. Albeit barely!
The insurance companies already had it good. They were not looking for Obamacare.
Would it have been better to go for Universal Healthcare and fail to get anything passed? People can differ, but I believe it was better to get something passed that helps people and build from there.
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@Telesmar Mitchell - It's not about you, it's about the national government and how it has been bought by those with all the money.
You bring to mind a quote: "When one has been threatened with a great injustice, one accepts a smaller as a favor." - Jane Welsh Carlyle, letter writer (1801-1866)
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It’s been a lifeline to me too, I was a preexisting condition before Obamacare. It has flaws but it’s a lot better than the nothing people like me had before.
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Just invested in an opportunity zone fund. My intention is to save a little money on taxes and put $ in areas that need more investment. My expectation is that my rate of return will be below other real estate opportunities available to me and other real estate investments I have made. Seems like everyone believes this program is a failure before there is any data. Maybe this program will save us from going into a recession? Who knows? Love the rush to judgement.
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@Deadcat Did you read the article Krugman is referencing? The money is not going to areas that need more investment. That was supposed to be the goal of the development zones, how is this helping poor communities. Are they going to be able to move into the luxury apartments or condos? No. They will most likely be forced out of their current apartments due to higher rent.
We know where this is going, because we have seen it before.
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The article Prof. Krugman cites came from yesterday’s NYT. I read it. I saw George Soros was an investor in opportunity zones. He is evil, right? Yet, I wish Prof. Krugman had cited another source so there wouldn’t be so much of an echo effect. Unfortunately there isn’t enough data to know whether the investments will improve the lot of people living in the opportunity zones as the money has only recently been put to work. I was recently in Bangkok, and stayed at a fine hotel in an up and coming neighborhood, “opportunity zone”? Most of the employees lived close by and were happy to have jobs at the high class hotel.
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@Deadcat
How would it save us from a recession? And why call it a failure? It doing what it was intended to do - make the rich even richer.
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"Things like this are inevitable when one of our two major political parties has basically turned its back on the very idea of productive public spending."
Ain't just "pubic spending." There is no public for today's Republican Party. It's been that way for a while now.
Margaret Thatcher famously said "...there's no such thing as society. There are individual men and women and there are families." She may not have meant it the way it's been taken but, boy, has it been taken as a way to eliminate whatever is left of the society and the public commonwealth.
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@gmoke
Oh, I think Maggie knew exactly what she was saying. And it's been interpreted exactly the way she meant it.
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The republican fight against 'big government' is part of a calculated strategy to reduce taxes on corporations and those individuals within the top income brackets. Meanwhile those who once benefited from government programs suffer. And we all suffer from lack of adequately funded projects to repair infrastructure. Ironically, the grass roots Trump supporters are convinced that all of this is going to help them. Without their support this would never have been possible. What an amazing act of deception!
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As I said in December 2017:
"The ill-considered ill-timed tax giveaway to the rich must somehow be blocked by the Democrats—
Even if it requires the threat to "shut down" the government."
It was that important to block it.
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Trump tax cut is full of destructive loopholes, and I am sure that some of them were designed intentionally. However, the most destructive part is that it is being sold as a great benefit for middle class by the commander-in-chief, and some people actually believe it. We have to keep repeating the truth to undo the damage.
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@Lucas: Your truth is Trump's "fake news". Welcome to the land of the "gullibles", a perfect example of emotions, like hate, overpowering reasoning.
America needs a tax code with no tax breaks, no loopholes, no ways for the wealthy to scam their way out of paying. But since this is, approximately, #17,582 on the average person's list of things that need to get done, it isn't going to happen.
For the 1%, their lawyers and accountants, it's get rich as usual.
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Years ago, Chris Hayes said we have lost our ability to tax the rich. It has only gotten worse. Tax loopholes, tax havens, tax deferments, tax dodges, tax shelters, tax lawyers - who benefits from any of these? The filthy rich, and no one else.
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Franklin Delano Roosevelt began deconstructing the Republicans' hold on the nation with his executive order that established the Works Progress Administration. It was the centerpiece of FDR's was New Deal, employing millions of laborers to carry out public works projects, including the construction of public buildings and roads. Republicans hated it and FDR; a class "traitor," they said.
Not only is our national infrastructure an embarrassing mess, it's an open invitation to any nation that wishes to attack us. Russia or China could extinguish our electrical grids and we would be in the dark. Our national and civil defenses could alleviate some of the damage but it might take decades from which to recover.
Republicans, alas, are the party of privatization, privateers and pressure lobbyists who exist to make money for their financial backers. The public pays taxes to the government and very little of those monies, the GOP tells us, should be redistributed to those who do the work. It should be invested in management. It's a feudal system writ large with exploitation. Someone, anyone, please tell me if I'm lying.
Donald Trump and his cronies on The Hill care nothing for safeguarding America from the predations of another nation. They tell us that our defenses are strong and that we can combat any threat to our sovereignty. That's not strictly true, as I say above. Our technology is put to ill use by our political indifference to the GOP's stealth and deceit.
It's wasted.
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@Red Sox, ‘04, ‘07, ‘13, ‘18
I hope that when we are attacked, the attackers go straight for the money. Take the money away from the Trumps and the rich and make them beg for their survival among the working class. Trump thinks he's loved by the people? I think he might learn a quick lesson in reality.
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@Red Sox, ‘04, ‘07, ‘13, ‘18
When FDR put those plans together he gathered labor leaders and told them they needed to force him to implement them, otherwise they would not happen.
And they did. There were hundreds of strikes and demonstrations that year, demonstrating the public will.
Last year there were less than ten. We let the media, polls, and politicians speak for us instead of publicly manifesting behind our own beliefs.
I've been convinced throughout this presidency that if progressive leaders organized demonstrations, the whole dynamic would be radically different.
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@Red Sox, ‘04, ‘07, ‘13, ‘18
Just an aside here: since I was a child, I have been seeing the results of the work of the WPA. From murals in public building to parks and playgrounds to sidewalks to bridges and roads to..... I would say the WPA was one of the best investments America ever made.
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Ironically attended a tax update the Friday before the Tax Cuts and Jobs Act was passed in the middle of the night. Thought I was missing something because I knew it would adversely affect everyone in the room. Wish I was wrong...
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Paul is gradually moving away from a belief that the Republicans are misguided toward the fact, obvious to most of us, that their actions are deliberate and achieving exactly what they intend.
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@John Brews ✳️❇️❇️✳️
Actually, I think it's Krugman who has been saying exactly that for quite some time.
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@John Brews Exactly. If you’ve read “Democracy in
Chains,” by Nancy MacLean, you see the corrosive path of libertarian unfettered free market economics, which believes that the market—thus private profits—solves everything. This philosophy (which resembles plain greed to many of us onlookers) pushes privatization (“limited government”) and bootstrap economics. It’s quite Darwinian, and assumes that those who don’t succeed are either lazy or stupid and deserve their lot. This philosophy used to be fringe, but has now fully consumed the Republican Party to the extent that it is unquestioned.
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@John Huppenthal
"welfare food dependency", i.e., getting enough to eat, is an entitlement program for agricultural interests, primarily. It was created as a means to pay farmers for excess production. Where is that money going now and are those crops currently rotting in the fields?
8
Our government is supposed to exist “of the people, by the people, for the people” - or so Lincoln said in the Gettysburg Address. Instead, our current government is “of the rich, by the rich, for the rich”, sometimes via lobbyists and sometimes more directly - in this case, tax cuts for the rich intended to “trickle down” to the poor, a system that has never worked in the several decades since Reagan first instituted it.
I have no problem paying taxes for the common good - but I do have a problem paying taxes so the rich (who mostly inherited their wealth) and highly successful businesses can avoid paying their taxes, while infrastructure of all varieties crumbles due to lack of funding.
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@Karenteacher see "Secrecy World" by jake berstein if you really want to know where the rich really hide their money. it covers the panama papers. excellent read.
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@L'historien Thank you. I will check this out.
Another good column from Dr. Krugman. My understanding of this current permutation of "Republicans" is that government, essentially, shouldn't do anything except defend the country. Private enterprise and "the marketplace" are sacrosanct, so any work to be done to the country's crumbling infrastructure (and virtually everything else traditionally "governmental") should be handed over to them.
It doesn't actually work very well in practice, but Republican donors are well-compensated, as a result.
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This is the Charles Koch “libertarian” philosophy. Then there is the wacko that Trump put in charge of the Bureau of Land Management who thinks that the “founding fathers” didn’t believe that the government (the public) should own any land.
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@Robert Wood - Given Trump and McConnell’s reaction to Russia’s attack on our elections, no, they don’t even think the government should defend the country. To them, the only legitimate function of government is to collect taxes from the general public and give the money to Republican donors.
13
Don't tell me you are surprised. After more than two years, you should expect that that money will make Trump's relatives and friends richer.
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It's still startling how shameless they are in violating the laws and norms of this country. Even some Republicans are embarrassed he would even suggest his Doral for the next G7 meeting.
36
@E -
"Even some Republicans"
But not very many and none of the ones who actually could do something to stop him.
16
@Roland Berger..l.2years? Much longer and before Trump. It's the system, sold to us as American 'freedom'. A great hoax in the history of democracies---ignoring the public interest, in favor of the wealthy.
What did the colonies rebel against King George for? They wanted representation for their taxation. We're not getting it.
14
Probably one of the rare occasions in which I agree with Dr. Krugamn. The "opportunity zones" might just as well have been designed by the South Jersey Norcross family. In our Midwestern city the opportunity zones were seemingly designed by those already invested there, or in parts of the city which was already undergoing gentrification and modernization.
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Nobody is stopping the states from spending on infrastructure.
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@Rich Murphy Wrong. What stops states from spending on infrastructure is that they don't have the borrowing capability the feds have, and they don't own the interstate highway system. Many states have to balance their budgets, and none of them can print money. The federal government simply has the power and leeway to make things like nationwide infrastructure happen.
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@Rich Murphy The Republican-led state governments are stopping the states from spending money on infrastructure. Of course "privatizing" is OK with big tax breaks.
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Eisenhower built the Interstate Highways system. We don’t even maintain it.
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Arguably adding the prescription drug benefit to Medicare in 2003 was adding money for the public benefit in the Medicare Modernization Act. But it was paired with introducing Medicare Advantage which, again, was about helping private enterprise compete in the Medicare market by over-subsidizing Medicare Advantage plans. Although now Democrats generally support Medicare Advantage it was seen as a giveaway in 2003.
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@Jeremy
Medicare Part D in 2003 had the unintended consequence of reducing the need for drug companies to do R&D. It was a total give away to the pharmaceutical industry. They could charge their largest customer whatever they wanted and were protected from competition. My husband works in R&D and its plummeted from what it was.
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Medicare Part D, was a big boondoggle for insurance companies. Prescription Drug benefits, in Part D, must be part of Medicare Advantage Plans, bundled with Parts B and C, or be purchased thru an insurance provider at additional cost, although you have to pay monthly part D premiums to Medicare. There is a lack of transparency in this whole shell game!
To top it off, each of these Plans has its own formularies, some of which make no sense! For example, when you schedule for a colonoscopy test, normally once in six years, it is supposedly covered by Medicare part B, but you may be given a run around to get the one time med that you have to drink to clean your stomach before the test can be done. Aetna Medicare PPO forces you to use the ancient generic med, that you need to drink over 48 hours with 2 gallons of water. They do not allow a newer formula, Suprep, a simple mixture of 3 generic chemicals, to be taken just the night before. It could could cost you up to $160, unless the doctor fills up forms for prior authorization, certifying that old generic med doesn’t work for the patient! Docs, of course, don’t want to waste their time in such a useless activity, specially when Medicare pays them minimum wage rates.
I firmly believe that Medicare Part D, was pushed by Republicans to reward big Pharma and Insurance industry, in return for big donations. The same thing holds for Big Hospitals. It is about time, Health care industry is banned from making political donations.
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@Data, Data & More Data
You are cleaning your intestinal tract.... and I got super sick on the solution last time round.. Furthermore, colonoscopies are not esp. uncomfortable procedures-- menstrual cramps can be lots worse -- and one doesn't need to be put under.. and you can watch. Initially, there is a bit of discomfort but then I nearly fell asleep.
The Republican party has not just turned its back on the idea of productive public spending, it has turned its back on the idea of anything that benefits the public - as opposed to benefitting its donor class.
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@WZ - The NYTimes's piece on Opportunity Zones was sickening, especially the focus on Houston's downtrodden blighted area across from an I.M. Pei-designed, Joan Miro sculpture graced 'slum' (deepest sarcasm); according to the Dallas Federal Reserve map of Texas Opportunity Zones, virtually all of downtown Houston is such an area crying for subsidized investment.
What is upon us are the fruits of Grover Norquist's drown government in the bath tub ethos, performing exactly as intended; the ethic that government is bad, by definition, and must be kept small enough that commercial interests can manhandle it.
Since government is 'we the people', there will be more heisting and Vulturedom, celebrated as 'unleashing animal spirits', disguising the deliberate starvation of democracy's lifeblood - taxes.
6:52pm EDT, 9/2/19
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@WZ
You said "The Republican party has not just turned its back on the idea of productive public spending, it has turned its back on the idea of anything that benefits the public - as opposed to benefitting its donor class."
I started voting in '68 and I'm at a loss to recall *anything* the GOP initiated whose primary intent was to "benefit the public" directly. I would welcome some examples, honestly. Yes, Nixon signed the EPA into existence but it started life as a bill initiated by a liberal Democrat from Montana, James Murray. Sorry, tax breaks indirectly putting a couple of dollars into the pockets of the working folks don't count. Sorry, military procurement projects such as the F-35 which keep a few folks employed don't count ...
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@JR Berkeley
But nevertheless, Nixon did sign it.
1