Tax cuts don't mean trickle down. They don't mean jobs creation. They don't mean growth. They don't have anything to do with the American economy. Here's what all the tax cuts enacted by the GOP since Reagan mean: they mean that the GOP is disinvesting in America as a nation, yanking its money off the table after having won and won and won for decades, pulling the ladder up behind them, and effectively seceding in place as a separate but better class of citizens entitled to the fruits of American greatness but taking no part in originating any of it. That's all they mean.
4
Gail, I know you're trying to be collegial, but you can't let Brett get away with saying these things. First of all, the lovely bipartisan Reagan Tax Reform Act of 1986 precipitated a huge recession. Second, we have a progressive income tax, so the rich actually do not pay a disproportionate share of taxes. They pay a higher marginal rate as their income increases, which means that they pay the higher rate on income that poorer people don't have. And finally, we have the shameful degree of income inequality we are experiencing now precisely because the rich do NOT invest their extra income productively or redistributively. They do "sock it away" in stocks, bonds, and existing real estate. They're not building low income housing so that poor working class people can live in the meager wages they're getting. Businesses actually have plenty of money, so they don't need to pay less in taxes. And when they do make more money or lose less in taxes it doesn't go to the workers in the form of higher wages, it goes to the owners/shareholders and executives. These are problems, and there are ways to address them, but cutting taxes is decidedly not one of those ways. Giving the government less money to spend on much needed things like repairing infrastructure seems the height of irresponsibility.
3
I teach tax and accounting. When discussing planning and policy, I always advise my students to "save cash" rather than "save tax." Taxes are but one part of our cash picture. If we focus on cash, we don't get lost in the weeds of politics which muddies the tax waters. A tax cut in one place likely results in increased cash spent in another place, so on a net basis a person is worse off. For example, let's say there is a tax cut that contributes to causing the public school to which you send your children to be placed in dire straits. Your options become pumping your own money directly into the school or pulling your kids and sending them to a private school. Net the tax saved to the additional cost you are now out of pocket to see if a tax cut was really worth it. For most of us, it would not be.
4
All that money that will be squandered in this tax cut should have gone to infrastructure.
Makes me want to cry.
2
Clinton is neither Centrist nor Progressive. She is Republican Lite as everybody but Bret knows.
I have a fairy tale for you, "Donald J Chaos and the party of Wrong." Sticking to the right-wing dogma and ignoring the facts. Corporate profits at an all time high, solution? Tax cuts! Result: SOS. Strongest military in the world, solution? Give them more money than they can spend efficiently! Result? Same strong military at a higher cost! Foreign visitors overstay their visas and become illegal immigrants, solution? Build a big wall between our country and Mexico! Result, Little or no change in illegal immigration, waste our money, and insult our neighbor Mexico. 2% of our citizens have to pay an estate tax when inheriting millions of dollars, solution? Claim it affects just about everybody and eliminate the tax! Result? Tax collections reduced and budget deficit balloons! Murderous dictator, Kim Jong Un rattling nuclear sabers, solution? Double-dog dare him to keep it up! Result? Raise tensions and increase risk of accidental war! Brave minority soldiers give their lives for their country, solution? Make clumsy attempt to console their families and then attack them when they point out the clumsiness of attempt. Result? More pain and suffering for grieving families and shameful embarrassment for the rest of us. Trump is the PT Barnum of 21st century politics. And we all better watch our backs, 'cause the circus is in town!
3
Boy did this quote strike me as I read it coming from a Republican "and I’d hate to begrudge Americans economic growth just because it might help the president politically" this was exactly the Republicans strategy throughout the Obama years, not sure why it surprises me because for the most part to be a Republican is to be a hypocrite.
2
How good is this is for us? The rich have more bread and honey then before in their cozy one percent. While the rest of the united states benefit lowly and adds to the list of issues. Issues as paying off the national debt and without high taxes we will slash spending or rise gdp production.
His view that it will improve the state of economy due to spending is fallacious has he not seen the stats of the average American credit debt in 2016 is 16k and they should not further these actions. While cutting spending has caused heated debate and vox mentions the loss of spending in many needed programs due to these actions.
As a student who works after school the reform on the 401k has a trepidation effect for the younger generation saving for retirement. Growing up in the middle class my father had made a saving accounts for me and showed the importance of saving. While many Americans struggle with saving even less will go into this program due to taxes up-front.
Taxes are like vaccines, you may not like it but it is needed. Not having it will only further the struggle of the lives yet to come.
1
"Republicans have spent the past 60 or so years trying to dissociate themselves from their nativist, isolationist, ethnonationalist wing"
In what universe?
2
"...it’s amazing how the current occupant of the White House has managed to bring us together."
In other words, the enemy of my enemy is my friend. Yet, some Centrist Democrats and Centrist Republicans are getting together in, of all places, South Carolina, where an online Facebook group discusses many political issues and tries to resolve the centrist approach to them.
Perhaps all hope is not yet lost, though if Trump can get to the "football" we're all in danger.
3
Show us those tax returns, 45!
2
Gail right, Brett wrong. Put more cash into the hands of those who will spend it, driving the base economy, not into the hands of those who will invest it, mainly lining the pockets of already-wealthy individuals and corporations. No amount of spinning is going to make me believe otherwise - end of story.
6
Tax cuts will NOT produce "opportunity and mobility" in the economy. Will they produce a higher educated working class? How? Will the produce higher paying jobs? Will they produce a cleaner environment......a solution to climate and energy problems? Tell me how..................
7
Q: How rabid is the opposition to POTUS?:
A: “[I]f there’s a tax cut and the economy goes up 3 percent, Trump will totally take credit. That alone is a good reason to just let things alone”--Gail Collins.
Yes, it is better for every citizen to suffer than for POTUS to look good. Is there any hyperbole in the mantra of media animus toward POTUS by supporters?
RE: Diminishing 401K, it will never happen, this is a scare tactic (like NYS ConCon will take away pensions).
Draining the swamp, check.
Forcing Congress to be accountable-even for what they don’t do, check.
Making parties make deals, check.
Already funding a 2020 election war chest, check.
Let’s get Fiscal: https://youtu.be/hPugk31KXqk
2
Bret,
In what world is 'trickle down economics' not a belief-based Republican anti-science?
Just because one has a nostalgic, traditionalist longing to believe that some cultural bias is fact doesn't make it true, or honest.
Reaganomic theory is an anachronistic myth that was never born out by history or evidence. Its adherents are just nostalgic for their Gipper's soothing reassurances.
Seems 38% of the US still clings to their comfortably traditionalist belief in the biblical myth of Creationism despite obvious observable reality that the story was never possibly fact & was invented before it could be incontrovertibly disproved:
http://news.gallup.com/poll/210956/belief-creationist-view-humans-new-lo...
What percent of those traditionalist creationists do you suppose are also traditionalist believers in Trickle-down economics?
The point of Creationists & Reaganomicists is not so much that they actually believe their myth, but they're indulging their comfortable tradition of being obnoxious to all that 'secular progressives' implicitly stand for, like social & economic justice for the disenfranchised, etc.
It's just the ongoing American reality-show of Archie Bunker Vs. Rob Reiner. But Trickle-down economics? That's just a bad sit-com based in a bad American fairytale.
5
Really Bret: "When the rich “sock it away,” that only means that they are spending or investing, which is to say, putting the money into the real economy just like everyone else."
But of course when the gubment gets their greedy hands on money it just turns into chopped liver, right?
Look Bret, just in case actual figures matter to you in your zeal to cut taxes, wealthy people spend about 50% less of their income then poorer people. Most of the difference going into savings.
Aha, you say, savings are important, as like corporate tax cuts that'll go into companies investing more and growing. Nice in theory, but in practice most large companies are sitting on literally Trillions of dollars in cash, and whatever they're not sitting on, they're giving back to investors.
Microeconomics 101 advice: companies only invest when there is unmet demand. That isn't the case these days because the middle class has no money to purchase things, and trickle down isn't working. Which brings us back to where we started. Anything learned?
4
Ice Cream??? I will have a Mueller sundae, with Comey sauce.
And soon, please.
3
The real problem we have is that the Republicans equate income and purchasing power with quality of life. If the mall is your version of heaven, then they are right. If good schools, livable cities, parks, mass transit, clean air and water are high on your list then you can't really vote Republican in good conscience.
6
Brett, sock it away does not mean spend it. It means not spending it. Please don’t try to tell me I don’t understand basic colloquialisms in order to justify your absurd economic theories. No, most people would not agree with you.
2
Don't cut my taxes. Tax me more and spend it on infrastructure. Thanks.
4
"If the rich benefit disproportionately it is only because they pay a disproportionate share of taxes." Huh? Oh that I had an income so large that I had to pay more taxes! ...Do you call buying private jets, yachts, 3rd and 4th homes, "trickle down"? Give me a break!
4
What difference does it make to an extremely wealthy person if their tax bill is 50 or 80 million dollars? They' would still have more money than can be spent in a lifetime. Nonetheless what is to be done with those who are ill, families without heat, hungry kids?
All of the woes poor people face while others vacation in far off places or spend enough on a meal to feed a family for a week or a month and doubtless even a year is justifiable as each deserved the family into which the god of their family's choice had placed them.
The argument of trickle down is an absurdity when a bigger more assured tax bite would accomplish what some wish and others claim will happen. This is the same old smokescreen which always accompanies any theft from the treasury. What is it about this transfer of wealth don't the formerly working class, now working poor, get? Maybe when they are fed to the lions it will become clear.
Mr Stephens apologizes for of all things diverging from the party of Reagan. Paul Ryan? Mitch McConnell? Voices of reason?
Must take a lot longer and more intense therapy to cure delusion than my untrained mind imagined.
5
Oh good, a perky chummy cocktail party convo about tax reform, with Bret and Gail doing for fiscal policy what the hot air balloons do for the Macy's Parade.
"If the rich benefit disproportionately it is only because they pay a disproportionate share of taxes."
The low income folks also pay taxes as a share of their incomes, not too different from the rich. The only tax they pay lower than the rich is federal individual income tax. A sizable share of their taxes are paid as payroll tax, which is quite regressive. You pay 6.5% or so from the first dollar you make to up to about $120K or so. Over that amount, even if one made $100 million or $1 billion or higher they stop paying payroll tax on that amount. Then sales taxes are even more regressive: the lowest quintile pay 7 times more as a share of their incomes in sales taxes than the top 1% does.
Yet another paradox: In Missouri the majority pays more in state incomes tax than the majority Californians do, though top state incomes tax rate is 13.3% in CA, while it's only 6% in MO - the 6% starts at about $9K, while in CA, that 6% doesn't kick inanity after $58K. Most in the middle class pay at 2% rate only in CA.
The sad reality is that most of us don't have a clear idea how the various taxes are structured. We assume if the federal income tax is cut we would pay less. And if it's raised as Bill Clinton did, we would pay more. In reality the opposite is the case for most; only the very rich pays substantially more. About half don't pay any federal income tax, but pays payroll & excise tax and gasoline tax. Then the higher the top rate the less would pay at that rate.
2
I'm surprised that Mr Stephens has not moved to Kansas given his enthusiasm for tax cuts and their impacts on the economy- and I am pretty sure they have ice cream there as well. Once again Mr Stephens presents his wishful thinking as solid fact without pause or consideration. There are numerous examples in US history of tax cuts failing to stimulate the economy enough to pay for themselves much less improve the situation but I am sure this time things will be different because......
6
"When the rich “sock it away,” that only means that they are spending or investing, which is to say, putting the money into the real economy just like everyone else."
When the poor or middle class family builds its first home with government subsidies provided by taxes paid by the rich, that creates jobs too. AND in addition, it creates a world of opportunity for the kids in that family who can now access better education and job opportunities--i.e., the ability to contribute to the economy--in the future. Whereas the kids of the 'poor rich guy' who can only afford one home (because he paid those taxes) will ALSO have the opportunities associated with a privileged upbringing and contribute to the economy (with or without the second home). So, no: giving tax breaks to the rich for a second home is not a net gain for society, and actually is more likely to be a drain on the future economy by undermining meritocratic opportunities for the offspring of the less wealthy.
3
Bret: “Republicans have spent the past 60 or so years trying to dissociate themselves from their nativist, isolationist, ethnonationalist wing only to fall right back into it. It’s like a man falling off the wagon after decades of sobriety.”
Nah, it’s more like a heroine dealer who has created a clientele of addicts finally giving in and becoming user himself. And don’t forget that the Republicans’ Toxic brew has included racism since Nixon’s southern strategy days.
2
I wouldn't support any sort of tax reform without some sort of proactive jobs investment program. As it stands, this "reform" smells like "trickle down" that failed under Reagan. His jobs numbers look good in the mid-1980s because of high unemployment in the early 80s. Some effort needs to be made to attract workers off the sidelines, 'cuz they won't be coming from Mexico or anywhere else, not while Trump is president.`
2
Brooksley Born, former Chair of the Commodity Futures Trading Commission, during Clinton administration, in May 2015:
“The power and influence of the financial sector threatens a continuation of the regulatory capture that contributed to the financial crisis. Financial firms, too often, have significant say in the appointment of high regulatory officials. The tendency of some former government officials to obtain highly lucrative positions in the financial sector after leaving government may well act as an inducement to those remaining in government to serve the interest of the financial sector rather than those of the public.”
'Dynamic scoring' is the ultimate expression of regulatory capture; tax cuts the ultimate expression of 'Easter Bunny' finance. Make Finance Fraud Again.
1
Bret: the Dow is indeed happy. It's way up, record high, yet the GDP's growth rate, which you want to be 4%, is way below that and just static at 2 or 3, in fact, which is normal in 90% of the years since the 1950's when it AND the corporate and individual tax rates were higher by far, not lower. See? No tie.
Then where has all that extra value of our 2017 stocks gone? Where any added corporate cash would go -- into the executive-level bank accounts and business's foreign investments across our wallable borders into economies taking off by eating our lunches. E.g., China, which is legislating (forcing) electric car manufacturing - while GM here sort of talks about it and Fiat-Chrysler mostly ignores it. So if GM and FC suddenly get 5% or 50% more cash to keep from a GOPers tax giveaway, why would they pay US workers a cent more, why would they build expensive sites here? They'll join or stay with the rocket companies that are already in China, building by law the electric cars China wants - and we will import. The new Buick small SUV is built in... you guessed it.
And who pays for the lost revenue and debt interest growth caused by the trillions given to the non-job making corps? Bret, you do, you will, you have always done. Who's the April Fool, not Trump, not GM, not China. Mirror, please.
1
There was no Carter stagflation, Bret. GDP growth in his term exceeded post-WW2 average.
https://s3.amazonaws.com/media.hudson.org/images/20160808AndersonGDPChar...
I am beyond sick, Bret, of the argument that, even if the wealthy sock their money away, they will help the economy grow. Am I missing something? If they sock it away in the stock market, other wealthy people will make money that they will sock away in the stock market. So what? The stock market is not the economy and it is not real consumer growth. Give the money to people who need it now. Guess what? They will spend it. Immediately. And they will create jobs.
6
Bret Stephens, I respectfully submit, has it wrong. If you want to grow the economy, double the minimum wage, or triple it, and tax the bejeezus out of the thieves who stole it first, from native tribes, the enslaved Africans, from the sharecroppers, from the sweat shop workers, from the pre-union industrial wage slaves, and, more recently, from pensioners in industry, from the sick, from 401-K investors, from real estate customers, and college-tuition borrowers. The nation is rolling in money, with corporate profits and the stock market at all time highs. The problem is the concentration of wealth. It needs to be taxed out of existence, the way the "unregulated growth" of a cancerous tumor has to be cut out before the body dies.
3
we are all going to be saved by the "secret" republican tax plan - how? - its a secret.
2
Tax cuts at what price? I'm a retiree living fairly comfortably on my retirement savings that I placed in 401Ks starting way back in my 30s. If I had been limited to only putting in $2000+ dollars instead of $18,000+ dollars per year I don't know if I'd be living as easily as I am now. Given that by the time the 'tax break' reaches the middle class it usually amounts to a measly $200 per year and the fact that services, fees, plus cuts in different kinds of aid accede that amount most middle class voters are worse off after the great tax bill gets passed. Meanwhile, the rich gorge on their tax breaks. This time around they want to get rid of the estate tax because, I guess, children who have done nothing to earn anything in their lives like Paris Hilton needs a new wardrobe or perhaps a new yacht. Tax cuts are not like ice cream unless you admit that ice cream gives you heart disease if you keep gorging on it. With our infrastructure fraying, our support for colleges, city services, the environment, and health care being sliced into microscopic portions I would say that tax cuts are lethal as well. It's time to stop worshiping at the altar of the sacred tax cut and realize that raising the wages and incomes of the American people and providing them the services they need will lead to prosperity not the golden calf of tax cuts for billionaires the Republicans keep pulling out every year.
5
Bret, I'll agree that your trickle down economics joke is hilarious, though we'd understand this is rather dark humor.
2
Why does Gail let Bret get away with making unsupported conclusions about tax cuts stimulating the economy? Companies are sitting on cash because there is low demand......I know venture capital people in California who are ready to invest now if the right startup comes along.....tax cuts do not figure into their plans at all. If you want stimulus, repair some bridges and improve our infrastructure.
6
Give the money to the people who need it; not those who don't. I would certainly spend extra money from a tax cut on goods and services from those who have the money. They should thank me.
2
Seems like this debate is an ideal forum for a test case to see if two "reasonable" people with opposite views can at least agree on the facts about tax cuts. On the one hand, in this article Bret Stephens sings the praises of tax cuts for the rich and predicts that those cuts will "trickle down" to ordinary Americans, improving the economy for all. On the other hand, Paul Krugman frequently and strongly disputes this argument as "voodoo economics", among other things, which will do nothing or perhaps make things worse for poor and ordinary Americans while further enriching those who least need it. Why not let them debate this openly in the Times? With the caveat that they must finally come to an agreement on the "truth". If "truth" is indeed dead, maybe we can at least bury it!
Bret is simply wrong (or deliberately disingenuous).
- The tax reform proposal gives them 80% of the benefits but they do not currently pay 80% of taxes.
- There is no evidence whatever that lowering top tax rates stimulates the economy.
- Eliminating the inheritance tax will not stimulate the economy; it is just a gift to a tiny minority of truly wealth families. (It currently applies only to estates over $11 million ... a tiny fraction of all estates.)
since when do personal taxes for the rich create jobs?
the rich don't invest their own money in the economy.....
other than Harry Winston.......they borrow money
Corporations return money to stock holders.....a minority of Americans...
not to their 2nd and 3rd level employees in the way of salary increases.
Haven't we had enough of Milton Friedman and trickle down....
To begin with it's so very insulting to those who have to eat the crumbs which fall off
the tables of trump and his cronies while they do the work to keep their companies
profitable.
Bret Stephen's assumption that a tax cut will lead to economic growth of 3% is unprovable and reveals just how much conservatives are willing to lie to get their policies implemented.
Trumpism is not fueled by economic fury. It's fueled by bitterness, hatred, unjustified anger. Which makes people blind and susceptible to alternative versions of reality. Trumpsters already have more confidence in the economy even though nothing really has changed except the color of skin of the president. For Trumpsters, their economic stability will continue to deteriorate but that will have no impact on their support of Trump. That's because their support of him is not based on reality, economic or otherwise.
Bret, if your goal is to increase the growth of the economy to 3%, why give your plutocratic friends a double digit % windfall in tax cut giveaways in exchange for doing nothing in exchange? The plutocratic "growth" in wealth has exceeded 3% ever since they started getting tax breaks the rest of us do not. They do NOTHING in exchange for such generosity. This applies to corporate profits too - a tax cut fattens their bottom line and bonuses in the executive suite for doing NOTHING! They benefit disproportionately BECAUSE they are RICH and continue to reap disproportionate wealth off of society - NOT BECAUSE they pay a disproportionate amount of taxes.
Besides, shouldn't they be contributing to reduce the deficit they are so concerned with? Or do they want to pull-a-trump on us and have the country default leaving the poor and middle class holding the debt and ramifications while the plutocrats benefit from capital they've hoarded and socked overseas and stock market - inflating company values on paper and higher income in the exec suite, NOT higher wages, employment or investment in R&D and such.
Growth for the rest of us will only happen when growth for the plutocrats slows or is rightfully halted.
Plutocrats and banks hate more money in the hands of the poor and middle class who can actually start paying off their obscenely high interest rate loans.
Have the immigration people checked the dreaded base for their Putin Party Card and immigration status from Russia yet?
2
Like ice cream to kids, Americans scream for tax cuts.
Like kids, they either don't have the money or want to pay for it.
Fine, give them their ice cream. Sorry, tax cuts.
But make taxpaying Americans write a check each year to pay for the growth in our annual deficit and an additional check to start to pay down their national debt. Now see if they enjoy their ice cream!
Elected Politicians and their staffers, from both parties, must be held personally liable, responsible and accountable for the lies they have told US, their gross mismanagement of our county, our $20.4 T and growing national debt (108% of GDP), and our $100 T in future, unfunded liabilities they forced on US jeopardizing our economic and national security, while benefiting themselves, their staffers, their party and special interest donors.
http://www.usdebtforum.com
2
“As we peer into society's future, we -- you and I, and our government -- must avoid the impulse to live only for today, plundering for our own ease and convenience the precious resources of tomorrow. We cannot mortgage the material assets of our grandchildren without risking the loss also of their political and spiritual heritage. We want democracy to survive for all generations to come, not to become the insolvent phantom of tomorrow.” – Dwight Eisenhower.
Some think the post-WWII period as when America was great. We led the world in progress and quality of life, and boasted the largest middle class the world had seen.
We now have a billionaire democracy. Candidates from both parties are now picked and backed by corporations and the wealthy.
Our Constitution has become a quaint piece of paper, just like the accords we are breaking. Trump is making millions violating the emoluments clause, yet Congress abets this and other corruptions as it exercises single-party rule.
More than democracy will be lost, unless our tax and fiscal policies do not reverse course.
Trump (GOP) must think the years after WWI were when America was great. It was when Wall Street, not Main Street, was viewed as the economy. This was made possible by Republicans slashing taxes like Trump intends.
Most people don’t read history, and don’t know how the Roaring 20’s ended for most of our people and the world. Or like Trump, they really do not care about others, so long as they get what they want.
1
We should replace the term "Tax Cuts" with "Grow the deficit faster."
We are already spending far more than we are taking in, and that gap will increase significantly with these cuts. In the case of a tax cut, the "spend" is the cut itself. With apologies to Laffer: trickle-down has been disproven time and again.
Is 2-3% growth really all that bad, when you look the alternative of having to someday face the debt by devaluing our currency and causing hyperinflation?
The day of reckoning will occur once interest rates have gravitated higher (2-3 years) and when the cost to service the debt fully exceeds GDP. Countries will begin to question our ability to repay the debt and will stop purchasing it at auction. And that's when things will get very interesting for us all.
I guess you can put me into your "the end is nigh bucket."
All I know is that I have to keep working every day, day in and day out. This is what I signed up for, this is how I survive. It's hard to keep doing it while just keeping ahead of the bills. I don't believe ANY of this mumbo-jumbo is aimed at helping me (the average American), however I do know that paying less income tax WOULD help me.
1
I think we're seeing some of the party lines coming out of the GOP. The mainstay is going to be we have to raise GDP. I've had a lot of people use that quote to me over the last 10 days, that have never uttered the words GDP in there life. They have no idea how taxes affect GDP or what even comprises GDP. The next one is we have to spend like Reagan did to win the cold war and America did to win world war 2. Also that the "Obama" stimulus didn't accomplish anything, usually this one comes in the form of a question like, " whee's the bridge the Obama stimulus built"? They just keep coming.
Brett, your observations on the value of tax cuts simply have no basis in economic history. First, for just one of your examples, there’s no connected set of portrayable, measurable economic outcomes that show wealthy people building second homes yield any sort significant demand-creation that affects displaced steelworkers or air conditioning assemblers, etc.. For another, your angel investors are already plentiful and not scrimping on supporting 21st century innovations. Trump’s Heritage Foundation tax cuts do not change that.
You might want to expand your understanding of that our market economy that Ryan et al speak so reverently about, is built on broad based demand. The reason that the Kennedy tax cuts worked so well is because the money went those whose incomes were so low that they spent it and created both broad based demand and resulting employment. And, how can you not just look at the ensuing disaster of the “saving” of our economy by Bush II and defend tax cuts for the wealthiest with a straight face.
I suggest that you study up on real economic history and market economics. The research results might lead to concluding that tax cuts for the wealthy as some sort of magic water to offer too many people thirsty for a future for their families after the mills and mines closed.
1
From your own paper dated March 9, 2017:
"Although the top corporate rate is 35 percent, hardly any company actually pays that. The report, by the Institute on Taxation and Economic Policy, a left-leaning research group in Washington, found that 100 of them — nearly 40 percent — paid no taxes in at least one year between 2008 and 2015. Eighteen, including General Electric, International Paper, Priceline.com and PG&E, incurred a total federal income tax bill of less than zero over the entire eight-year period — meaning they received rebates. The institute used the companies’ own regulatory filings to compute their tax rates."
Why aren't the Democrats rallying around these facts? Why aren't they yelling screaming protesting and drum circling around this?
3
Everything was better when you were young—even the ice cream.
I'm with Gail on this one. Is the idea that without tax cuts those with a lot of money will not invest? My feeling is that they will always invest if they see the opportunity to make more money. With tax cuts they'll be able to invest more if the opportunities are good but they will also invest without tax cuts it the opportunities are good. Opportunities are good when "the masses" are buying whatever is being made. If these people aren't buying why would you invest regardless of your tax rate? Giving tax cuts to people who spend is certainly better than giving tax cuts to the rich and hoping that it trickles down. My understanding is that trickle down hasn't worked, and did you forget off shore tax shelters?
How about a conditional tax cut plan? Putting your money where your mouth is. A tax cut for the rich with all the frills of the Republican mantra, but if the data shows that is does not result in the growth promised or trickle down to higher wages for workers, then Plan B kicks in which is what the Democrats would like to see, cuts, if any, for the working class. The detail of how this is to be measured and within whatever time frame must, obviously, be worked out in advance. This might actually encourage the affluent to "trickle down" because if benefits are not seen in terms of higher wages they will lose their generous tax cuts. It cannot continue to be "Heads I win, tails you lose."
Just how do you think that we can run a country with
less taxes? And add billions more to the bloated
military budget? To say nothing of the trillions in debt?
How is this going to work?
I'll tell you how. The republicans are going to steal
YOUR MONEY! That is. The money you've been paying
since you started working to find healthcare and social security. That is not an entitlement.
It is YOUR MONEY! You earned it.
So if you think you'll be saving money by payment by less tax
you are fooling yourself.
Go ahead; pay no taxes. What will you do for healthcare
when you are 70?
1
Not really much in this conversation about taxes. So, no, the rich don't put it back in the real economy. I'm one of them. I won't spend more if I have more. I'm already fine in the material world. The only thing I might spend the extra on is more psychotherapy to survive the age of Trump and a GOP controlled (?) government. My extra money just goes to some charities and into funds for my kid's futures. So no, Brett, you've got it wrong. Not to mention that most credible economists agree that the amount of extra growth you get out of tax cuts isn't enough to make up for loss of revenue. Clinton's administration did great things for the budget without lower taxes. Brownback has destroyed his state with the usual dishonest GOP rhetoric. Guys like Brett who buy into this false narrative of the GOP and growth based on tax cuts need to read more history and think hard about what our country really needs.
2
So to be clear, we all believe in universal health care, we just don't want to pay for it. We all want to flex our military strength all over the planet, we just want our great-grandchildren to be paying for it. We want everyone to have a decent living wage, but we don't want a minimum wage that people can live on. And heaven forbid that corporations pay taxes. Apparently they are people too and they are going belly up at such a dazzling rate that the streets are littered with their corpses.
Get over it, the US economy is changing, it will not look like it did thirty years ago. Nothing the government does will make it so.
Two percent growth is not the problem. Dollars not being worth the paper they're printed on is the problem. It takes an unreal number of dollars to provide the same basic needs that people used to purchase for far less. Today people say it takes two incomes for a family to survive. When it takes three will we make bigamy legal?
1
"When the rich “sock it away,” that only means that they are spending or investing . . ."
This is just wrong. When they "sock it away," they are, by definition not spending it. That's what "sock it away" means.
And with long-term interests rates south of three percent, if you think padding the savings of the wealthy is going to unleash the investment boom we've all been hoping for, you're nuts.
It was originally about "ice cream," but we have moved on to total decadence. You scream for tax cuts. I scream for raising taxes on the higher incomes.
1
this conversation is rife with fibs.
he rich don't build that second house or be angel investors, they do passive investments in the stock market including the international stock market.
Or they buy an existing house and jack up the rent. Neither creates jobs.
And...quoting debt under Carter vs Clinton is really so last century. There actually becomes a point when the interest payments (plus supporting the elderly) starts an exponential rise perhaps triggered this time by a return to NORMAL interest rates. Oh and Bret, you have not told us why getting rid of the inheritance tax is in any way shape or form necessary or fair. Finally, I would say it is the Republican party not surviving Citizens United which allowed billionaires to create and fund the Tea Party. Trump is less of a problem than Congress, Bret. He is just easier to see and easier to criticize.
Another round of Bret serving up demonstrably false information and Gail giving him a pass on all of it. These highly sterile "conversations" are the pinnacle of milquetoast journalism.
3
No screaming going on here, it's time for to pay up for fouling everything without thought for future generations. Since industrialization and more recently, the corporate Reagan presidency, inequality is rampant and demoralizing. It's time for the rich to pay up and especially, for all of us to gain the skills we are going to need to survive in a post corporate, digital world.
If we must have tax cuts, cut them for the poor and middle class. The rich can eat cake.
1
Your mutual irony in trying to make sense of our 'bull in a china shop', fun and all, stops abruptly when we consider the systematic trampling of the constitution, and the thrashing of a modicum of decency in Trump's mafia- encumbered White House. There is no rhyme nor reason to Trump's tweeting, divisive to the extreme, all to keep his 'base' of, by now, suspects of willful ignorance and prejudice. And speaking of a misunderstood loyalty to a pseudo-fascist, has their conscience gone awol? Have they lost the ability to discern fact from fiction, a lie from the truth? The credibility of the U.S. has been damaged, it's repair may last 'forever'.
1
Trying to soft sell the Republican agenda, in any way shape or form, is buying into the double-speak of the oligarchic right. They could care less about the issues that they use to separate us (religion, gun control, immigration, abortion, health care, taxes, infrastructure, ya-da ya-da) and count on the ignorance of their base to get elected so they can continue rob from the poor......punkt!
Alluding to the idea that tax breaks for the wealthy will improve the overall economy had been debunked so many times it's amazing that it's even talked about, as if it still has any credibility.
https://krugman.blogs.nytimes.com/2017/10/14/lies-lies-lies-lies-lies-li...®ion=opinion-c-col-left-region&WT.nav=opinion-c-col-left-region
https://www.nytimes.com/2016/08/13/opinion/campaign-stops/trumps-misguid...®ion=opinion-c-col-right-region&WT.nav=opinion-c-col-right-region
1
No tax cut giveaway until fraudulent trump shows us a recent tax return!!!!!
Gail, I know this title came from you. It really makes me chuckle, thank you!
After reading the first couple of grafs of Stephens's blather about how tax cuts for the rich will act like nitrous oxide in "Fast and Furious," I figured, Well, let's go straight to where Gail mentions Kansas, and Bret's response.
So I did a "page search" for Kansas and -- nothing, nada, zip, zilch, zero.
Jeez, Gail, I really expected better. Now again, I haven't read the whole piece, but failing to mention the "Kansas Experiment" (not to mention the Bush Tax Cuts Experiment) in a piece about taxes is like a chocolate chip cookie without the, um, chocolate chips.
2
“Yes, it’s “trickle down” economics. No doubt most of our readers agree with me entirely!”
Bret, it’s not that we readers disagree with you, it’s just that most of us have this annoying little habit of agreeing with facts. There is too little space here to cite all the economic studies that have clearly dispelled the notion that “trickle down” is an effective means to jumpstart an economy. But if you don’t believe me, may I suggest you read the research in this area for yourself, much of which has been published by your own paper (and your former paper)....or better yet, just invite Paul Krugman to join you and Gail for your next little chat.
2
Gail, Brett, next column, could you share with your readers the "10 good people left in this wicked city."
Reading this after reading David Brooks's column about conversing with fanatics, I wonder: would Mr. Brooks be willing to stage an example of the love and tolerance he recommends? This is pretty easy to do (and entirely inconsequential) when the discussion is between two centrist pols such as Collins and Stevens. But Brooks and, say, Bannon? THAT I'd like to read.
Off shore repatriation will save the richest most profitable companies $800,000,000, and THEN discard ANY TAXATION on future off shore wealth.
The 500 companies that Trump owns have pass throughs that will generate one third of a ta break for Trump.
The proposed tax plan will generate $8 per week for the average family earning 40k to 50k
Facts are hard to come by in these gentle tit for tat baloney articles
grrrr.
The rich DO NOT pay more taxes. Please stop spreading this untruth. We are not imbeciles out here. In dollar amounts they may pay more but that is because they make such a disproportionate amount. And even that isn't true because so many ways the rich generate income are not even taxed or taxed at such a marginal rate it's absurd. In real terms they take an inordinate slice of the pie and return only a small percentage.
When Mitt Romney pays 11% on his millions of dollars in income and I pay 34%, please tell me how that is fair? The 34% is much more material to me than it would be to Mitt Romney.
This argument is idiotic. Stop saying it.
2
More ghoulish than Steve Bannon? I’m going to the office party as Harvey Weinstein.
bret's first salvo says it all. he is a true believer and cannot be reasoned with..... Gail? i hope you read david's column before this exchange.
Oh, for the love of Pete, can't Stephens stop mindlessly repeating GOP talking points? No credible economic analysis supports the myth that additional tax cuts will result in economic growth. Why does he refuse to criticize Lyin' Ryan for talking about the "pay increases" labor will get from the proposed tax giveaway to the rich? the rich pay a disproportionate share of taxes? compared to what, what the poor pay? How stupid is that comment!
next nominee for dumb comment - blaming dems for not getting on board with this tax cut for the wealthy, lamenting the filibuster and pining for the good old days of bipartisanship of the 80's. This is just insulting - Brat - did you forget about Newt Gingrich & the rest of the GOP gleefully adopting the politics of personal destruction?!? ayeeah!
next up - Bret only worries about deficits when Dems are in the white house, oh I mean, in periods of slow growth - you lying liar. next up.
Suggestion that debt to GDP ratio was up during Clinton boom altho completely caused by Reagan & Bush I tax cuts.
But wait, here's the whopper: "Republicans have spent the past 60 or so years trying to dissociate themselves from their nativist, isolationist, ethnonationalist wing only to fall right back into it." That actually hurt - um, no, repugnant-cans have actively cultivated this in cynical play to win over evangelicals, racists and rural white ignoramuses to win elections. Just. Stop. Pretending.
2
Oh, dear lord, more of the same poisonous "trickle down" koolaid the Republicans have been serving for 35 years. How long will voters continue swallowing it?
1
This is an unfounded and baseless outrageous attack on pistachio ice cream. Brett: it doesn't come from Iran (anymore). As my father told me about my first raw oyster: "Try it. You'll like it!". I did and you should too.
It's funny how ALL Republicans claimed that despite $340 billion in tax cuts in Obama's stimulus bill that NO jobs were created, but THEIR tax cuts will create tons of jobs. Hypocrites or liars?
1
Why can't the Democrats go on national TV and start attacking the GOP plan? Do you mean to tell me CNN wouldn't accommodate a TV Special: Tax Reform update and answers forum?
How is giving the Top earners a 20% savings and people who earn $60-$150K an extra $1000 dollars [annually] Tax Reform? We are getting taken to the cleaners and our Democratic Leaders are letting them get away with it!
What is the Democratic Leadership doing all day? I understand the significant social importance for LGBT owned car dealerships- low cost housing for Syrian refugees and free healthcare for undocumented immigrant workers- I get it! And I believe with all my heart these things are in our best interest to provide- but that's not where the fight is right now! We can get to that later!
1
Bret: Still believe in trickle down? How about the tooth fairy, Santa, and the Easter bunny? Believing in them is on par with believing in trickle down.
1
What if 3%+ growth in our GDP with minimal inflation just isn't going to happen in today's highly automated global economy? What if the aggregate handicaps of our declining public education system, crumbling infrastructure, frozen middle-class wages and costly health care system make the US less than competitive with Europe and Asia? What are we willing to do to address these economic weaknesses?
3
1) Kansas, Kansas, Kansas!
2) Deficits only matter when a Democrat is in office
3) The #PLIC sent his troops (Gen. Kelly) into the face of the canon - and his troops followed his orders.
Oh, and I think Mr. Stephens needs to find a good pistachio ice cream maker.
4
I can tell you where my supposed $4000 would go - mostly to pay for rising health insurance premiums, copy and deductibles. Oh and property taxes and car insurance. If anything is left after that then it goes towards my kids college expenses which go up 6% per year. I'm sure all.of that will really stimulate the economy!
2
"Nobody thinks of Carter-era stagflation as a prosperous time for the United States, but the debt-to-G.D.P. ratio was low: just under 31 percent in 1980 as opposed to around twice that in the middle of the Clinton boom".
I remember the stagflation years. Strangely enough during those years I was paid a living wage at a part time job and college tuition was 300.00 a semester. Rent was about 125.00 a month. Now, the average part time minimum wage job won't pay for the text books let alone rent or tuition.
7
Some things all the bleach in the world won’t wash out. The featured example is the fervent religious belief, belied by ALL evidence of past experience, that tax cuts for the rich stimulate the economy.
Bret doesn’t know how to quit that dysfunctional relationship, and even their opposition to Trump doesn’t impel Bob Corker, John McCain, Lisa Murkowski or Susan Collins to do so, either. Every one of them were fully on board for the budget fiction passed through the $enate.
Bret’s laughable example of stimulating the economy by building second homes reminds one of that moment in the 2008 campaign when John McCain didn’t seem to know how many homes he owned. The answer turned out to be seven, by the way.
Bob Corker went along, despite his insistence that he would never vote for a plan that would increase the deficit. Every Republican tax cut in history has done just that. So where was Corker’s devotion to principle? Was it in the same płace where John McCain’s putative devotion to “regular order” in the $enate, where his fervor for bipartisan compromise was trumped by his devotion to blindly cutting taxes for the rich?
The Republicans are one trick ponies, and the trick isn’t very compelling.
5
Only in America the same lie can continue on forever: letting the rich keep more money so their investment creates jobs. That was true in America a century ago! Nowadays all the do is make market bubbles! The rich already have plenty of housing and a lot of their purchases are foreign made products.
This lie keeps going on because plenty of idiots believe that owning a BMW or a"McMansion" makes you rich. You need a high income to get them, but if you still need to fall in debt to acquire them then you are not rich. You are a upper middle class, impressive to most people, still a far cry from the rich.
BTW, Regular people also buy a lot of foreign products, we can't do otherwise with electronics and more. But our cars are far more likely to be made in here. We never travel abroad, get out of the upper East coast and ask people about their vacations.And it is us who build and buy houses.
2
It was William F Buckley who tried to rid the Republican Party of the KKK and John Birchers. The 'modern' Republican Party went back to courting the racists and xenophobes before Trump and Bannon. Bannon has weaponized that group - they are not a majority but they do vote and they have out-sized power because of jerry-mandering and the Electoral College (which is way past it's 'sell-by date').
I don't know what will happen -Trump has ruined more than the Republican Party but the way back has to start with them.
5
"They create jobs when they build a second home", as opposed to, say, giving more tax cuts to middle class families so they can create jobs when they build their FIRST home? What a clueless - and typical - GOP comment.
5
The rich will not spend their way to a better economy for all of us. As for the “disproportionate” share of taxes that they pay as a group, that’s true, but that does not mean it’s unfair. The price of bread is the same for everyone. It’s a very tired and misleading argument. And by the way, the Reagan GOP died in 2008.
3
How many times do you have to be told that there's no correlation between tax rates and economic growth, Bret? And no, when the rich "sock it away" it's not the same as spending it. Investment is good, but it really is only productive when a decent return on it is to be had. And to get that in this consumer economy, the vast hoards of ordinary people have to have incomes adequate to allow them to buy stuff at the needed rate. Tax cuts work against that, because under Republicans they inevitably end up with the lower ranks shouldering more of the tax burden and less able to buy things.
6
I get Bret's point about the rich possibly investing their tax cut. But neither rich nor middle class will invest if they do not see a market for their product because the middle class - who, broadly defined, represent the overwhelming majority of Americans - do not have much disposable income. Recovery must be demand based and then, whatever the reasonable tax rate is, people will invest in goods, services, infrastructure, employees, etc.
2
I find it odd that the Gail is asked to try to match wits with Bret which she is totally incapable of doing.
1
"the Gail"? I find it odd that you think you know Bret is smarter.
3
How about the Republicans pay us all back for their $4Trillion wasted war?
Seriously, every single republican voter, fatcat, pundit & politician who not only supported the Iraq War, insisting Saddam knocked down the Twin Towers, & then relentlessly, mercilessly mocked & derided the minority of us who were flabbergasted that the entire Republican operation, & virtually every single one of its voters fell lockstep into the Neocon's hoax, has to now pay us back.
Tax Cuts only for those who didn't support the war. Those who supported it get nothing until they've paid back every penny of that war.
Seriously, they claim we'd be less likely to march headlong into ridiculous wars of choice if there was a draft & people had skin in the game, how about it comes out of your hide if you insist on committing the nation to wars clearly cooked up under manufactured pretext to benefit profiteers & to manufacture political consent.
As it stands not a single warmongering mega-rich pundit who used their ill-gotten influence to twist & sustain public opinion in support of the Iraq War even admitted they were wrong, except a meaculpa from Glenn Beck long after he was fired from FOX. Not a single neocon fatcat or pnac ideologue ever relented except maybe Kristol & it took him 10 years.
You promote obviously bogus militaristic escapades that cost $Trillions, you should be forced to pay us back.
2
No-bid contracts should be illegal too. That is one reason the Iraq debacle was so expensive. Halliburton got to charge whatever it wanted.
3
From a purely economic standpoint it is worth noting that, absent very high taxes (which the US doesn't have):
Cut taxes on the rich is ONLY a good idea if there is a shortage of capital to take advantage of ideas and idle workers.
Cut taxes for the middle is ONLY a good idea if there is a shortage of demand for goods and services leading to idle capital and workers on the sidelines.
Both of these ideas are only viable IF you have a solid plan to pay for all the important stuff... Infrastructure bill and healthcare subsidies anyone?
6
I am not at all sure that the rich pay a "disproportionate" share of taxes. Do they pay more--of course. But, what do they get for their taxes? It takes a lot of government support to amass and enjoy a fortune these days. How much exactly--that would be a very interesting calculation indeed.
5
Funny how Bret parrots the line that lower top rates and corporate rates will lead to higher growth. There is zero evidence for this belief. Even business people don’t believe it. They will certainly invest if they see more demand, but nothing in this plan will increase net demand, so I don’t see this great book.
It is obvious that new demand will need to come from those lower down on the income scale, and this plan will not provide that relief. There is a vague promise that employers will increase wages, but simple economics tells us that wages go up on demand for labor not because your boss just got a tax cut. I have never offered to pay more for a cup of coffee just because I got a raise.
3
I'm a reader who doesn't agree with Bret about trickle-down economics producing growth. Look at recent examples--Kansas, no growth & big deficits:the tax break on overseas corporate profits,, increased dividends & stock buybacks; the Bush 43 tax cuts, the financial disasters of 2008-09. ( Bret, check with your colleague Paul Krugman for more examples.)
I agree with Gail, they will "sock it away"---Switzerland ,Cayman Islands,etc
5
There’s a tone early on in your conversation that seems to suggest we were operating along bipartisan lines before Trump. That was not the case.
I’m horrified Trump is president and voted for Hillary. But Republicans have been demonizing Democrats (and important public institutions) and the Democratic base has been demonizing the Republican base (and demonizing or low-rating important private institutions) since the mid-1970s.
This demonization paved the way for Trump and it has to stop. Also, I’m interested in moving on from Trump but not in returning to the status quo ante as to what Ds and Rs stand for.
If the idea is to return to the halcyon days where Rs peddle tax cuts, dereg, and exceedingly flexible labor markets as the panacea for whatever ails us and Ds do whatever it is that they do besides protecting Medicaid and Medicare and demonizing men (sorry, demonizing “males”), count me out.
I forgot about Obamacare and Dodd-Frank there for a moment - because while Ds passed those bills they didn’t bother to persistently explain the benefits and structure to us, didn’t stand up for those bills politically over time.
1
Call this what it is: Destroying Medicare and Medicaid and the constant failure of trickle down economics. The middle and working class will lose again and the GOP's plan to further dismantle the US govt. will be enhanced again. 'We' paid into safety net programs all our lives and to renege on the promise is just plain robbery.
41
Fewer number of tax brackets is regressive. It increases the tax burden of lower become brackets and reduces the tax burden of high earners.
Funny how Republicans sell this - they claim fewer tax brackets makes preparation easier. That’s calling the American people stupid and unable to do basic math.
6
Shorter Bret Stephens: “I support tax cuts for the rich which explode the deficit and stiffing everyone else. As a Republican it’s pretty much all I care about.”
6
Huckabee Sanders==ooohhh what will you do with $4000. Better to ask bottom bracket which utility will be cut...water or electricity? taxed 2% more? Abominable
2
Gail, I love you. But Brett Stephen's sparing partner on this matter should be Paul Krugman the NYT's Nobel Prize winning economist. Mr. Stephens is still stuck on the fantasy that rich people will invest their tax savings in the economy rather than save it or ship it to off shore accounts. I'm sure there is some investment. But the data from all of the trickle down tax cuts is unamigious. It doesn't work.
Let's see how Dr. Krugman would handle Mr. Stephen's analysis. That's an unfair fight we deserve to see.
6
My god, shame on me for thinking I could get through a NYTimes article without hearing about "economic anxiety".
COAL JOBS AREN'T COMING BACK.
3
If coal mining were to expand it would be done by robots, much cheaper and more efficient than aging humans.
Party of Sanity. Sounds wonderful. Where do I sign up?
This whole tax cut fever is a total canard. It is just a tax cut for the rich and the middle class will wind up paying for it in numerous ways.
Here are some of the brilliant ideas that would stick it to the middle:
- eliminate the tax deductions for state, local and real estate taxes which are huge deductions
-cuts to Medicare and Social Security
-major cut to the amount people could save in their 401K- major stupid
I hope the media finally starts to shed a harsh light on these damaging proposals. I know the media likes the latest shiny object of distraction by DT like the Gold Star phone call debacle. I get that.
However, we are being deprived of the substantive reporting on the damage the tax proposals could do to the middle class.
This is the same pattern of media negligence that allowed the daily stupid distraction of DT during the campaign that helped to get him elected.
Thanks Gail for bringing this to the forefront and let's keep the national discussion on important topics that routinely get ignored.
6
Bret Stephens - it's a big concern when a supposedly educated person thinks trickle down economics works. Show us the facts to back up this claim. Explain the states of Maine and Kansas. Help me to understand why if the wealthiest Americans are already getting richer faster why we haven't already seen your magical 3% job in the GNP? And while you are giving big tax breaks to the wealthiest Americans you are taking away from everyone else - tax deductions, monies for infrastructure, or the real big one - reducing Medicare which we have all been paying into! You are not that far from Steve Bannon!!
6
Supposing the Rep party gives up both its crazy nativist sentiments and its voodoo economic agenda...what's left?
3
"When the rich “sock it away,” that only means that they are spending or investing, which is to say, putting the money into the real economy just like everyone else. "
No Bret, black isn't white. "Sock it away" means keeping it for themselves. Do you think readers just fell off the tulip truck to believe what you say just because you say it?
5
Party of Sanity. Yes. It's time for Moderates to join forces, before it's too late. "E pluribus unum," the patriotic motto. Mr Trump will not be satisfied until the entire country is down in that gold-lined gutter with him -- just look at Gen. Kelly. C'mon Center, give it a try and HOLD. Show some courage already.
1
Geez Brett, thank Gail for going easy on you, but I can't let this go unchallenged: "Yes, it’s “trickle down” economics. No doubt most of our readers agree with me entirely!" You're irony is well taken, not many readers agree with you--this has been tried and refuted several times. Aside from it directly benefiting the wealthy in the very short term, why do you still believe it is a good thing? Really...show me how it works. I don't get it.
4
"Yes, it’s “trickle down” economics. No doubt most of our readers agree with me entirely!" Comedy gold!
1
What a pitiful screed of whining comments. Where is the real thought about the 'headline', tax cuts? We have a government determined to rob Peter to pay Paul. Paul won't complain as long has he feels he's getting enough. However, Peter is tired of this nonsense.
Remember when Carter tried to tax the rich to help the poor by taxing luxury items such as yachts? The rich stopped buying yachts and who got penalized, the workers. Problem worse, not better. Think about the unintended consequences of taxes, not what you think you see at the end of your nose.
Stephens is either totally ignorant of economics or totally disingenuous. His defense of trickle-down economics and pooh-poohing of deficit spending as long as it is on tax cuts for the rich is such pure nonsense someone should bottle it and spray it on him in 3 years when his party is wailing that we can't afford healthcare or social security or food stamps because of the exploding deficit.
2
Some people still think “trickle down economics” is real?
2
Great comedy from our esteemed onservative Bret Stephens. The rich pay more so they get more cuts. Entitled to them! Ha!
It is time for socialism. It works in Europe. Everyone gets to benefit from the vast riches of western countries. Here, only the rich benefit, with the help of loop holes, deductions , and highly paid accountants. The rest scrape to get by.
Student debt, medical debt, and credit card debt to pay the other debt and maybe to get a new phone if there’s any credit left, and the credit agencies haven’t destroyed our rating because they didn’t spend enough in security to protect us. Greed. The rich need to share the wealth. They just can’t have it all any longer. France settled this problem with the guillotine. You can only have so many houses. People are suffering. Some of them even voted for an unknowledgeable, uninformed ninconpoop. Nobody knows what to do so they risk their country on an unstable man. It’s that bad. The only answer is a switch to a fair system that divides the wealth up better. The rich will still be plenty rich. They’ll also get to keep their heads.
2
Ordinarily I am a huge fan of Gail Collins and her efforts in "The Conversation" but today's column was terrible. Bret Stephens' assertions about tax cuts spurring economic growth were completely fact free and have been shown over and over again to be so by the NYT's own Paul Krugman. Let Bret and Paul hold the next conversation so your readers get the facts.
2
good discussion but economically illiterate. The US economy suffers from lack of demand caused by student debt, excessive medical charges and poor infrastructure (people cannot live near jobs). None of that will be changed by tax cuts. The idea that giving already fat corporations and investors another few billion dollars will lead to growth is a heritage foundation fantasy.
59
So why doesn't Ms. Collins point out the obvious historical fact that tax cuts never lead to economic growth? The economy grew not when Reagan cut taxes, but when he raised them. It grew under Clinton, who also raised them. It died under Bush, who cut them.
2
Tom Daschle and Tom Brokaw were on TV last night and Tom Daschle said that when the planes hit the World Trade Center on 9/11, the leadership in the Senate was in a meeting about the Surplus. Imagine that. And then remember how we got there.
1
This has become lame. Stephens is regarded as a good conservative because he doesn't like Trump, so Gail suppresses her intelligence and wit and treats him like a reasonable human being. But he smugly supports all the misguided and devastating policies of the last 30 years. I'll take Bannon in a second if he got rid of all these guys.
"Those of us who subscribe to some version or another of moderate conservatism are going to have to find a new political home, either alongside centrist, Clinton-style Democrats — who, I hope, will hold the Democratic reins in 2020 — or in an entirely new party, the Party of Sanity."
Indeed. America is now a de facto three party country: the left, the center and the right. Each has different concerns, and is experiencing great ructions by trying to shoehorn three feet into two shoes.
Bret: If I'm making several million a year and get a tax cut of a couple hundred thousand exactly what am I going to buy that I couldn't buy before? These people already have essentially unlimited buying power. This is a ridiculous argument. Find some other way to stimulate the economy.
65
Three ridiculousnesses of a ghoulish pre-Haloween conversation (just mentioning Bannon's name gives me the creeps).
Bret's macroeconomics for idiots:
1) “a sense of economic anxiety that has exploded into fury”
2) “They create jobs when they build a second home or become angel investors.”
The first is a manufactured fury built on a relatively easily reformed problem – a combination of support for Obamacare (including care for mental health and addiction) along with a major infrastructure bill providing jobs, and of course reasonable support for education at all levels. And remember, all but the inherited wealthy always have some degree of economic anxiety. Capitalism intensifies this by its inhumane decision-making about automation, factory location, and profits at all costs.
The second is absurd – more jobs would be created if everyone without a first home built one, and investments would be funded if jobs paid enough so more people could save and invest. We don't need trickle-down. We need higher minimum wage standards, and a tax system that helps create a fair society -- yes, that same society that provides the context for the rich to get rich, remain safe, breath clean air, drink clean water, and raise children in a humane world.
4
Bret,
Ha ha ha ha ha ha ha ha ha.
So much amusing stuff.
At least Gail seems concerned about the direction this country is headed.
4
Oh for God's sake. I pray that would could all, like Bret, live in The Land of Republican Fantasy, where tax cuts on the wealthy trickle down like gentle rain, all essential services pay for themselves, the multi-trillion dollar debt is wiped out, the deficit disappears, jobs and health care magically materialize, the military budget goes up, etc, etc,, etc.
But I don't. I, like everyone else on Earth (except the lying shills that are promoting this huge boondoggle for the wealthiest) live in reality. A state of mind that Republicans apparently feel no need to even visit.
3
Best line of this dialogue (and I can't believe it came from Bret) - "wrong on fact, wretched on principle, and dumb as politics." Pretty much describes this nightmare Presidency we are living through.
“They create jobs when they build a second home” - whilec avrage Americsns can’t afford healthcare without a subsidy, rent, or even to buy a first home. You also failed to note the lowest tax bracket increases to 12 percent. The middle class and poor will pay for the rich’s second home. Hold the praise about columnists getting better with age - maybe like some wines they just turn to vinegar.
6
You scream, I scream for Vladimir Putin and/or Benjamin Netanyahu to disclose to the American people Donald Trump's personal and family income tax returns and business records so we can ascertain the impact of the looming income tax scam on the House of Trump.
You scream, I scream for reforming a federal income tax scheme that gives deductions, credits, subsidies and lower tax rates. But only for certain industries, sources of income, transactions, business entity structures, contracts and securities favored by lobbyist for special interest corrupt crony capitalist corporate plutocrat oligarchs buying our legislators, executives and judges obedience. Congress is a House of Lords of current and wannabe millionaires.
Instead of worrying about what is illegal in America we should be primarily concerned about what is legal.
2
Gail's second comment is jaw-dropping. She concedes that tax cuts might help the economy (something the Left routinely denies and has until now convinced me is Right wing gobblegook) then lets slip that she actually WANTS the US economy to fail, "lest Trump will totally take the credit". I dislike Trump too, but this is Trump hatred run mad. You actually want your own country's economy to fail and plan to take active steps to ensure it does fail (inflicting suffering on milltions) for fear that Trump might "take the credit" if his policies are allowed to succeed??? This is so gobsmackingly insane I have been trying to re-read Gail's words, telling myself that "credit" must mean "tax credit." But no, she really does want her own country's economy to fail. This makes Trump look not only wise but benevolent too (an amazaing feat!) Arguments like Gail's will deliver him a second term.
1
"Republicans have spent the past 60 or so years trying to dissociate themselves from their nativist, isolationist, ethnonationalist wing only to fall right back into it."
Is this serious, Stephens? Are you asking that the reader take this as a belief you sincerely hold?
There's a straight line from St. Reagan to Trump, Bret, and you don't even have to draw the line yourself, it's right there! Just LOOK at it!
3
Bret states, "If the rich benefit disproportionately it is only because they pay a disproportionate share of taxes."
This does not appear to be accurate.
In the latest tax plan, over 80% of the permanent cuts go to the top 1%, whereas they pay around 40% of the federal taxes.
Can we get some fact checking on this site? I am weary of columnists shooting from the hip, while the corrections come days later, if at all.
3
What is it that is so hard to "get" on the stupidity of Republican tax proposals? Many commenters have written clear and detailed explanations of why Voodoo Economics never works, never has worked, and never will work.
Well, the Republicans DO get it. Their money men--Kochs, Adelson, Mercers--want tax cuts and, by god, they are going to get them or they will find someone else to fill the empty spot, er, empty suit. The elected Republican shills pushing this garbage have made a deal with the devils. Gosh, when I look at and listen to Mitch McConnell, I see a man nearly salivating over the earthly delights awaiting him once he satisfies the ogres' appetites. His face must be somewhere in Bosch's paintings.
Knowledgeable, reputable economists make the sound arguments again and again. The arguments don't make a difference because they (and we) are howling at the moon. The real arguments to be made are get rid of Citizens United now, craft a real Fair Elections law and get the big money out of elections, get rid of gerrymandering, and, just for icing, get rid of the Electoral College. These are heavy lifts, and all of us who don't buy the hogwash must participate in the lifting. If this goes on too long, if people are living under bridges and eating spam while the Kochs, Adelsons, and Mercers are partying down at Versailles, we will see a revolution. That won't be pretty.
Note: we are suffering under a Tyranny of the Minority.
3
He stated"the party of Reagan" as though that was the apex of GOP accomplishment. Iran-Contra was an act of treason, but who cares about petty details? Let's ad his face to Mt. Rushmore
I wonder if Truman's implementation of the Marshall Plan had anything to do with the eventual collapse of Russian communism? Just saying.
1
Republicans trying to dissociate themselves from their base? I know you said, "wing," Bret, but without that, "wing," Republicans can't win, and they've known it since Nixon/Atwater. They haven't tried to "dissociate themselves." They've made expanding that base an art form, and now you and all the others who looked the other way during the Republicans' long march to hate and bigotry are aghast at having to rub shoulders with the ugly truth. Maybe if you had worked as hard at opposing the trend as you are at denying it, we'd be on higher moral ground. As it is, the swamp water is rising faster than anyone can bail and the White House and congress are awash in moral turpitude. It didn't happen without plenty of Republican establishment support, most especially from you beloved corporations and plutocrats.
3
Despite all history (read Krugman) Bret still drinks the Supply-Side poison.
What he won't say is that GOP plan, as with Reagan, is to explode the budget AGAIN, then claim that Social Security and Medicare must be destroyed.
3
When is the Times going to get serious? Krugman sits over here telling us that the conservative ideology on economic growth from tax cuts is delusion. Stephens, in the same issue, cranks it out again. And Collins makes some sort of lame joke about Bradley. When will these people actually do what Brooks seems to be suggesting this very morning: talk to one another. If we can't get Krugman and Stephens to reach some sort of meaningful rapprochement how can we expect the rest of us--who are, by the way, choking on our own ideologies and our own ideological chasms.
1
Would the Times please stop reporting on this as "Tax Cuts" Just as "Climate change" implies a gentle graduation of events when in fact it is the radical destruction of our environment, "Tax cuts" imply a rational and reasonable reduction in taxes. According to economists, this budget would give trillions to the top .01 percent while giving the average American about $50/ month in breaks. That is not a tax cut, that is a egregious miscarriage of justice. This is a democracy. We were founded on "No taxation without representation." Donald Trump is not the CEO of the United Corporations of America. This is America -- a representative democracy where the needs of the people are central - or should be central, not the greed of the 1%. We need a complete reversal of climate destruction, money poured into alternative technologies like solar and wind energy, we need massive infrastructure improvements and fixes, we need public schools with state of the art technology and we need clean and beautiful parks, not exploited by Trumps opening them up to mining and logging. While Trump is a broken record about respecting the national anthem and the flag he needs to wrap his head around what they represent. Land of the free. No one is free when they are in bondage with debt, poverty, oppression. There is no America, there is a dictatorship. This is not a tax cut, this is a coup on the American people. @johannaclear
2
Mr. Stephens, one word: Kansas
3
I do not understand the foolishness that people engage in over tax cuts. TAX CUTS WILL DO NOTHING BUT BANKRUPT US, MORALLY AND FINANCIAL, ASK KANSAS. The rich will not trickle down, they already have everything. They do not need a hand, the corporations are already feeding on the corpse. Wake up!
3
Why is anyone still talking about "trickle-down" economics when IT DOESN'T WORK?
Mr Stephens: you might as well just believe in magic beans.
3
The idea that "Republicans have spent the last 60 years or so trying to dissociate themselves from their nativist, isolationist, ethnonationalist wing" should disqualify anyone from membership in a Party of Sanity. Let's stop pretending that Trump came from nowhere shall we? That truly is fake news.
1
Waiting for coherent policy , from this White House, on anything is exactly like waiting for Bordeaux. Theater of the absurd.
As a lifelong Democrat, I too hope that centrist liberals hold on to the party. I find Sanders rather odious and that's why I voted for Clinton in the primary. Which is one reason I find the Sanders people idiotic for claiming the DNC done him wrong. Rank and file Democrats came out to vote in the primary and we wanted Clinton. And I can see where it might be useful to have four political parties - maybe two "centrist" Democratic and Republican parties along with two left and right wingnut parties. Trump's election and subsequent effort to destroy all that came before has, for me, exposed the weaknesses of our "winner take all" system.
Kansas: that's all you need to say about the GOP tax ideas. Kansas has previewed it for us and even that reddest state revolted against it. They LOST tax revenue. They had to cut services including cutting the school year (way to go, party of family values -- go after our children!). And in terms of economic growth? Yet again a clear demonstration that trickle-down fails. Kansas won the booby prize: 50the place out of state economic growth.
Great idea: reward the rich and the bounty comes trickling down like rain. But it doesn't. If no one has noticed, the wealthy are doing just fine, raking in more and more of the total GDP every year. The wealthiest have all the money they need, it goes to overseas bank accounts, invests in global companies that move their factories overseas (got to send profits home to the stockholders)......
The rich are not investing in significant jobs in America. They invest -- and the global companies share out their profits to their shareholders. Any investing is in automation. (Notice the US is all behind driverless cars -- just think of those jobs leaving. Anyone shopped at any big box store? Automated checkouts -- cashier used to be a reliable job.)
1
Amazing to Stephens, Rubin, Gerson, Brooks, and a few others these days. They write more and more like intelligent Democrats. Perhaps all reason hasn't left the GOP, only reasonable people.
1
Bret: So here is where we get to the root of our differences on taxes. When the rich “sock it away,” that only means that they are spending or investing, which is to say, putting the money into the real economy just like everyone else. They create jobs when they build a second home or become angel investors in a promising start-up or reinvest in their own businesses. Yes, it’s “trickle down” economics. No doubt most of our readers agree with me entirely!
You don't really think that a rich person investing money into the stock market has the same effect on the economy as a lower-income person spending that same amount of money on actual final goods or services does, right?
If that's your hypothesis then you have lost all credibility and need to stop writing about taxes, economics, and finance.
1
It's so interesting that Mr. Stephens hopes for a GOP party of "sanity" while wholeheartedly embracing the myth that corporate tax cuts and trickle-down economics will benefit workers. It is this voodoo economics that resulted in the voter's rejection of all mainstream GOP candidates last year, and the election of Trump. Strange how Republicans keep turning a blind eye to the fact that you can't keep on kicking workers in the ditch and then expect them to vote for more of the same.
1
Stephens misses the relationship between consumer demand and investment. Investment does not happen in a vacuum. Let's not forgot that rich people have another option for their money: Hold it as cash or buy government bonds. Maybe plow it into the stock market and blow up the value of stocks. Corporations simply hold onto cash. No change in the real economy. In this low demand environment, that is exactly what is happening. Is Stephens really supporting the notion of trickle down economics, where the top 5% get second (third?)homes and yachts and a paltry few jobs get created? Go ahead and show your true reptilian character, why don't ya!
"Today it’s the so-called establishment Republicans who have fallen in love with their mad captor." While I enjoyed and learned from this dialog, I was troubled by this line. From everything I've read, traditional conservative Republicans are dismayed by Trump, not in love with him. They're quiet only out of fear of being primaried.
Let's think about the future, if only because we can pretend that sanity might return. We can hope that it will.
Here are a couple of possible candidates for 2020 who have nothing to do with the ugly disfunction of today:
Governor Charlie Baker of Massachusetts, a level-headed, reasonable, intelligent Republican.
Senator Sherrod Brown of Ohio, a level-headed, reasonable, intelligent Democrat.
Neither of them are old (relatively) and tired. Both are a new generation of
ideas and personalities. Take your pick. Or find some others. We desperately need to focus on taking back our country and our political system and jettisoning all the politicians who are driving us into a ditch. Have driven.
1
How many times does trickle down economics have to be disproven in practice before Republicans admit it does not work? In the famous words never written or uttered, if a conservative motto fails in Kansas, it can't work anywhere.
2
Don't we all know by now, Trickle Down Economics doesn't work.
Mr. Stephens, this is rich: "Republicans have spent the past 60 or so years trying to dissociate themselves from their nativist, isolationist, ethnonationalist wing only to fall right back into it."
Sure, sure. And then Trump sprung fully formed from the head of Steve Bannon! I'm baffled as to how that could have happened!
Maybe you have tried to disassociate yourself from that wing, but many Republicans embraced it and encouraged it. And, it's all over the media arm of the Republican Party, Fox News.
I applaud your efforts to get away from the racism and instead embrace science denial and voodoo economics. You're truly a gift to this editorial page.
2
These tax cuts will destroy retirement as we know it. in order to give the richest Americans a tax cut, it is proposed to limit the amount regular working people put into their 401 accounts. Younger workers are counting on those 401s to fund their retirements because they think Social Security will collapse. With this tax cut it just might. Paul Ryan wants to do away with Medicare, Medicaid, and Social Security. (Don't worry, that won't affect the ample pensions available to the Congress.) When this lop-sided tax cut really hits home - via the deficit - none of our entitlement programs will be sustainable. Even a huge tax increase at that time won't make them viable. They won't disappear, but the monthly benefits may be cut by 50% or even 75%. Everyone doesn't love a tax cut! That $1000 you get to keep next year may mean working until you are too old and sick to do otherwise. And the people who will receive those $250,000 cuts in their tax bill (and NO inheritance tax - yeah Trump) will just tisk-tisk over how irresponsible regular people are with their money. Tax cut? Why don't they just pull out a knife?
1
Bret said: "But I think you’ve put your finger on something essential. Bipartisanship is moribund under this president because he’s thrashed the concept and possibility of trust in politics."
Bret hadn't, apparently, been watching the GOP "leadership" in Congress during the two prior terms. It's not Trump who killed bipartisanship - but he's helping to kill the idea that a party controlling both houses plus the executive can get things done. Him and the Freedom Caucus are ungovernable.
Fairly weak discussion. Trickle down mantra. Proof please?
1
The screaming you hear will be your own if you let the Trump administration change tax policy further to their favor.
They will disembowel Social Security, Medicare, Medicaid, education and research in exchange for temporary chump change to the masses and trillions to people who already control the nation's wealth and capital.
1
"it’s necessary for the United States to get back to an annual G.D.P. growth rate of 3 percent or more. " Oh Brett, do you ever ask yourself if this view isn't more than a tad self-serving? Do you ever look for evidence that would support it? I know conservatives are highly religious, but faith-based reasoning generally blows up fast when you're talking about the economy. As others have pointed out, there is little evidence that the economy suffers from lack of investment (and quite a bit of evidence that investors have been chasing ever more spurious opportunities as their wealth has accumulated (dot-com boom, real estate boom, S&L boom). But the slightest sniff of tax cuts certainly does help the stock market, don't it? I'm glad to see you ARE able to discern that the stock market is not really related to the actual economy. And Gail? Why would you let Brett spew such nonsense without pushing for a deeper examination of his views?
Brett, if you really believe that all readers agree that trickle-down economics happens with tax cuts, you are dreaming; that would mean that we have bad memories and can't connect the dots. Tax cuts have never helped the economy, not in my lifetime anyway. Get over your worship of Reagan, we live in a far more complicated world than in 1980 and it requires real leadership and good governance, not just knee-jerk old-time tactics.
1
"This (tax cuts) is because I think it’s necessary for the United States to get back to an annual G.D.P. growth rate of 3 percent or more."
I really can't believe I'm reading this. It's quite the eye opener. Just at Krugman launches another of his salvos against Zombies "who never admit mistakes, and never change their views in the light of experience", we get to meet one in the flesh. Maybe Bret Stephens missed Moody's analysis that Trump's tax plan would increase growth by a whopping 0.04 points. Or maybe he's unaware of what happened in Kansas - no growth just whopping deficits. Maybe it's time for Gail to find a new debating partner. Or maybe it's fun to do a zombie debate every now and again. Or maybe the NYT could buy Bret a ticket (one way, please) to Kansas and ask him to try, really try, to write an honest assessment. His reward - a ticket home. Otherwise he gets to stay in a place that's benefited so handsomely from his espoused policies.
Is there some virus circulating among Republicans that gets incorporated into their DNA? The 'Trickle Down Economics' virus, that, once incorporated into the victim's DNA, can never be eliminated.
Bret, you have no excuses. Your colleague, Dr. Krugman, has explained time and time again how trickle down economics is a farce. Unless, of course, you are one of the victims of the infestation.
1
Bret Stephens spouts the nonsense I keep hearing on CNBC. The FACTS are that corporate America TODAY has more money than they know what to do with. For the past few years Corporate America has record stock prices, record cash on hand, record executive pay, and record low wage to revenue expenses. There is no way that more money will result in their workers getting anything more in wage increases than matching inflation. This has never happened in history.
But it will happen this time, because This Time Its Different.
Want to grow the economy, improve the infrastructure and cut down the National Debt? The answer is actually easy. Pay the workers more. This is a policy that historically works. Earned Income Tax Credit is a crock.
I would love to see Bret Stephens debate Paul Krugman. Make it happen!
I always like the Republican argument that the top 1% are paying a greater share of taxes than ever.
And it is true.
Because they are making more money than ever.
40% tax on $10 million = $4 million
35% tax on $20 million = $7 million
"Figures don't lie, liars figure."
1
Cutting taxes during wartime is suicide. Worse, depending on the Saudis to float our boat by buying weaponry is delusional and counterproductive. The nation has not learned republicans go for the quick buck and leave the figuring out how to clean the slop to someone else later.
In this case, it isn't slop, it is starvation and migration due to war that leads to problems with immigration produced by the likes of pick-pockets like Erik Prince who wish to colonize by invasion weak countries and sticking us with the bill. This myth that conquering smaller fish in the tank to fill our guts has got to be addressed and mothballed.
The United States is a benevolent and generous democracy, not a crushing empire as the likes of Rome or the Third Reich.
Get rid of gasoline and other hidden taxes.. that everyone pays equally and put in or rather BRING BACK THE 10% FEDERAL LUXURY TAX. Why should anyone be able to purchase a 170,000,000 PIcasso or even a 10,000$ anything at auction and legally not pay one cent in tax on it??
That great Reagan Republican WJClinton nixed the last effort to re-instate the Luxury tax. Something about how people weren't buying luxury yachts made in Connecticut.. because they had to pay 10% tax.. (Some people believe everything). and then the question of buying abroad without tax-- hey Virginia, there's this nifty financial instrument called a tariff!!!!
Mr. Stephens,
Please go look at the Sam Brownback experiment in Kansas.
If you have children, it is their future at stake.
Oh Gail. I love your writing, your laser sharp wit that skewers the arrogant with such a soft touch. But I am disappointed in this column. Why are supply-siders like Bret Stephens given the podium to spew their facile and slippery rationalizations for trickle down economics?
He wasn't even terribly creative today. He was, in a word, lazy; repeating the standard drivel about the poor, struggling wealthy and corporations, who need, they just need, to build a second home, with a few minimum wage jobs dangled as bait.
Why didn't you confront him with the one word that surely strikes terror in the hearts of republicans everywhere: Kansas?
Why didn't you school him in basic economics? You made a half-hearted attempt to undermine his magical thinking with a nod to the middle class. We are the drivers of the economy; not the wealthy. We the Consumer make up two-thirds of the economy, but since our incomes have stagnated or declined, the recovery has been (surpise!) weak.
Why didn't you go for the jugular with a recitation of the state of corporate America's balance sheet, showing mountains of cash and record profits that they have somehow managed to achieve (read job cuts) throughout our dismal recovery?
Why didn't you point out that corporations will never add jobs without demonstrative demand for their products and services? They aren't waiting for lower taxes to add payroll. When they use this argument, they should be arrested for crimes against humanity.
2
The current tax plan is a sham. Exemptions GONE!
1) 2016 Taxes – couple under 65 no other dependents
Eliminate $ 8,100 Exemptions
Eliminate $12,000 Standard Deduction
Total eliminated -$20,000
New Standard Deduction $24,000
Actual increased deductions $ 4,000 or 20% increase not 100%
Will pay a little less in tax - Sham
______________________________________________________________
2) 2016 Taxes: Couple under 65 with 2 children
Eliminate $16,200 Exemptions
Eliminate $12,000 Standard Deduction
Total eliminated -$28,200
New Standard Deduction $24,000
Actual decreased deductions -$ 4,000 or 20% decrease not 100% increase Will pay 20% more taxes
___________________________________________
3) see next comment
1
Mr. Stephens: Re your statements on tax cuts, the rich and the economy. I refer you to your fellow NYT columnist Paul Krugman for a primer on how it really works. Enough said,
There’s too much agreement here. What we need is Gail vs. a Trump person like Hannity or the Huckabee woman.
Gail’s comment that Trumpism has driven us together is true, but without sparks there’s no point in a dialogue. Bring on the Deplorables!
1
I love the Sodom and Gomorrah reference and the implication of what Trump is doing to us all. I'm all for a third party, The Party of Sanity.
Geez Gail! You didn’t even present one counter argument to his tired banal “trickle down” plan. We now have decades of proof that income inequality grows when the rich are allowed to disproportionately accumulate wealth. Trump ( who you both don’t like) won largely because of a disaffected struggling middle class continues to suffer because people like Brett Stephens keep getting to pretend tax cuts for the rich will magically (voodoo economics anyone?) help everyone else. It was shameful you let that pass! Oh, and unfortunately the neoliberals, whether you call them centrist Democrats or moderate Republicans, actually have to much in common.
1
Bret's rambling set up for a false equivalency argument continues to be his go-to "conversation" tactic. Just say what you want us to remember, Bret - not the long background story about how your past world views seem to be crumbling down around your ears as you "discover" facts. When you have to read a comment 3 times to put it together, it is clearly not conversational. Lighten up Bret, we're just talkin' here.
Gail, there are many terrific one liners here! Actual LOLs were had. Have we crossed into yet another bizarro universe where pointy headed liberals speak in bumper sticker language while "it's simple, dummy" conservatives ramble on with tortuous logic to a blurry end point? I can see the attraction to bumper sticker logic - clarity and simplicity is fun!
1
ACTUALLY, Trump screams for ice scream and I scream, the filthy residue of his undersocialized childhood history of starting food fights at birthday parties. Trump believes in tax cuts for the 1% FUNDED by the 99%. He's also reverted to trickle up, fluxed up economics. If you asked Donald, he'd Duck his Duty as the Quack President to tell you that tax cuts decrease the national debt. No? Oh well, he lies about everything else! Though once in awhile he confounds himself by accidentally making an accurate statement that is, believe me, entirely unintentional.
1
Tax cuts 'creating plentiful middle class jobs'? Please read the article about our coming (or already present) robot overlords that appears October 23 in another venerable New York weekly publication. The jobs economy is only 10% manufacturing. The middle class is struggling. The lower class is sinking, or has already sunk. Yet Republicans soldier on by parroting 'truths' from another era. 'Sad.'
I guess I should say good job Gail, you followed David Brooks column today.
But nothing was accomplished, no moving forward for "we the people" . No real ideas just the tried and non factual premises of the neo liberals status quo thinkers that keep us in a slow boiling pot and turns it down a little until they turn it up again.
I am SO grateful to Republicans who only want to build second homes so that I can have a job washing their windows.
ThankyouThankyouThankyou.
God Bless Trickle Down!
1
[They create jobs when they build a second home]
I love it. Yes, just think of all the gardeners and maids they will need!
Oh where have you gone Brett Stephens? Over to the other side. Obama was significantly more divisive than Trump.
The big payout. It's not policy, per se; it's a good old fashioned gouging of the cow. An old line industrial procedure... the movers and shakers demand a return on their investment. They'll say and do just about anything to do it. Gerrymandering, voter suppression, fake econ 101, cozy up to right wing crazies, establish a media empire to propagandize, and so on. It's not like the playbook is a secret. Because it's a nation of rubes, easy marks just yearning to be rolled. Why it's as natural as dumping toxic waste in the Ohio river. You bet your screaming eagle, because this is FREEDOM, brought forth with the highest conceivable amperage by the righteous for the faithful.
1
here's my sign for pro tax rally: "NO LORDS, NO LADIES, NO BILLIONAIRE BABIES!" It will take centuries to undo the damage of wealth voting itself into entitled untaxed divine royalty.
Tax cuts will not result in 3% GDP growth. That's more discredited trickle-down theory.
After 35 years of that, I'm getting really tired of being trickled on.
2
Bret, one word: KANSAS. Note MY address. Gail: You ARE Bordeaux, of the finest vintage. Trump is spiraling down, Bigly. Hopefully he won't take the rest of us along. If I believed in God, I'd be praying now. Seriously.
38
I actually agree that the US should cut the corporate tax rate in order to be competitive in the world marketplace.
But the idea that cutting taxes on the wealthy is beyond asinine. We've had tax cuts for the wealthy for the past 40 years -- each time with promises of 3%+ growth -- where's all this amazing growth? The disingenuous answer is that it wasn't enough. Funny how it will never be enough.
I make "only" $100K per year. Please, tax me and those like me more. Otherwise, 50% of my paycheck goes into various retirement accounts so I can retire by the time I'm 50. For the truly wealthy, their money goes to other countries or is wrapped up in real estate and mutual funds that create nothing.
Instead of giving comfortable people more, give it to people who actually need it. People who spend 50%+ of their paychecks on food and rent. Pay off the massive national debt. Build a non-3rd-World infrastructure. Create an educated populace.
THEN let's look at cuts.
1
Bret Stephens says "Republicans have spent the last sixty or so years trying to disassociate themselves from their nativist, ethnonationalist wing." This is simply astonishingly wrong on fact. Nixon devised the great Southern Strategy. Reagan gave out so many racial dog whistles you'd have thought he was operating out of a dog park. Willie Horton is still rattling around the Republican attic. The embraces and kisses between the Republican establishment and the nativist, ethnonationalist wing over the past sixty years have been innumerable. On the other hand, let's not forget the trillion and a half dollar tax giveaway to Mr. Stephens poor beleaguered billionaires.
2
Corporate profits are evidently sufficient to pay CEOs increasingly eye-popping wages. The case that cutting corporate tax rates spurs economic growth is increasingly looking like nothing other than blind faith on the part of Republicans when CEO pay is at an all time high and more than a few companies can think of nothing better to do with their cash reserves than buy back shares.
Donald Trump ran on the idea of draining the swamp and helping American workers. Yet, the best plan is to throw out a massive corporate tax cut and hope for the best?
Why not use tax reform to encourage good corporate citizenship? Why not use tax reform to help drain the swamp?
Here are some possible ways that could be done:
*A sliding tax rate for corporations that rewards job creation and penalizes shipping jobs out of the country. Start the corporate rate at 28%. Large corporations get to reduce their rate by 1% for every 10,000 full-time jobs they create. But, they add 1% for every 1,000 jobs they ship out of the country. Scale the numbers accordingly for small and medium sized businesses.
*Reduce the corporate rate an extra 1% for every point that a corporation reduces the multiple of its the wage gap between its CEO and the median salary of its workers.
*Reduce the corporate rate an extra 1% for every 10% that a corporation reduces the amount that it spends on lobbying year over year.
Bottom the rate out at 15%. The best corporate citizens get the lowest rate.
2
Seriouly, trickle down has not worked for 40 years but let's keep doing it. The inequality in this country is staggering and a very real threat to democracy. Giving the wealthy more money to control more politicians to give them greater wealth has lead us to trump.
Letting the wealthy build their 10th home will not give a higher wage to workers since they can barely afford food and health care as it is.
Tax cuts to the wealth will just exacerbate wealth inequality give more money in pockets that will spend it.
2
Most Americans are probably going to be in for tax cuts amounting to around $1500 which will allow them to pay a few bills and replace their big-screen TVs with larger ones. This is the big deal that's gonna make America great again?
1
I lived in Brazil.
A plumber in Brazil in US dollars makes around US$6,000.
That same plumber for their skills, work ethic, etc. in the US would make US$40,000.
The ratios are similar for most other jobs, nurses, computer programmers, etc.
The US sells a lot more cars per capita than Brazil.
It is a lot more trickle up than trickle down.
1
Splendid comment. Can’t understand why I’m the first recommend.
According to the UAW the following happened in 1954:
Walter Reuther was being shown through the Ford Motor plant in Cleveland. A company official proudly pointed to some new automatically controlled machines and asked Reuther: “How are you going to collect union dues from these guys?” Reuther replied: “How are you going to get them to buy Fords?”
Americans don't need tax cuts, they need higher wages. What good is getting a few crumbs back while the ones who absorb all the wealth continue to take more than their fair share of the productivity of the American worker.
3
The only way to get higher wages is through higher productivity. That's an economic and historical fact.
Higher productivity comes from new business creation and corporate investment. Both are increased with the lowering of corporate tax rates.
You have the correct goals, just the wrong tactics.
The real problem would be if Trump kept his promises and did not reduce taxes on the wealthy, but did significantly decrease taxes for everybody else. I think that that would be a very popular move that would increase his base and make a second term much more likely. He spends a lot of emotional energy poking the GOP establishment in a personal way but basically never in the substantive ways that would make even liberals, like myself, take a second look. Aside from all the lies, etc., it's hard not to think that better, cheaper health care for all, a trillion dollars for infrastructure, and lower taxes on the middle and lower classes (all of those campaign promises) would make Trump a truly different kind of politician.
By the middle class is not $250,000. These people have no idea.
1
At least Mr. Stephens admitted he and most other conservatives fully embrace "trickle down economics".
2
One can tell that Mr. Stephens area is not economics.
As many have said, history since Reagan has proved that tax cuts for corporations and the wealthy don't generate more jobs.
But it does generate increasing deficits.
And to grow the economy, we need more people working and at higher salaries when so good percent of the educated work force are baby boomers retiring.
No responsible economist is predicting 3% GDP growth.
2
The idea that tax cuts will make the economy flourish is a an article of faith. Back in the days right after the Crash of 2008, economists said that a tax cut was warranted, but a lot of them pointed out that other policies had more impact.
We live in an economy that is driven by consumers, not by the wealthy investing in second homes or buying stocks or some other "contribution" of the very rich. Maybe consumers are beginning to get back their confidence, but it's hard to see how they can spend without getting a bigger share of the profits generated by businesses. Growing inequality, exacerbated by many of those tax "reforms," will undermine the predicted prosperity.
There have been a lot of people who have supported a lower corporate tax rate, including President Obama. It seems unfair that corporations that can afford the expensive lawyers and lobbyists to find legal ways to avoid taxes pay little or nothing. Just cutting the rate without actually making reforms, i.e.positive changes, is wrong.
31
This is why taxes should be based on a single percentage of gross income. Brackets could be lower.
At this point in our history, WHY do we need a tax cut? We do need the tax code simplified and updated so those that benefit the most from our system at least contribute their fair share. This unabashed obsession with tax cuts for the wealthy is obscene and flies in the face of what this country is supposed to be all about. Interest rates are at historic lows. If anything we should be issuing long term bonds so we can finance the rehabilitation of our infrastructure to include a nationwide high speed and light rail on the scale of the Interstate Highway System. Keep in mind that President Eisenhower, a republican, was instrumental in promoting that system at a time when the top tax rate was ninety percent!
57
The left always eschews economic growth, have you ever wondered why?
1) If Obama couldn't achieve 3% growth, it must not be achievable.
2) If economic growth is not achievable, no reason to lower corporate tax rates. ( see today's comment section for proof.) Better to increase taxes on the job creators.
3) If economic growth is not achievable, median wages can not rise. Therefore the only way to improve the life of the middle class is minimum wage hikes and wealth redistribution. That's the lefts stock and trade.
4) Ecomomic growth requires burning of fossil fuels, which they believe causes climate change.
5) Prosperous people are more difficult to control. And they tend not to vote for more free stuff.
6) It's fun to accuse Republicans of giveaways to the rich!
In conclusion, don't believe that the left prefers economic growth of 3 to 4%, because they don't. They just want to transfer wealth and accuse Republicans of being greedy. Nothing more
The next time either one of you decides to pontificate about economics you should pass you simplistic ideas past Paul Krugman to avoid ruining your reputations. The likelihood that the Trump tax changed Will benefit anybody but the vastly affluent are nil. More likely they will lead to a bursting bubble in the stock market and severe cutbacks in social programs.
3
"They create jobs when they build a second home...."
I apologize for not doing my part. I'll build a second home and will even consider further steps to help the economy--perhaps a second yacht. Should I buy an airplane or two?
I mean, here's our wonderful president, along with his friends, having multiple homes, yachts, airplanes, let alone the wardrobes of their spouses and their gold-plated bathroom fixtures. All this sacrifice! We should look in the mirror and ask ourselves what we are contributing. Are we doing our part?
3
From the cheap seats we need a complete re-think of taxation from local to Federal. The fact that everything that moves or stands still is taxed by multiple levels of government is disgusting. We now have even seen do-gooders try to tax Diet Sodas in the name of fighting overweight- that would be zero calorie sodas, people.
We need to start by taxing investment income at the same rate as wages/salaries. There is no good argument for why Mitt Romney’s investment should be taxed at a rate lower than a ditch digger or a Soldier in a fox hole in Afghanistan. Sin taxes should go away- the purpose of taxation is revenue generation, not social engineering. State and Local Tax deduction is a subsidy of high tax states by low tax states. Mortgage deductions are subsidies of owners by renters. Churches should lose their exemption to include entities like hospitals that are officially not-for-profit, but operate essentially as for profit businesses. And corporations should lose depreciation- why should we pay them to invest in their business?
While we are at it, we should rebate Medicare taxes collected to expatriate retirees or give them a tax credit. They get to pay for it and then see no benefit.
1
The Bush Tax Cuts and reduced regulations did not stimulate the economy. They led to increased deficits and an economic collapse. The current tax cut being discussed will not help the middle class one bit. The elimination of the estate tax will help Ivanka Trump and others like her. Deja Vu. I have seen this movie before.
1
"When the rich 'sock it away,' that only means that they are spending or investing, which is to say, putting the money into the real economy just like everyone else."
That's literally the opposite of what "sock it away" means, Bret.
1
Bret Stephens said, of tax cuts, " When the rich “sock it away,” that only means that they are spending or investing, which is to say, putting the money into the real economy just like everyone else. They create jobs when they build a second home or become angel investors in a promising start-up or reinvest in their own businesses."
This is simply false. When the rich get a tax cut, they don't go out and buy a second home, because they already have a second home. And they don't invest in a start-up if there is no demand for its product, which there won't be, because the great mass of people in the middle and below don't have the money to buy that product. So they invest overseas or park the money in Treasury bonds. The notion that tax cuts for the rich grow the economy is one of the two central organizing lies of today's Republican Party. BTW, the other is that black and brown people are inferior and dangerous.
1
Geez Stephens, for a bright guy, you cannot see the forest for the trees on tax "reform" (reform for you guys is tax cuts for the rich). I would ask you when was the last time tax cuts for the rich stimulated the economy, the entire economy, not new yachts and buying islands? The last time Congress tried to get corporations to bring back money from outside the U.S., they just kept it and the economy didn't get any better. You seem to ignore that. Then there is you and the rest of the GOP ignoring that most large American corporations don't pay taxes anyway (see the list in this very paper the other day). Be honest Stephens, this "tax reform" is simply to eliminate Social Security, Medicare, and Medicaid, what your party has salivated over since they became law. Honesty is the best policy...
As Pres. Clinton and President Bush proved, tax cuts have little positive effect and balloon the deficit. Clinton raised taxes, our economy flourished, and we were actually running a surplus and paying down our debt. President. Bush arrived, cut taxes, the deficit exploded, and we were left with an economy in shambles. If the Republicans want to restructure taxes, fine. A tax cut will balloon the deficit when we should be reducing it. Republicans should operate under the same rules they forced upon President Obama and continue to reduce the deficit.
If Republicans were serious about tax reform, they would propose to abolish (i) the loopholes for corporate inversions, that neat trick that lets major corporations outsource their assets to, say, Ireland and then "license" rights back to its US affiliates, resulting in zero income in the US, (ii) the loopholes for real estate investors (and Trump), (iii) the loopholes for carried interest for fund managers.
1
A few thoughts about Bret Stephens' comments:
1. Regarding the relationship between a lower top tax rate and increasing GDP: how do you explain the 4.5% average GDP increase from 1960-1969, when the top marginal tax rate was between 70% and 91%?
2. "Good thing depreciation doesn’t apply to newspaper columnists. We just get better with age, like wine. Uh, right?" Actually, no, Bret. In your case, aging Ripple doesn't make it any better.
3. "I don’t think the party of Reagan will survive Trumpism." I guess the GOP has finally abandoned the moniker "Party of Lincoln," at least since Charlottesville.
4. "...budget reconciliation requires that tax reform not add to the deficit, which leads to some pretty bad ideas, like a border tax or slashing the 401(k) deductibility limit to balance the books." You got that one right. The GOP was in the vanguard of decimating defined benefit programs; now they want to gut defined contribution programs. And at the same time they want to cut Social Security and Medicare "to save it." What next? Issuing cyanide pills to all retirees?
1
The undefined tax plan is simply another Republican ruse to continue stripping away the income and assets of working, middle-class, military, and retired members of the electorate and pass it up to the top tenth of one percent, hedge fund owners, and multi-national businesses.
The Trump administration is perhaps the most corrupt, self-serving and illegitimate in American history.
Trump did not release his tax returns as is the modern custom. Trump did not put his family assets in a blind trust as is essential for any President to propose conflict-free tax policy.
The tax schemes he has proposed to date save he and his family potentially billions of dollars while handing out peanuts to the public.
Many middle to upper income people will see taxes increase, the poor will see benefits cut, while the only clear winners in every scenario are people earning over a million a year.
This is a tax grab for corporations, millionaires and billionaires, further shifting taxation from passive investment income to income earned from labor.
Studies have shown the current American tax system is already highly regressive.
Payroll taxes make up an increasing share of federal revenues, investment income is taxed well below wage income, and capital appreciation used for liquidity not at all.
The GOP and Trump are the last people you want changing tax policy.
1
Bret. Tax cuts for the rich will not "trickle down" to the working class.
Gail. You are right, Tax cuts for the rich will not "trickle down" to the working class.
Huckabee Sanders said: "The average American family would get a $4,000 raise under the President’s tax cut plan. So how could any member of Congress be against it?"
If I give 10 apples to one person and no apples to nine people, the average person has one apple. Why are nine people mad at me? (Credit: F. Leonard)
As Gail noted, the top percenters - individuals and corporations - are not spending their cash on endeavors that create jobs, or at a minimum, on increases in wages. And why not pay more in wages to production workers? How is that bad for the economy? Didn't W tell us to shop after 9/11? (pathetic yes, but there's economic logic there)
A a desire to keep profits personal in the executive suite (and in the stock portfolio) and a reluctance to share corporately the fruits of all employees' labor is short sighted. Nor is it all one way or the other. The successes of a business should benefit everyone. A rising tide lifts all boats, even for the 1%ers, who would raise the tide by sharing the wealth - not as trickle down, but as a multi-pronged flow of income: investments in business, education, wages and infrastructure.
1
Let's see here:
The US reached $1 trillion in credit card debt (Yes!, we did it...)
Outstanding student loan debt is over $1 trillion
The Debt is $21 trillion.
So, the bought and paid for sheep in D.C. look at these sad numbers and screech in unison: "A tax cut for the rich!"
Bret claims to stand for truth, but he then repeats the lie about trickle down economics. Sigh.
1
Is there really any basis for arguing that tax cuts -- particularly corporate tax cuts -- as opposed to government spending will boost the economy? Haven't we seen in the last decade that large corporations prefer to just sit on piles of cash rather than put it out into the economy? It would be awfully nice if the NYT and other large media outlets would grapple with the tough policy questions once in a while rather than just let people assert something and have Gail Collins lob jokes rather than a substantive response.
Huckabee Sanders said average household gets $4000 back---Guffaw! Is she talking AVERAGE RETURN because 20 million households getting 0 and 100 households getting $400,000 would make an equitable average but, but misleading since only 100 benefiting. Give us the median income that is middle for tax return money. Then give us the mode income level --what income bracket getting most return. Then let's talk Huckabee Sanders.
1
So-called “conservative” Republicans demand stringent fiscal rectitude while out of power, morphing into spendthrifts soon after regaining it; an amazing metamorphosis. Meek little green desert grasshoppers transform themselves into monstrous, ravenous yellow locusts that devour everything in sight.
Since Federal government debt will probably exceed $32-trillion by 2030 at current overspending levels even without their latest proposed tax cuts, congressional Republicans’ adamant refusal to seriously confront our national overspending crisis — one that is actually theirs — will destroy the United States as we know it, and probably sooner than 2030.
I can only attribute Americans' fixation on tax cuts to their complete lack of experience with the rest of the world. Wouldn't you like to live somewhere nice? Where the infrastructure works, and the social safety net works, and your services are reliable? Every time an American goes to a country like that, s/he oohs and aaahs about how nice it is. Guess why? Taxes.
1
Where is the evidence that yuge tax cuts for the rich increase economic growth for the middle and working classes whose economic situation has been stagnating or declining in real dollars for decades?
Tax cuts for the rich 1% work very well for them--look at the statistics on the increasing share of the wealth the 1% has been accumulating, while the rest of us tread water economically or go under for the third time.
Here's the thing. All the emphasis in this country is on the GDP, Wall Street, and the financial sector which has overtaken the manufacturing sector in growth.
Since the 1980s we tried it the GOP and conservative Reagan tax cut way. So how's our quality of life for people in our society? Great for the rich, not so good for people, civil society, our country, the value of sharing, and the planet.
Luckily I traveled outside the country to Scandinavia and Europe where I learned that emphasizing balance and quality of life in a society means more than having a relatively small, stingy fat-cat class.
Take a look at the world rankings for the Quality of Life Index http://www.oecdbetterlifeindex.org/#/11111111111
Okay in income the US ranks #1, but in Jobs, Environment, and Life Satisfaction, etc., Iceland, Switzerland, Norway are at the top, the US is midway down.
In countries with higher taxes, the middle class gets a better return on their tax dollar, (health care, K-college, old age...) has fewer worries, and lives in a better environment.
You decide
60
All those tax cuts will not fix our nation's infrastructure. An improved infrastructure with better roads suited for self-driving vehicles, a more robust and accessible cyber backbone, and support for real science in the government are some of the projects that would more likely catalyze growth.
5
Tax cuts do not encourage the rich to spend or invest. Why is it better for the rich to have a second home when the poor have none When you have everything you need ,what are you going to buy? The poor and middle class do most of the buying since there are many more of them and they have more needs. Investments are losers unless people have money to buy your products .Our growth rate is low because people are paying off their high debts rather than buy..
Reagan cut taxes and then raised them and the economy grew a little. Bush ! raised taxes a little and had a little recession.Clinton raised taxes and had more growth than Reagan. Bush cut taxes twice and end up in a major recession. Obama raised taxes on the rich and got more growth than any Republican since Eisenhower (90% top tax rate). Trump has taken credit Obama's growth by threatening to cut taxes when the USA is less taxed than most Western countries and needs spending on infrastructure, research, and education without cutting entitlements Republicans want for themselves.
58
Check out the NYT "Watch Issue." So disgusting.
It's frustrating to read this largely useless exchange. It's without any real and credible information -- from either side. When has the economy ever grown at 3% when taxes have been cut? The dirty little secret is that we see our best growth when progressive taxation on incomes is reinforced and higher rates enacted on the wealthiest. Should corporate tax rates come down -- yes, but not personal income tax rates. The well off don't spend in numbers significant to make the economy tick faster. Yes, they do invest. But they are investing in companies that already have billions in cash tucked away to pay to their stockholders when the time is right. Companies don't lack for cash to invest.
More significant is that the various agreements that make doing business easier and provide for a more stable economic environment, like NAFTA and the Iran nuclear agreement, are being undone. The message being sent to business is that they won't know when their supply chains will have to altered and what the trade environment will be, or whether they'll have to take manufacturing out of the USA completely. Read today's story on NAFTA. It looks as if Trump's trade policies may be in the process of undoing the very auto industry that we just saved (post Great Recession).
Listen to what the responsible among the super wealthy are saying: Their lives won't be any lesser or less profitable with higher tax rates at the upper end.
5
Why is the argument around tax cuts always held at the liberal 5 yard line? There is simply no empirical evidence that suggests in an economy of our size and maturity with near full employment and a relatively low tax burden that cutting taxes of the wealthy will lead to unleashed, rapid economic growth. See Kansas. Read Krugman. If corporations are so desperately in need of a tax cut to allow investment then why are they currently sitting on trillions of dollars ? Yes, the rich may build a second house and put more to work but that is an answer to the wrong question. The right question is what type of tax cut targeting which taxpayers can most efficiently lead to growth and that question has been answered--cutting taxes of the MIDDLE class leads to the most return on investment. Capital of the wealthy is far more likely to be hoarded or invested anywhere on the planet, middle class gains are more likely to be used for immediate purchases and recirculated in this country. Why isn't a tax cut focused on middle class tax rates? Why are estate tax and pass through taxes cut when they disproprtionately target the few and the wealthy ? Why consider doing away with SALT and 401-K deductions which place a far greater burden on the non-wealthy ? Let me answer--its another immoral sop to the wealthy, like bank bailouts, they will only exacerbate inequality, further threaten democracy and lead to the inevitable demand to cut government services because of the predictable deficit.
20
Not to mention the fact that actions sometimes have unintended consequences--like inflation (i.e. our saved dollars being worth less).
2
Is there any evidence that reducing taxes increases real economic growth? It just means that government will borrow the money, taking it out of the hands of those who can spend or invest it just as would taxation.
Supposedly, leaving more in the hands of the rich will increase investment (which they do) rather than consumption (which the less-well-off do). But too much capital investment can be no better than too little, if productive opportunities have been exhausted. China is trying to reduce its too-high savings rate for this reason.
Do economists understand anything? They're incapable of predicting the future, the fundamental requirement of a theory of anything. NASA knows in what direction to point a rocket to get to the Moon. Do economists know anything comparable?
6
The vast majority of economists do not believe that tax cuts will grow the economy. Over 80% of the economists surveyed by Bloomberg give estimates of $2.5T to $3.3T of an increase in the deficit.
The only economists pushing the “cut taxes and grow” trope are bought and paid for by the Kochs. C.f., Kansas's economy.
1
Eliminate taxes on anyone making $50k or less. Money directed to those in that bracket will be spent immediately on basic necessities, thereby helping to grow the economy. That same money given in the form of a tax cut to the top 1 percent goes in investments or a trip to Europe....maybe.
1
"Eliminate taxes on anyone making $50k or less.".... Almost all the Federal income tax is paid by people who make more than $50k. It follows that it is rather difficult to provide a meaningful tax cut for people who don't pay taxes.
GOP politicians say they promised to cut taxes, so they need to be sure to do it. What no one ever mentions is that they, especially the president, promised to cut middle class taxes. Voters should hold them to their promise and let them know that their proposed tax giveaway to the rich is not acceptable. Voters should demand that no cuts be given to the top 10%. That means they could at least quintuple tax cuts for everyone else! The International Monetary Fund some time ago released a report stating that the best way to improve the economy is to give more money to the lowest 20% because they spend it immediately to improve their quality of life. Polls show most Americans oppose tax cuts for the rich. Let's hold politicians to their promise and quash this nonsense where their plan gives 80% of the cuts to the extremely wealthy and raises taxes on the middle class.
4
The Tax Overhaul will be devastating to many middle class senior citizens’ budgets including mine. With the proposed tax overhaul I will lose the health, real estate, and state tax deductions. I do not have a mortgage, along with most other seniors, as a widow I have no dependents. Given my 2017 income as my base number as an example, I would lose $13,650 in tax deductions under the current Trump proposal. Additionally I would incur nearly $3500 more in tax liability than in previous years. I resent the fact that my taxes are subsidizing the wealthy that already have access to multiple loopholes. My tax rate increases from 20% to 25% while billionaires Warren Buffett and Mitt Romney currently pay a rate of 14%. We need to hold our senators and our representatives accountable, requiring them to take actions to protect its middle class senior citizens.
7
Here’s a novel idea. Do tax cuts that ONLY benefit the middle and lower classes, i.e. lowering their rates a few points, and see if the money that they keep in their pockets revs up the spending and therefore the economy in general, instead of giving it to the rich hoping they will spend it on reviving up the economy by “investing” or “trickling down.”
4
It is entirely possible and would be a good thing if moderate Republicans and moderate Dems could come together behind one "party of Moderation" to start leading and fixing our country. Yes we can and need to do this.Taxes would not be the issue that would get in the way I don't believe. A focus on closing the debt ceiling could be the call to slow down spending and payoff what we have purchased. The sticking point would likely be letting women make their own choices, for God sake what a revolutionary idea. Must be the rebel in me.
3
"If the rich benefit disproportionately it is only because they pay a disproportionate share of taxes."
Oh, Brett. Of course they pay disproportionately more. That's because they have most of the money! You know very well that the wealth created over the past decade has gone largely to the top 1% of Americans.
Lower-income people would pay more taxes if they made more money. Instead, wages are depressed, and tax dollars are needed to prop up their standard of living — Earned Income Tax Credits and food stamps and ACA premium subsidies.
Here's a radical idea: How about Walmart starts paying a living wage, so its employees can stop qualifying for government assistance? Maybe they can do this with the billions in profits they and other companies are squirrelling away.
They don't need a corporate tax cut. They just need a conscience.
11
We're one of the lowest taxed countries in the OECD, we have a serious inequality problem and we're facing $10 trillion in debt increases over the next decade even if Trump does nothing.
Seems like a recipe for serious tax hikes on the rich. Bear in mind, the economy grew faster after Obama raised taxes than when Bush cut them, and when Clinton raised taxes vs. when Reagan cut them. In fact, the economy, job creation, and stock market have all done better under Democrat Presidents, who tend to raise taxes. Go figure!
3
Instead of 'trickle down', I suggest we try 'percolate up' economics... no taxes on the first 100K.
Above $100K, the rate is steeply progressive to 90% >$1M. The only deductions are for mortgage interest, property taxes, medical expenses, retirement savings, charitable contributions, and child care.
Reinstate the inheritance tax for estates valued over $1M.
National $15 minimum wage that automatically adjusts for inflation.
And, guaranteed access to health care and higher education for anyone who earns less than $100K/yr.
5
The fundamental unfairness of the modern U.S. tax code has broken the American Dream and made a shambles of the American Covenant of "Work hard, play by the rules and grow with the country."
I was born into a nation that cut the number of Americans in poverty IN HALF within a generation (1959-1974). The slope of our poverty rate line changed from sharply negative to flat between 1966 and 1974. The stagflation of the late 70s and early 80s pushed ten million into poverty and set the stage for Reagan to disconnect the mass of us from sharing in the growth of our economy. Since 1977, the nation has added $17T in yearly goods and services yet also added 18 million to the poverty roles. The only way that happens is if our tax system enabled it. For a modern economy, the tax law is what determines who makes, who takes, who gets and who keeps and clearly our tax policy is honoring return to capital far above the return to labor. Any system that creates more wealth for a lucky few and increases the number in poverty is evil. If kept this way for another generation we will be a nation of paupers.
The tax burden (total amount paid in taxes divided by total income) on middle and lower-tier earners is far heavier than it is on high income households. How does that become true in a country with supposedly progressive rates?
Stop pretending and stop bleeding the middle class.
3
I don't understand the popularity of tax cuts to anyone who is not wealthy. Let us try to recall that the government needs revenue to: enforce the tax code, preserve and protect the environment and enforce environmental regulations (protect the citizens), enforce labor laws (protect Trump voters and all workers), pay for schools and school programs (promote the common good), build and maintain infrastructure (promote the public good), fund the arts (obviously valueless). Reagan tax cuts ballooned the deficit. The Bush tax cuts were gigantic and were legislated to end after 10 years. Two wars and an economic disaster later (recovery from which we could not afford to adequately fund in the government bailout), Obama EXTENDED by 2 years those cuts. Now the rich want MORE? It boggles the mind. 3% GDP seems like an arbitrary target. Why do we accept it as a given? Climate change is a gigantic disaster that the government has to contribute to solving-economy of scale and pooled resources and all that. Close the carried interest loophole for hedgefund managers-THAT would be "reform"-FUND the IRS so we collect the revenues due-THAT would be reform-and then we will have made real progress.
I do not scream for tax cuts. Not for myself. I certainly want much much much higher taxes on those who have taken far more than they deserve from this county - the obscenely wealthy. This notion that tax cuts will give the ultra wealthy so much more money that they will spend it is a notion promoted by the ultra wealthy. Taxes rates on the ultra wealthy as they were at the end of WWII are the best way to get this country back on its feet - and they should be retro active!
3
Gail, it would be nice if you asked Bret why he thinks tax cuts for the rich will grow the "real economy" by 3 percent. He's peddling "job creators" rhetoric with no evidence whatsoever, as many others are saying.
On the other hand, higher taxes on the rich can put that money directly back into the economy in the form of infrastructure spending and welfare spending, which goes DIRECTLY to the people who need it, unlike trickle-down.
3
Let's see if we can understand why tax cuts for the Rich or more generally, income and wealth inequality, is bad for the economy. Economists have a concept called the velocity of money. It is the frequency, how often, that money changes hands in domestic commerce.
Here's an example. Suppose the government gives Scrooge McDuck a Billion for advice on the comic book market, If Scrooge puts the bucks in his basement, and forgets about it, that doesn't help the economy at all. That Billion has a velocity of 0. Also, if Scrooge loses a financial bet to Daddy Warbucks, and the Billion moves from Scrooge's basement to Daddy's, that is a change, but the velocity does not change because it is not a useful change. It doesn't affect commerce.
Money going to the Rich has a lower velocity than money going to the non-rich. Brett is wrong. he Rich spend a lower percentage of their money. What's a guy or gal who already has so many houses he can't remember how many & an elevator for his horse gonna spend his money on? The answer is he is going to use it to speculate. There is a correlation between inequality & financial speculation. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1661746 Speculation is bad for the economy. That money has a very low velocity. AND it increases risk which we have seen in 2008 ain't a good thing.
Since 2007, the velocity of money has plunged. https://fredblog.stlouisfed.org/2016/04/a-plodding-dollar-the-recent-dec...
3
I'm all for tax cuts everywhere so long as we don't add to the deficit. These new proposed cuts are projected to cost $1.5 trillion over the next 10 years.
Solution. Reduce the defense budget by 1/4 annually, wallah! All done.
1
Stephens's prediction that the GOP will implode because moderate conservatives abandon the party of Trump seems like wishful thinking. If that were the case, wouldn't they have done so in 2016? It turns out that there are fewer people like Mr. Stephens than Clinton supporters like me thought. Outside of the GOP newspaper pundit class--Stephens, George Will, Jennifer Rubin, etc., they seem to be practically non-existent these days.
1
Bret pulls a 'trumpism' when he says: I only worry about deficits in extended periods of slow growth. Nobody thinks of Carter-era stagflation as a prosperous time for the United States, but the debt-to-G.D.P. ratio was low: just under 31 percent in 1980 as opposed to around twice that in the middle of the Clinton boom. And there are times when the government has legitimate reasons to spend a lot of money and pile on debt,"
Bret goes from "deficits" to "debts" as if the two are the same.
A casual reader might think Bret is saying the huge deficits we had during 'the Clinton boom' were okay... because we were in a boom?
BUT the Clinton years are known for (nearly) balanced budgets due to low and very low deficits. The reason? Increased taxes brought in more tax dollars.
The hi debt-to-GDP ratio was something Clinton inherited from Reagan and Bush years when taxes were low and deficits tripled the national debt.
Bret does Donald Trump proud by conflating two similar sounding yet distinctly different fiscal items to confuse the argument.
2
So the rich put money back into the economy by building third and fourth homes?
Wouldn't it be better for ALL of us if the tax rates on the rich increased, and that money went to employ people who built low income housing, repaired the infrastructure, built solar, wind, and geothermal energy components, reduced class size in elementary schools, ensured everyone of health care, increased research?
And for the last time, Mr. Stephens, research has shown over and over again that the factor that most predicted a vote for Trump was racial attitudes, not economic anxiety. Trump and Sanders both attracted mainly white votes. The average Trump voter made $70,000 a year.
2
Regarding that photo-I suggest an article comparing how far to the right a politician is and how many flags they drape all over the place wherever they appear, as Trump did while campaigning and apparently continues to do. I infer that Trump wants to be identified with or even as the United States, when the opposite is true. He did not receive a majority of the popular vote and lacks a mandate in office, yet, as with George W. Bush, it is full steam ahead as though everyone supports his policies. Lefties and Democrats love this country and are just as patriotic, but not nationalistic. People should recognize this flag-draping as marketing and not be deceived. I am a progressive and I love this country-and that is exactly why I oppose Trump, who poses a mortal threat to the citizens of this country, whom he clearly does not love or care for: on the environmental front, public school front, workplace safety front, tax front, healthcare front.
1
Yeah, give the rich more money so they can invest in ... collateralized debt obligations.
They are creating jobs building the extra homes of the rich? That IS rich. The jobs they create are primarily in places where the wages are below the US poverty level.
1
Go look at the historical record since Reagan. Trickle down economics only gives us an increase in the deficit.
W. Bush gave us two "tax cuts for the job creators" and the economy created 3 million jobs.
Bush also took a balanced budget from Clinton, zero deficit, and turned it into a whopping $1.1 Trillion deficit. And that was the budget October 1, 2008. After the subprime meltdown, the actual number came in at $1.4 Trillion.
Obama put back the highest marginal tax rate for job creators and gave us the "jobs killing" Obama-care and the economy created 10 million jobs. 16 million jobs really but 6 million were jobs that came back after the worst recession since the Great Depression.
And Obama reduced the deficit by almost 2/3 to $550 Billion.
I think the "economic anxiety" is more of a fever dream. Yes, there are people who are not doing well. But most are.
Ray: One in four children in North Carolina live in poverty. 50% of public school children in Wake County where the NC capital is located qualify for free and reduced lunch. Yet this area is rated by national polls as a top US place to do business. Go figure.
Except for the faulty understanding of how tax cuts for the rich have only a slight benefit to the overall economy and how running a huge deficit for several consecutive years does matter and how trying to soften that deficit by removing the social and healthcare safety nets from the poor and from lower income working-class Americans is both cruel and unproductive, Bret Stephens really gets it!
I suppose that I should do for Bret Stephens what Donald Trump and General John Kelly found impossible to do for Rep. Frederica Wilson and then for Myeshia Johnson, widow of Sgt. La David Johnson: apologize.
Maybe I’ll wait a week or so.
As I read this, I'm watching Paul Ryan on TV talking about how the tax plan is all about helping the middle class. I've always loved fiction.
2
David Stockman let the cat out of the bag on cutting taxes when he worked for Ronald Reagan. Starve the beast. Cut taxes to create revenue shortages that can be used to demand cuts in Head Start, Food Stamps, Medicare (and now the trial balloon - 401Ks). All of this while our bloated "defense" spending serves only to motivate aggression against the US (oh, and enrich the defense/security industry.) Go ahead, cut taxes. But for every penny it withdraws from the US Treasury, cut a penny from "defense."
With regard to tax cuts, I wish when The Times interviews those in Texas and Florida, as it did in an article yesterday, who are complaining about not getting aid from FEMA quickly enough how they feel about tax cuts. I'd bet most if not all would want the cuts. Which makes me wonder where they think the money for FEMA comes from and how reducing the money the Federal government has would end up making FEMA more responsive.
1
Stephens moons at the chimera of the 3% GDP growth rate. Lest we not forget, unrestricted growth is the philosophy of the cancer cell.
Two folks who have no idea how the national accounts operate, or even what rich people do when they get even more rich because of tax cuts aimed at making them more rich. Buying and selling stocks and Treasuries is not investing. It's called saving in the national account books. The federal government has no need to issue debt to fund itself. Because it produces the dollar. Why borrow in the private money markets when one produces the currency of record to begin with? Nope, we borrow because the rich require the world's safest financial security to insure their massive savings. And to make this even sweeter, the additional spending deficits pump into the private economy goes to the buyers of Treasuries. That would be the wealthy, of course. Fleecing the ordinary citizen is so easy. Like shooting fish in a barrel.
1
The US economy is nearing full employment. Without some immigration we cannot support great deal of new growth. This tax cut is meant to A. Starve the government of funds so that an artificial crisis is created in order to make cuts to entitlements such as medicaid, then medicare, then social security, and onwards and B. reduce or eliminate estate taxes only to further create an impossibly huge income and wealth gap.
Then too, the elimination of state and local tax deductions is specifically targeting New York, California and other states which have a higher level of services for their populations. One doesn't have to think hard about how this will cause a gradual exodus from higher tax states as well as a diminishment of real estate values there, as buyers calculate the net, after tax, cost of ownership and can not afford to pay the same prices, opting to rent or to buy smaller apartments/homes. A North Carolina Congressman even went so far as to say that it is "time that New Yorkers pay their full share of taxes". In 2015 New York residents paid $13,659 to the IRS per capita. North Carolinians paid $7,846 per capita (Wikipedia)
This ruse to reduce taxes on the highest income and wealth citizens, as well as on corporation as we near full employment, will have no benefit to the economy will have complex but negative consequences for residents in New York. Republican Congresspersons from NewYork please take note. Services to your constituents will fall sharply.
1
Love your humor in these dark, dark times. Lots of good points in your conversation, and one I like is that maybe Trump has brought us together. Not sure I agree, but that is one way to look at the MOST AWFUL situation.
Thanks for talking/writing together and showing what a civilized conversation can be.
2
This constant refrain of the rich getting the most tax cuts because they pay a disproportionate amount of all taxes has got to stop.
The reason, the only reason, the rich pay most of the taxes is because they make most of the money and own most of the assets in our economy. Period.
All other reasons are spin, or more politely, lies.
Bret Stephens has no concern about the planet's limits to support growth? You want 3%? Why not 5% or !0% growth? Buddy, there's a slow train coming.
Bret -- even if economic policies create growth in the economy the jobs that the uneducated sector of the working class is angry about -- they're not coming back. If American companies do in fact invest in new productive capacity -- which is not a given in spite of rosy GOP dream-weaving, they will invest in automation with as few human employees as possible, and those human employees will need at least undergraduate engineering degrees. So don't look to corporate tax cuts as a way out of Trumpism. Trumpism is an infection for which there is no antibiotic -- we just have to sweat it out.
Like Bob Corker and John McCain, talk of cutting taxes turns Bret Stephens into an unthinking doctrinaire Republican.
Cut corporate taxes? The poster child for the dysfunction of the corporate tax code is General Electric. It employs a small army of lawyers and accountants to not only zero out corporate taxes paid to the US, but to turn it into a taker of resources, by getting the US to rebate taxes it paid abroad in service of offshoring its profits.
Now, under Jeff Immelt and his successor, John Flannery, its stock price has cratered by 30% since the turn of the year. Analysts are predicting a 50% dividend cut, and now Flannery is proposing selling off subsidiaries and cutting mass quantities of jobs.
Read it again, Bret, they pay ZERO corporate tax and are going to be eliminating jobs, not creating them. So HOW does this fit Bret Stephens’ and the doctriniare Republican narrative rationalizing corporate tax cuts?
1
To really help the middle class, stop taxing Social Security benefits.
3
Since Reagan, we've had this back and forth on taxes, the deficit and debt. Reagan's tax cut spurred some growth recovery because we still had factories, a manufacturing base and the Cold War. However the debt and deficit also had growth resulting in a recession during Bush Sr.'s term. Clinton raised taxes, had enormous growth, reduced debt, turned the deficit into a surplus. Then Bush Jr. blew that up with unnecessary tax cuts, and a couple of wars which exploded debt and deficit and left us with a broken economy. Obama spent most of his time in office repairing the damage, raised taxes, started reducing the deficit again and left Trump with a pretty healthy economy, all things considered. This so called tax "reform" will do NOTHING for the economy or middle class jobs. It will put more money in the hands of the already wealthy and blow a nice new hole in the deficit and debt that the next Democratic President will have to work even harder to repair.
4
I live in Silicon Valley. Giving tax cuts to the wealthy will do nothing for the economy. They guys will buy another house or buy another fancy gadget. What we really need is lower taxes for those making $30-80k a year. These are the folks who are struggling to put a roof over their head and food on the table for their families. They are the social workers, teachers, and service workers.
107
The rich pay more is a specious argument. They pay more because they have higher incomes, but they pay less as a percentage of that income. Much of their income is from dividends and capital gains which are taxed at a lower rate. They pay the same sales taxes as the less fluent, but it is far less that the percentage of income paid by those below the 80%.
Typical Stephans fudging statistics.
5
"Asking me about tax cuts is like asking a child about ice cream: Some flavors might be preferable to others but it’s pretty much all good"...Never mind about the deficit, or our crumbling infrastructure. It isn't important that the power grid needs to be upgraded or our public schools improved and college costs too much. We don't really need a technology advantage so cutting investment in CDC, NIH, and basic research won't matter. The fact that we have the worst passenger train system in the developed world and our airports are out of date won't cause a problem. Who cares that the Mississippi lock system is a drag on our export commerce or that our ports need to be upgraded. Fixing these things would provide good jobs that can't be exported, but tax cuts are far more important. I mean seriously folks, is there anybody in the Republican Party who can think past the stupid dogma?
7
"Is there anybody in the Republican Party who can think past the stupid dogma?" Not since they all signed the anti-tax pledge and hog-tied and branded themselves with the stupid idea that they might run the country, build its infrastructure, and balance budgets with only one tool -- tax cuts.
One need only look to Kansas and the "real world" economic experiment tried by
Sam Brownback and his Republican legislature.
Drastic cuts to taxes for businesses, particularly small businesses, did not result in increased economic growth for Kansas that, according to Brownback and his fellow travelers, would generate additional revenue to offset the tax cuts. The result was decreased tax revenues which Brown tried to offset with cuts to education and other public services.
"Trickle down" is a poor, but accurate, euphemism for helping the middle and lower class. We are all jwaiting, our eyes clued on the "spigot, " to see if we can glean a drop or two of prosperity in return for funding the lifestyle of the 1%.
8
The most prosperous time for our economy began during the Reagan era, when tax rates were much higher than they are now. We should increase taxes especially on the rich. Furthermore, whenever we have our armed forces engaged in military action we should--I feel constitutionally--automatically reinstate the rates in force during WWII, with adjustments for inflation, of course. Instead these mamserim push the well and repeatedly disproved lie that cutting taxes increases economic activity.
4
Since 2010, US Corporations have incurred record amounts of debt at low interest rates. Where has that money gone-for plant and equipment to create jobs? No. Almost all of it has gone for stock buybacks. Why should we think that giving companies tax cuts is going to be any different?
We are already competitive with the rest of the world in terms of corporate tax rates-effective tax rates. Boeing has had a 3% tax rates for years. Corporate profits are at record levels.
By repealing individual deductions, one thing most people are overlooking is the repeal of the medical expense deduction. Because of the floor, most people don't use it year to year. When will people need the medical expense deduction? When they and/or their spouse end up needing in home care, assisted living and nursing care. When the $100-200k bills start rolling in for those who have assets and are not on Medicaid, they are going to need that tax deduction to pay the bills. Unfortunately, that money will have already gone to Trump and the Koch Brothers, among others.
7
Ha, ha. Almost everything Bret Stephens said is demonstrably and well known to be false. The economy? Tax cuts for the rich? All parties have extremists? The sainted party of -- Reagan? Oy! (more Yiddish; he got that right).
13
Good debate. I think Gail's comment about the middle class spending the tax cut is right. To have growth you need demand. That has been the central issue for the past 15 years (and the wealthy who own the assets that create the products to fill that demand will get their returns there). Bret's comment about the wealthy investing, that will eventually create the demand required (if I'm understanding his position correctly), in my view is less certain. It might create some demand (after all if there is a demand for the product then there will be investors). But in most cases, I believe the wealthy will seek yield and will invest around the world in search of it (after all, money is very fungible).
Yes, there is a philosophical debate as to whether the wealthy should be taxed at the current rate. I come down on the side that they should be, since a lot of the wealth created today is with technology that most had little hand in creating, but have been able to use (good for them) to maximize returns. Leveraging technology will continue to cost many middle class jobs (e.g. the newspaper industry as one, of many, examples). Folks do find other employment, but usually at lower wages and less security (getting us back to that demand issue again). The taxes on the wealthy during this transition should be used to create some buffers (for example, the ACA or whatever iteration it takes, as one example) that allow people to feel more secure and hence spend more.
7
What tax loop holes have been taken away from the top 1%? What about capital gains? Others?
I’m generally ok with higher taxes in exchange for benefits to society but if SALT deductions are eliminated my taxes will go up (being a CA resident with house and above average income) to do nothing more than provide a tax cut for the very wealthy and very high income earners. That doesn’t sit well with me.
11
Could we at least mention that no "supply side" tax ever has resulted in expanded growth or increased employment. please. It just hasn't happened. Also the current stagnation has been closely associated with a long term trend to shrinking government investments brought on by "starve the beast" tax cuts. Gail Collins is a wonderful person but both she and Spiner are out of their league when debating economics. You won't find a competent proponent on the right but there are plenty on the other side.
20
Sorry to disagree, Bret, but pistachio gelato in a double dip cone with dark chocolate happens to be one of my favorites! But to the point: the wealthy pay a disproportionate amount of income taxes because they have the income to get by PLUS a lot left over. Middle class people who are dependent on tax savings on 401K retirement plans and the ability to deduct state and local taxes are now being threatened with having that taken away. So perhaps a lower rate of 35% for the wealthy and a surtax on incomes above, say 5 million should be considered, and estate taxes should continue as it only benefits a couple thousand tax payers. I would say that lowering the corporate tax rate could possibly lead to growth, though that might be questionable since there are so many corporations that pay NO corporate taxes because of all the deductions their attorneys find for them. Or perhaps the answer is in a VAT tax. I don't think Congress is looking at this in a constructive way and the inequality that exists in this country will continue to tear our social fabric apart.
11
Not all "investments" are the same. Yes, if a wealthy person builds a fancy second home there are workers to build it (most of them, by the way, not paid well). But if the money is invested in development of new goods and services (and not in the Romney-esque OLD goods and services transferred to cheap overseas producers) then instead perhaps thousands of people can buy new homes along with the other things that we need. If there is to be tax relief, let it be for the latter process where it can do some good, not for the former where it merely exacerbates the growing wealth gap.
7
I enjoy these. But a question for Mr. Stephens, if he's listening. The argument for tax cuts that benefit the wealthiest - trickle down, and businesses will invest, creating jobs etc. - presumes that there is a capital shortage, that businesses are largely held back from investment due to the absence of available capital. But this capital shortfall is not in evidence anywhere. Lack of good opportunities for investment seems to be a much greater problem.
Further, the best answer as to how to finance these tax cuts is to hit hard at the middle class, notably by starving middle class 401K plans. How does taking money from my 401k, and giving it to Donald Trump et al, increase the total pool of available capital? It take the dollars from my pocket, and puts it in his...but it's the same dollars in the investment pool.
37
Many years ago in college I had a professor who said the Great Depression might have ended sooner if Roosevelt had simply handed $100 bills to the people on the bread lines. Unlike the wealthy, they would have spent it immediately, thereby accelerating the economy for all. On the other hand, Kansas and Governor Brownback experimented with "trickle-down." Cut taxes for the wealthy (and services for the poor) and presto - I promise you! - everyone will benefit. Or not. Me - I don't want to see ANY changes to our tax laws until I see 10 years worth of Trump's tax returns.
50
"When the rich “sock it away,” that only means that they are spending or investing, which is to say, putting the money into the real economy just like everyone else." Just not true. Because the money that's invested in other companies doesn't go to wages or research, it goes into profit. which means it goes to some other individual stockholder or entity who then invests it. It's a vicious circle of artificially inflated investment value that makes things "worth more" on paper, but that worth isn't translated into any form that affects the general economy. If all those tax breaks were used, say, to pay people to work on badly needed infrastructure, those wages would then be used to pay rents and mortgages, buy school clothing and books for children, buy groceries, make car payments, maybe go on a vacation--all of these things pumping money into the economy. The purpose of money is to change hands. The more times it does, the more people it benefits. Money tied up in banks or paper investments is like water sequestered in reservoirs, not being allowed to flow into the rising tide that's supposed to float all our boats.
28
I can buy stocks on the NYSE all day long -- I am not investing in those companies. I am not adding to their productive capacity or their ability to hire new workers. I'm trading chits with other investors as we all bet on whether the companies will do well or not. But, to repeat, we're not doing anything to help them do well. It can be argued that the first person to buy a stock at the IPO is actually investing in the company -- after that it's all a game of Monopoly.
10
"When the rich “sock it away,” that only means that they are spending or investing, which is to say, putting the money into the real economy just like everyone else."
No, it does not mean that. It means they don't spend it and make it part of the money supply. They choke off the economy by parking the money, offshore or in speculative assets instead of productive domestic spending.
30
"Sort of difficult to concentrate on the subject, what with the way things keep exploding in Washington."
That is a method. Deliberate. It is how Trump won, dominating the news cycle and slipping everything else by in the smoke he generated.
21
"Republicans have spent the past 60 or so years trying to dissociate themselves from their nativist, isolationist, ethnonationalist wing"
Maybe Bret has spent his whole life trying to salve his conscience by ignoring this wing of his party, but Republicans have in fact spent the last 60 years ago nurturing and cultivating that wing, from Nixon swooping in to claim the South with his "Southern Strategy" when the Democrats passed sweeping Civil Rights legislation, to Reagan announcing his candidacy in Philadelphia, Mississippi (why would the Governor of California announce his candidacy there?), to Bush 41's Willie Horton ads to Bush 43's race-baiting whisper campaign against McCain in the South Carolina primary, to Trump, one thing has been consistent for Republicans: they fan the flames of racism and exploit the destruction it causes, all to distract from the fact that Democrats have economic proposals that better meet the needs of the majority of Republican voters.
If Republicans abandoned race-baiting and actually ran on their policy proposals (e.g. eliminate estate taxes for couples with estates over $10 million while cutting Medicare) they would lose in a landslide.
53
Here's another use for excess wealth:
Buying elections. Clearly Congress is in the business of deregulation and tax cutting to support their wealthy donors.
No ordinary citizens need apply: Citizens' United saw to that.
They don't seem to realize that destroying the climate hurts their younger friends as family too. It's a slippery slope, this mounting acceleration of dangerous climate events. Nobody is exempt, and wealth only buys temporary refuge.
And even the wealthy can't make space and Mars habitable, let alone affordable. Why not fix our own hospitable planet?
24
Bret, I agree that if we can take steps to achieve 3% GDP growth, we should all swallow our pride as Trump takes credit. This is called altruism, and is seen by most as a virtue.
But why the assumption that the rich are the ones most capable of making sound investments that will lead to growth? Since the 90's, economic growth has been fueled by tech, and the names we think of didn't start out as millionaires, nor did they start megacompanies that would magically employ thousands overnight. Oh, there were exceptions, like millionaire Jeff Bezos. But he was happy to start Amazon even when taxes were higher, and he grew it slowly into the behemoth it is today. So who are these billionaires you think are dissuaded from investing because of the current tax structure?
15
The U.S. is one of the lowest tax countries in the OECD. We have a terrible inequality problem. The economy is booming, a time when Keynes says we should consider austerity, not stimulus, to help pay down our debts.
Therefore, we should be talking about income tax increases on the rich, not cuts. There is no evidence that cutting income taxes boosts growth over the long-run; we had better growth under Obama (who raised income taxes) than Bush (who cut them). Clinton (who raised income taxes) had better growth and job creation than Reagan (who cut them).
Let's talk about a 50% tax bracket for incomes over $1 million. Let's talk about eliminating the $250 billion/year in loopholes for the top 1% and some of the $500 billion/year in loopholes for the next 19%.
30
I agree but none of this will ever come from Republicans- they are run by the Koch's, the Mercer's and their wealthy donors.
The problem is our budget. The US government has been throwing a huge amount of money at losing wars for about 75 years now. The payback for this investment is dead and wounded young people, refugees, destabilized populations that produce and purchase things and of course lost productivity of the dead and the injured along with long term care for the injured.
We are also distributing surplus weapons to police, citizens and terror groups around the country. It's a vicious cycle of productivity loss that tax reform doesn't begin to address.
It's one thing to have tax reform. It's another thing to have tax cuts and increase weapons production and their distribution around the globe.
The tax and budget proposal isn't tax reform it's tax cuts and it's increased distribution of weapons and training which will create huge long term losses in productivity and cut GDP substantially with the possibility of the kind of inflation that followed the Viet nam war.
15
No attention is given to Fringe Benefit exemptions that effectively produce a zero rate of federal and state income tax, social security tax, and Medicaid tax often far exceeding the first $100,000 of compensation paid by a company to its top executives. They can include a cell-phone service, company-paid cars which comes with company-provided repair, maintenance, insurance, fuel, washing and detailing, home Internet and cable service, multiple newspaper and stock-line subscriptions. Family trips can be taken on company jets with personalized meals and unlimited bar, reimbursed to the company at commercial rates. Large personal life insurance policies for the benefit of the executive's family.
The other indirect monetary non-taxed compensation that often far-exceed fringe-benefit exemptions are quid-pro-quo full tuition to the executives children for large corporate donations to the school, large company contributions in return for stadiums named after the executive, nepotism and overcompensation of the executives children and expanded family members, and other similar quid-pro-quo and reciprocal family employment arrangements with the company's long-term accounting firms and law firms.
What doesn't muster with the IRS rules on exempt fringe benefits are often grossed up by extra monetary compensation that, when properly calculated, results in the same effect at greater cost to the company.
10
(cont'd)
he tax savings of deferred compensation and stop options are huge, but this is usually taken into account in calculations like Warren Buffett, who concluded that his secretary paid more of her salary in taxes than he did on his.
Even more in nontaxable compensation can be done by savvy small business owners.
All effective and accurate tax comparisons should start with those factors with respect to relative burden of the 1%. Who really are the givers and takers of this nation. The givers pay no taxes on what is considered low and middle class earned income. Let's not get into unearned income.
We've had tax cuts for the rich as the solution to everything since Reagan. Result: tax havens, offshoring, useless luxury goods markets, huge deficits, and monstrous inequality as sales taxes and other fees go up and up and up, burdening those who have the least. Then there's Social Security, which is capped and only charged on the income that people might hypothetically need, not the excess. That cap should be taken away, and the rate lowered, but regressive taxes are the Republicans' darling baby.
The evidence is that the supposed "job creators" have not been creating jobs, they've been removing value at the casino on Wall Street and abroad, hoarding, hoarding, hoarding.
And how exactly is an inheritance over $5.45 million not excess that should be taxed?
Republicans have successfully undermined old style pensions so 401Ks were supposed to be the solution (they aren't), but now they want to bleed the last pennies out of the elderly poor by taxing that too. Just don't tax the wealthy and their skimming investments, rather tax the money old people need to survive.
Same with health care: gotta get rid of anything fair while skimmers take the cream. God forbid we should have the power of a single market to keep profiteering down.
Reagan enabled worshipping wealth and made greed and victim blaming socially acceptable.
People calling themselves Christians and praying for "success" as god's favor? Jesus wouldn't recognize them. Try the Gospels.
26
" When the rich “sock it away,” that only means that they are spending or investing, which is to say, putting the money into the real economy just like everyone else. "
No, they invest it in existing assets--like the stock market--that start to bubble and reach historically high P/E ratios. None of the money is invested into capital expenditures or actual economic activity. None goes to workers. And none contributes to GDP.
33
The rich have a variety of mechanisms to avoid taxes, both legal and not so legal. They can move money offshore, create foundations, setup non-profits, etc.
Or they can just move overseas.
Business tax rates? Some large corporations pay few taxes. They manage their money to minimize "profits," and avoid taxes.
Frankly, I don't understand the benefit of fewer brackets. The bigger jump in rates tend to punish the folks on the edges of the income brackets. How does reducing the number of brackets make filing easier?
17
Agreed - I was going to say the same thing. And I really liked Bret Stephens until he admitted to not liking pistachio ice cream: incroyable!
1
I'd like to know how much investment in high end real estate, classic automobiles, and 100+ million dollar works of contemporary art actually trickles down to the middle class. Aren't most of those items purchased from the fellow rich?
5
I know quite a few very wealthy types and I hadn't noticed them spending wildly at all (that's why they are rich. Nor on things that help the general economy much.
Typically they have a few very expensive homes and undeveloped land for future use, maybe the odd exotic car, various top quality artisan products and food and travel and the rest playing the stock markets or stashed in hedge funds here or most likely abroad and huge tax immune trust funds for their ongoing dynasties.
18
Having worked with businesses on expansions/relocations for many years, I can say that tax rates, except when exceptional (e.g. a state taxing airlines on planes flying over the state, but never touching down), aren't a decision factor in business investments. Where's the evidence that businesses are withholding investments in the US economy because of tax rates? As JM Keynes said in 1930s, businesspeople make investment decision on their animal instincts (along with projections that just aren't that accurate since they don't control enough of the global markets they compete in). If the GOP were to conduct a national dialogue (with the Dems, I'd hope, like in something called Congressional hearings) on tax fairness, maybe we'd get somewhere, but as long as the GOP continues the charade that the economy will grow with lower tax rates, the conversation is a non-starter for rational discourse.
22
A single person who itemizes and lives in a high tax state like NY and pays high real estate taxes on their home or apartment will pay more in taxes not less. If the person earns $120,000 (which is not a lot in NYC) will not benefit from the $12000 deduction. Real Estate taxes are the same whether you are single or married. And, if the person has high out of pocket medical expenses they will do even worse is that deduction will be gone. But, no one is discussing singles and the effect on their taxes.
19
Even a married couple with two (or more) children will lose out as well. You're correct, nothing is discussed in a meaningful way. The overwhelming majority of taxpayers don't know how marginal rates work. It is hard to "discuss" anything in a nation that gets its news and information from Twitter and Facebook.
6
Now, I know why I am suspicious of Stephens: if he doesn't know how good pistachio ice cream is, how can you trust his judgment?
15
Brett’s idea that the rich will invest their tax break to make the economy work better for all of us has no basis in fact. And, in fact, the major unsolved problems in America today: opioid addiction, environmental preservation, health care, infrastructure improvement, ..., all require government action by a government with funding. We don’t need more mansions, more off-shore tax havens, more Lamborghinis, more private jets.
33
"When the rich “sock it away,” that only means that they are spending or investing, which is to say, putting the money into the real economy just like everyone else."
Mr. Stephens, here's where you seem to be living 75 years ago. Back when our country's wealth was more fairly divided among all of us, there was an argument that those at the top would invest their tax cuts in companies that produced goods, services, and resulting jobs, thus contributing to and benefitting 'the real economy'. These days, however, the people at the top have such an enormous portion of the country's generated wealth that there literally aren't enough actual investments in real-world companies for them to invest in. So what happens is a lot of that great slosh of money gets put into ever more exotic and opaque financial instruments that aren't investments in actual companies, but bets on how the financial markets themselves are going to perform - essentially the world's highest-stakes casino. This does nothing good for our 'real economy', but rather destabilizes both our financial markets AND the real economy of jobs and wages. When the top tax rates were 90% or 75%, or, heck, even 55%, maybe you had an argument, but we are NOT in a supply-side economic crunch. We are in a demand-side crunch, and shoveling an even larger portion of our GDP into even fewer hands at the top is only going to make things worse.
54
Well said! We are in a demand crunch because of low wages, not enough people have well-paying jobs, we pay too much on rent and housing, and WAY too much on health care. Meanwhile, rich people have a million ways to shelter their income and reduce their taxes. But the politicians want to give them and corporations more because they are the big donors to politicians campaigns. It's payback time. Corporations create jobs from before-tax income, not after-tax earnings. Cutting corporate taxes will not spur job growth. They will add jobs only if the demand is there. You are right.
13
Paul Krugman and others have told us over and over again that lowering taxes doesn't help the economy. We've seen that happen in Kansas in real time, in contrast to what's happened in California with higher taxes. We saw how the economy crashed with with the Reagan and later with the GW Bush tax cuts. The rich pay larger amounts in taxes overall, but they make so much more money! Then there's the bit about fairness. While, it does take a village to make the local real estate banker/financier who then earns several times more than the village teacher, the reasons for this discrepancy are still unclear. Also, the rich don't rush out and spend the extra cash they make. And this being a global economy, they don't invest it locally, but in the smaller economies that are growing at 7% rates!
Finally, Secretary Clinton has been right all along, Trump's base is largely a basket of deplorables. They all scream for nihilism.
22
I strongly recommend you read Paul Krugman’s columns and blog on the proposed tax cuts to correct the errors and assumption in your column about the supposed benefits of corporate and individual tax cuts. He shows through real world examples that we are one of the lowest taxing nations and lowering taxes on the rich do not “trickle down” to the rest of us. Also, deficits do matter because the republicans have played the long game and are at the point where they will increase deficits with their tax cuts to the point where they will be able to cut social programs like social security, Medicare, Medicaid, welfare programs, etc. thereby achieving their goal of making us the land or the rich and the home of the serfs.
16
Gail and Bret, you're letting Congress off too easy on this tax cut idea. You say that they're using budget reconciliation to so that the tax cut won't make the deficit worse. But wait! Congress is about to pass a budget resolution that allows for a bigger deficit in the first place, without any minority support and without needed Trump's signature. So they're changing the rules of the game to justify a larger tax cut for the wealthy. Talk about shenanigans!
19
Someone should clue in Bret that Truman, Ike, JFK, LBJ, Nixon, Ford, and Carter also took America into debt fighting the Cold War (as well as Vietnam).
Has anyone noticed what the GOP's "free lunch for the wealthy & business" economic policies have done to Kansas?
17
If you go to the Federal Election Commission website, you will see that as of today, $25 million has been contributed to Donald Trump's 2020 Presidential Campaign. This should make all of those who shudder at the current state of governance in this country stop and take pause. What will be the impact on this country of another round of 2016 campaign anarchy? It's time to put political extremism back in a box, not prepay our next round of living dangerously.
9
Don't worry--half of that will go to legal bills before the primaries even start....
Bret, your argument is short sighted: "If the rich benefit disproportionately it is only because they pay a disproportionate share of taxes."
the rich pay a disproportional share of taxes because for the last, say, 40 years they have received a disproportional share of income gain. middle class people have to a much lower, if any, degree benefited from productivity gains.
13
Pundits need to focus on the two-pronged outcome of these particular tax cut. First, they will provide more wealth, more power to the 0.1% oligarchy, thereby greatly diminishing these things for the rest of us. Without financial resources we will have little influence over the political outcomes on this country. Power will be tranferred through a bloodless, silent coup to a small, ever-more-powerful minority. We are becoming an empty shell of a once-heralded democracy.
Second more money in the hands of plutocrats and corporations leaves less finite resources in the hands of government - the only strong shield against abuse and tyranny by the wealthy few. Republicans often-stated goal is to weaken government enough so that it can be drowned in a bathtub. Here is the vehicle through which this can happen.
Never forget: For evil to flourish all that is required is for good people to do NOTHING.
12
Tax cuts is a vote getter, not an economic theory. Who says that cutting taxes will lead to 3% economic growth and it will pay for itself? Rich people. Who says that Estate Tax is double taxation? Rich people. We have a serious long term economic problem and we need solutions and we should abandon the vote getting and become radically centrist, bipartisan problem solvers. Trump is not the problem here, Paul Ryan is. Lets have tax reform, revenue neutral and yes tax the rich, they can afford it. We have too much wealth in the hands of a few, which stifles or consumer driven economy, Walmart is much larger than Saks, if the people in the lower reaches of our society get poorer, they won't spend money and the economy does not flourish. Declining wages due to increased productivity of capital is not going away. Demand for goods and services is only as good as the ability to pay for those goods. Supply side works in accelerating economies not mature economies. But go ahead and do the Kansas Experiment again and again. What about the budget deficit and debt? Forgotten so rich can get richer.
12
Bret: Reagan in 1981 or 1986, how did that work out, almost everyone agrees that 'trickle down' didn't work then, so why would you think it would work now?
The FEDs in a meeting in Texas said just last week that with full or near full employment where is growth going to come from.
5
Mr. Stephens seems to believe that a tax cut on the rich will enable the economy to grow at 3% or more annually. However, history is not on his side. Clinton raised taxes, and the economy grew, very well. GW Bush cut taxes, twice. and the economy essentially went nowhere. That is until 2008 when it crashed massively. Obama raised taxes, both in the PPACA and by eliminating the Bush's two cuts on the rich, and the economy continued to recover from the Great Recession.
There is one constant in all of the above: The Republicans were wrong on the effect of each cut or increase in taxes. So, the question is: Why should we believe them now?
13
Trump is a genius. He takes credit for anything positive and blames other for anything negative.
2
Is that what counts for genius these days?
While we can blame Trump for many things, Bret is off when he blames him for lack of bipartisan work on much of anything. The previous eight years showed that Congressional Republicans are the ones who broke it and now own it!
The great irony is that the name of the Senate process is reconciliation. I am reconciling myself to a tiny tax cut or maybe an increase. Too bad there isn't an Alternative Minimum Corporate Tax so all the games could be less valuable to them. Instead a partisan vote will likely reward companies for stashing money offshore and then we will wait for the huge benefit to workers that will trickle down. And the current AMT will be tossed too.
2
"When the rich 'sock it away,' that only means that they are spending..." That's positively Orwellian!
9
Trickle-down economics has always been a ridiculous idea. Are there any serious economists who believe in it? If money naturally trickled "down" to the poor, the poor would be rich and the rich would be poor.
Wealthy people spend some of their money in ways that can help the economy, but people living from paycheck to paycheck spend all of their money in ways that help the economy, and often more directly.
Investing in the stock market, for example, is more likely to just make another shareholder (on average not our poorest citizens) a little wealthier. IPOs help companies going public, but most investments aren't in IPOs, and IPO prices are typically set slightly low (to the company's detriment), so banks' best customers will be given access to shares as a privilege, the value will go up, the bank's customers benefit, and the IPO is considered a "success".
People with many millions in the bank aren't going to build a house just because they got a tax break. They could have already afforded the house, and just about anything else they wanted to buy from a non-rich person or group of non-rich people. And if you work at an investment bank or a hedge fund, you're probably not going to hire a new employee if you get a tax cut.
As someone who has had very lean years and years in which I made much more than I could spend, I would have certainly been glad to pay higher taxes in the years of abundance in return for paying lower taxes in the years in which I was squeaking by.
6
Two things: 1. On tax cuts for the wealthy and big corporations. As the lower classes have stagnated these last 20 years, the wealthy have done quite well. And corporations, are they reeling from high taxes when the stock market demonstrates that profits continue to soar? I guess my question is what is the threshold on disposable wealth and profits that will result in higher incomes for the rest if society? How do we know we aren't being taken here? And if the increased wealth for the wealthy and corporations doesn't translate into higher growth rates and increased income for the middle class, what will be the consequence? 2. How disciplined is General Kelly if he has no problem piling on to Trump's poor approach to this widow's loss? If he can't stand up for the fallen without following orders and extending a false narrative, how will he stand up and say "No, Mr. President. Take your finger off the button".
4
Those who benefit most from the system should pay the most to preserve that system. It’s both fair and in their own long-term self interest. And, because a few thousand people already own about half of everything in the US, we need a wealth tax along with a progressive income tax. 1% per year of net worth greater than $5 million would go a long way to eliminating the federal deficit.
"Another means of silently lessening the inequality of property is to exempt all from taxation below a certain point and to tax the higher portions of property in geometrical progression as they rise." - Thomas Jefferson, Letter to James Madison, 1785
"I like paying taxes. With them I buy civilization." - Paraphrase of Oliver Wendell Holmes Jr., United States Supreme Court Justice, Republican
7
The argument that we need to provide more money to those that invest and the corporations to stimulate the economy makes no sense. Since the wealthy and the corporations already have a disproportionately huge part of the wealth, where is the fantastic economy that is promised?
Jobs are created by CUSTOMERS not bosses. If we want to reward businesses with tax credits AFTER they create jobs, that is worth considering.
There is a great op-ed by a wealthy venture capitalist that lays out the truth:
http://www.politico.com/magazine/story/2017/10/11/republican-tax-cut-for...
7
Under the current tax system, billionaire Trump can pay no taxes, "because I'm smart." I'd like to see reform to fix that problem, but that's not what the Republicans have in mind.
5
Did it ever dawn on anyone that our economy is dependent on consumers buying things they don't need, can't afford, and will break down and need replacement in a couple of years if they're not obsolete by that time?
2
The equivalent of the 6th grade class president promising no homework if they get elected.
Sometimes eliminating homework is useful, like when its burdensome and unnecessary. Sometimes its detrimental, like when you need to learn. Same with tax cuts.
6
If you look at historical US and world GDP % increases over the past 50 years, you see a constant decline: https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG. This makes sense if you look at the world as maturing and becoming more saturated with economic activity. A half planted field can increase output more than a fully planted one; a baby grows a larger percent each year than a 16 year old.
So, we see a long 50 year trend, and no one wants to analyze why, and everyone thinks we can flip some switch and go back to high growth. I believe that unrealistic expectations of growth is our primary problem. It leads to decisions that merely keep adding to our debt without accomplishing their objective. People sense there is something wrong if we are not growing as much as in the past, yet it is a natural trend in maturity. I believe the focus should be on reducing inequality rather than continuing to roll the dice on 'trickle down' growth. Rich people will always figure ways to make more money without government assistance.
5
Corporations are awash in money. They hold more than $3 trillion of untaxed dollars offshore. There have never been more billionaires in the United States. Yet, the GOP claims that a tax cut is needed to stimulate the economy. They need better, less transparent lies to sell this tax cut.
The real goal of this tax cut is to eliminate the inheritance tax which would save hundreds of millions of dollars for a certain Orange-Hair President and the Kochs, and the Mercers and all the other super rich who have bought control of our Congress, Courts and Presidency.
7
"When the rich sock it away, that only means they are spending or investing." Won't most of that spending and investing be in automation and globalization? If so, this new version of "trickle down" means lower wages and fewer jobs for working people.
3
tax cuts for the corporations and the other rich 'people' will not help average, middle class or working class people. any 'jobs' created will be part-time, minimum wage, zero-benefit dead-ends. we have enough of those already. want to do something to actually help real people and improve the economy? raise the minimum wage and require corporations to offer benefit plans to part-timers. let me guess--we can't afford that!
2
Bret Stephens: Asking me about tax cuts is like asking a child about ice cream: Some flavors might be preferable to others but it’s pretty much all good (with qualified exceptions, like pistachio).
Tax cuts prevent infrastructure repair that would create new jobs, and pistachio ice cream is yummy.
4
OK Stephens. What difference does it make if there are three or seven tax brackets? Looking up your taxes involves what ten pages in the tax instruction booklets or even some formula inside your computer. Totally insignificant EXCEPT AS TALKING POINTS.
Simplifying taxes has NOTHING to do with brackets. It has to do with exemptions, deductions and the other twenty thousand pages of the tax code. Why don't you discuss all the loopholes for companies and hedge funds. That is the heavy lifting.
3
Gee Bret, American corporations and rich citizens have been sitting on massive, unprecedented profits for several years now. Those profits have been spread to shareholders and executives, and parked in offshore tax havens. There has been almost zero reinvestment in this country, and very little hiring. In fact, tax cuts at the top have NEVER trickled down to the vanishing middle class of this country. It is insane (literally) to think that shoveling more money upward would change this result. But the modern GOP has never been big on sanity.
4
The idea of tax reform has predictably given way to the call for a tax cut. I have never heard of a tax cut that was not popular as long as enough tax payers could say "I got mine". Tax reform, however, does not focus on reducing taxes. Rather, its focus is on funding the operation of the government in the most equitable manner possible. That requires the government to be excused from the process of picking winners and losers. This the Congress cannot abide. The country will therefore continue to reward and subsidize marginal economic activities based on the whims of the Congress instead of focusing on the most efficient and least intrusive means of raising money. The process is hopelessly corrupt and unlikely to change.
2
OK, can we have a little more discussion about the rich paying a disproportionate share of taxes? Disproportionate on what basis? Is it disproportionate (read: unfair) for one rich person to pay the amount of taxes that thirty poor people pay, because it's one person vs. thirty? Or that the rich pay a high fraction (50%? more?) of the total taxes collected? Is it unfair because those masters of the universe got that way through sheer hard work, and, by gum, they should keep every penny that they earn through the sweat of their brows?
No, it's not disproportionate. Forget for a moment that social mobility is dead in this country and that most of the rich were born on third (and some think they hit a triple). It's not disproportionate because we live in a civil society, in which the circumstances of one's birth should not choke off opportunity. And government, funded by taxes, is the main engine by which opportunity can be provided to its citizens.
I would really like Mr. Stephens, who seems like a reasonable dude, to explain his view here, because I really don't get it.
2
Reagan Reagan Reagan,,, the drumbeat of The R Word, for starters he did lower taxes but when it was found that it wasnt working he raised them again then the economy got back on track still when he walked out the White House he left us with a deficit as opposed as Clinton that raised taxes on the rich and left a surplus.
5
As a solidly middle class worker, I am really tired of trading public infrastructure improvement for tax cuts to the wealthiest. And while the USA has a higher corporate tax rate, we all know that not many (if any at all) pay that rate. It’s disingenuous to compare to other nations because in other nations the individual tax rate is high because in other wealthy nations citizens get a lot more for their taxes, like healthcare, for instance.
Politicians have been promising the middle class a tax cut forever, it’s never more than a hundred bucks if that. And taking away middle class tax deductions to help pay for it isn’t going to work, either.
Why would we believe the hucksters in Washington want to do anything that will life up the 99% when their default is doing everything to hurt us (for instance the EPA’s current path of making America stink again)?
“Tax cuts” do not grow the economy. Tax increases do. This has been proven over and over again. I just can’t believe how many Americans keep believing Lucy when she puts out that tax football. It’s such a lie Charlie Brown, don’t fall for it.
3
Applause and 21-gun salute! How right you are!
We all scream for tax cuts because all the taxes -- with the exception of direct tax on income earned in the sweat of one's brow -- are immoral and confiscatory. For example, money spent on acquiring a real property was taxed during the period of capital accumulation, and the subsequent taxing of the property is nothing but double taxation.
This whole "double taxation" idea is nonsense. The notion that property is forever after tax free is ridiculous.
The rich don’t create jobs, consumers do by stimulating a demand.
Tax cuts never pay for themselves, it’s a fairy tale or a ploy.
Tax cuts for the rich increase inequality and harm the economy over the long run.
More money for the rich and corporations means more political buying power. It has turned DC into a cash cow for special interests.
To think this to an end: tax cuts further erode democracy and turn the US into a money laundering oligarchy.
3
To assist the wealthy to "trickle-down" their new found pile of money (assuming the tax cut goes through) I'm thinking I should change the pricing structure for the products I sell at my store from "volume-based pricing" to "income-based pricing". You make $25k a year, it's $0.10 per. You make $500k a year, it's $.50 per. I promise I will spend my new found wealth and hire lots of maids and gardeners. What do you think?
2
We’re like a nation of selfish undisciplined spoiled brats throwing a tantrum for more cake, more ice cream and more candy. Can we afford to cut taxes when we have a $20 trillion federal debt and another $100 trillion unfunded liabilities? Where is the money going to come from to pay for Trump’s increased defense spending? Where is the $1 trillion going to come from to rebuild our nation’s infrastructure. As the debt grows, so will interest payments on that debt. We are already paying over $360 billion per year in interest on that debt. If we had no debt, then we could have the debate on whether to cut taxes or use that money for important projects. On our current path, we are like the Titanic, sailing like we are the ruler of the seas – headed for disaster.
3
"When the rich “sock it away,” that only means that they are spending or investing..."
You're an economist? "Socking it away" has NEVER meant spending.
As for investing: in what? Hedge funds? Credit default swaps? High-speed money-juggling? Financial transactions, now 45% of GDP, mostly benefit only the trader. To produce a dollar's worth of "financial transaction" requires one-tenth the input (energy, labor, supplies, equipment) of a dollar's worth of productive work, defined as making things for people to eat, wear, live in or make more productive stuff with. And therefore generates only one-tenth the employment.
Viz: Facebook, on paper one of the world's most valuable companies, has 2 thousand employees. Owing to the "internal logic" of capitalism, that is rated successful. So what? Cut corporate taxes, and its shareholders employ more pool boys, parking valets, hotel maids, groundskeepers and security guards.
No thanks.
3
Wow. He really comes out and says it is all about tax cuts to the wealthy.
4
I see that Bret is extolling the Reagan tax cuts. He doesn't mention that the deficit soared so that Reagan had to raise taxes 13 times. PB
2
When good $25 hour jobs are replaced with dead end $11.25 jobs, people who promise to do something about it get elected. Trump made promises to eliminate NAFTA and deport people who willingly work for low wages. If he makes progress on those promises, he will get re-elected. I don't understand why anyone is surprised about this. How would your life change if you had to work for $11 or $12 an hour? If, during an election, no other candidate but one seemed to recognize your problem, why would you not vote for that person? If a person makes $11 or $12 an hour, he or she does not pay tax, so tax cuts will have no effect on how that person will vote.
42
I think most jobs actually start closer to $9 these days. The employee only gets bumped to $11 or $12 after working the job long enough for a performance review. Even then, the raise is competitive. The first struggle is just getting full-time employment anyway. You can work for a year or more before the company will ever even "hire" you. After that, you can start negotiating a living wage. I'd guess another year or even two before you're actually given a raise. Maybe the story is different in some major cities but I would say $12/hour is way too generous for the majority of Americans.
1
Trump has nothing in the works even remotely associated with trying to fulfill that promise. More tax cuts for corporations will not bring back high paying jobs for depressed white males aged 25-59 (his core constituency). Republicans have been successful in divorcing traditional white working-class men from Great Society ideals but left them holding the bag with nothing in it. More guns to shore up their wounded masculinity won't help at this point. This has to do with psychology and pride. Trump hides behind false patriotism and generals while he continues the tired bromide that problems are caused by immigrants and minorities. This goes all the way back to Nixon.
2
NAFTA did not eliminate good paying jobs from $25 per hour to $11.25. Automation, technology, IT, and robots are doing that dear one.
3
No, we don't all love tax cuts. Tax cuts are destroying everything we've built in this country, starting with our crumbling infrastructure.
Trickle down economics is nonsense, funneling money to big business does not create jobs, and reducing the government to the size of a postage stamp that does nothing but control women's bodies and maintain an oversize millitary to involve us in endless wars will not return us to non-existent good old days of wealth and freedom for all.
We need to increase federal taxes and start practicing demand-side economics. Let government create jobs sgain, like it did when the space program spawned entire industries.
If the Republicans get what they want, it won't just be Flint with lead in their water.
3
It's admirable that Mr. Stephens publically foreswears his Republican Party -- what capable thinker wouldn't at this absurd point. But he falls back, again, on Republican tropes and fantasies about taxes. Many here have taken him to task far better than I could, and thanks you all. But what the heck is it that prevents Republicans (and Stephens is a Republican no matter what he says) from seeing the unambiguous evidence that their fanatsies of economic growth caused by tax cuts is hogwash in light of the contrary evidence from the last several rounds of tax cuts? Are even the most capable of Republicans so blindly incapable of seeing actual evidence, so immune to the reality that their decades-long, always-weighted-to-the-already-wealthy tax experiments have failed to produce the results they still claim will magically appear this time? Makes one suspect that maybe all those rosey visions of middle-class growth were a sales pitch designed to obscure the real reasons for the tax cuts.
At this point even such as Stephens are running on magical thinking and faith-based fantasy at best and sheer mendacity at worst. It's enough to write off the whole party as irredeemable. Stephens says he has left his party, but he hasn't, really, if he continues to suffer from its obvious and on-going delusions.
But yes, he's a nicer guy than most of them.
2
Sorry, Bret, but I just have to ask - What's the Matter with Kansas? You, know, that laboratory of democracy for supply side economics whose credit ratings get cutting cut?
2
No question about the fact that General Kelly blew it in his comments defending Trump's outrageous condolence phone call. They were deeply inappropriate and out of keeping with his character and performance in any office in which he has served, including his present post. This one misstep should not be used to smear Kelly and negate all of the good that he has achieved. He is an honorable man who has been dropped into Trump's sewer and until now has remained untarnished. Now is the time to support his containment efforts but with a wary eye against a repeat performance. Weakening Kelly further dashes any hope for any semblance of sanity in the office of Bone-Head Bone-Spur
2
Our economy has prospered when we have made public investments. We prospered when we invested in canals, railroads, and roads. We prospered when we invested in public education at all levels, including universities. We prospered when we invested in scientific and technological research. Those investments have weakened in my lifetime. The result is a weaker economy that does not serve the people as well as it could or should. I am also skeptical that economic prosperity will lessen the hatred toward “the other” that I see coming from too many Trump supporters.
3
Bret, I would love to see the data and scholarship that supports the claim that cutting taxes will result in 3% sustainable GDP growth. Since 2000 real GDP growth has been about 1.5% annually. Historically, we have had 3.5% annual growth (1946-2000). The problem is not supply, the problem is low demand.
Given that we have a birthrate below replacement, a rapidly aging population, and a GOP that is anti-immigration, how exactly do we get back to a historical average 3.5% annual growth, or even 3%, sustained? Tax cuts? Oh, please.
2
So now the right-wing position is that tax cuts will miraculously lead to "robust economic growth" which would somehow "take much of the air out of Trumpism."
And everyone who opposes Trump should go along with the tax cut fantasy this time because it will diminish Trump?
I have to give these guys credit for their consistency -- no matter the problem, tax cuts are the solution.
1
"When the rich “sock it away,” that only means that they are spending or investing, which is to say, putting the money into the real economy just like everyone else."
Mr. Stephens, here's where you seem to be living 75 years ago. Back when our country's wealth was more fairly divided among all of us, there was an argument that those at the top would invest their tax cuts in companies that produced goods, services, and resulting jobs, thus contributing to and benefitting 'the real economy'. These days, however, the people at the top have such an enormous portion of the country's generated wealth that there literally aren't enough actual investments in real-world companies for them to invest in. So what happens is a lot of that great slosh of money gets put into ever more exotic and opaque financial instruments that aren't investments in actual companies, but bets on how the financial markets themselves are going to perform - essentially the world's highest-stakes casino. This does nothing good for our 'real economy', but rather destabilizes both our financial markets AND the real economy of jobs and wages. When the top tax rates were 90% or 75%, or, heck, even 55%, maybe you had an argument, but we are NOT in a supply-side economic crunch. We are in a demand-side crunch, and shoveling an even larger portion of our GDP into even fewer hands at the top is only going to make things worse.
1
Tax cuts in the rich crashed the economy under Bush. It's fake growth and kills jobs, because it removes the incentive to spend money on hiring to look less profitable. That's been the issue these 40 years, surprisingly, helping the rich ... just helps the rich.
1
So, the theory that tax cuts generate growth... where has it been demonstrated effective? We don't have particularly high taxes, especially once all the loopholes are employed. And investment gains are taxed at a low 15%, which has inspired people to keep churning vast amounts in gambling on small price differentials in Wall Street casinos.
How about this? Tax cuts for expanding employment, wages and benefits, and hike the gambling tax on Wall Street to 90% for trades which are help for less than a month.
If we want to expand growth, we need to expand demand, and that means jobs. A tax cut is the Rube Goldberg way of getting there. Why wait for the ball to roll down the ramp, trigger the lever, pull the string, flick the switch, release another ball, knock two more into play, and finally push the right lever? Just push the lever... invest in federal projects.
Sorry, I just don't buy the Republican dogma.
1
If somebody would start a political party of practical centralist members, I would join in a minute (a New York minute). What ever happened to getting things done, making things work, repairing the roads and bridges, and caring for the world we live in? Oh, yes, I would sign up in a heartbeat.
1
"When the rich “sock it away(the tax cut)", that only means that they are spending or investing, which is to say, putting the money into the real economy just like everyone else. They create jobs when they build a second home or become angel investors in a promising start-up or reinvest in their own businesses."
Well, building a second home with your tax cut creates jobs, unless the tax cut prevents the government from building a school or a bridge, which also means jobs. I'm not sure either why the rich would need a tax cut to invest, unless they are liquidity constrained, which does not seem to be the case today. They could also just invest the tax cut abroad (which does not create jobs) or invest in government bonds, which would be issued to cover the increased deficit created by the same tax cut (so you transform taxing the rich into borrowing from the rich). No really, I'm appalled by the simplicity of the arguments presented, claiming that tax cuts systematically increase growth, which seems more a religious dogma than anything predicted by economic theory or experience. Sad Gail let it go without challenge.
1
"Reducing the taxes of the rich will magically improve the lot of the poor and middle class:" under Reagan this was known as voodoo economics. A basic line graph that a three year old could understand shows it to be untrue. The base isn't buying it but the heavy hitters who donate to GOP candidates are totally on board. Members of Congress who don't go along fear they will be Bannonized.
2
Stephens says: "This isn’t because I’m greedy for myself or my friends in the plutocracy. It’s because I think it’s necessary for the United States to get back to an annual G.D.P. growth rate of 3 percent or more."
I would like to see Bret Stephens physically grow 3 percent or more each year.
1
OMG. The simple fact is too much wealth is being channeled to too few people. The top tax rate should go to 50%. Of course they pay more of the tax burden. They receive more of the benefit. It is a demand economy. If the majority does not have enough to demand products, the economy stagnates and the only beneficiaries are those that sell global products to a global economy, because they have even less than us.
The economy is like the lottery. Only a few, a very few, a very very few will win. You play the lottery, you will lose. So, please tell me, why people believe that they will win. Why do they go against the best odds and play the middle?
1
Last I checked, Trump wanted the Alternative Minimum Tax to be deleted in this so-called tax reform. If that's still the case, I hope some Democratic Senators put up a very public fight about it.
There is no difference in OPINION between liberals and conservatives on this taxation issue: simply a difference between reality and fiction. History and facts demonstrate that lowering the statutory corporate tax rate does not necessarily stimulate investment or create jobs at all, but instead results in higher ceo salaries and shareholder dividends. Many of the largest corporations already have billions of dollars on hand (“socked away”) to invest in job creation should they want to, both in the US and in the Caymans. It’s fictional, (and a logical fallacy) to insist that lowering the corporate tax rate would magically incentivize them to build up their workforce.
However, spending federal tax money on large-scale infrastructure rebuilding efforts all over the country WOULD result in growing our economy. See history. But the government needs tax dollars to make this happen: more tax dollars, higher taxes, not lower. And if Barron trump inherits a few million less, it is difficult to see how the economy would suffer, quite the reverse.
Until conservatives, like Mr. Stephens, can get over the tired fantasy of trickle-down and admit reality, we will continue to have this dysfunctional so-called “difference of opinion”. See Kansas.
2
I was shocked by the comments of Bret Stephens. Apparently, he knows little about macroeconomics. He favors tax cuts for the rich in order to increase economic growth! More yachts instead of more expenditures on infrastructure and education? Did I say "expenditures"? We must all stop using that word. It is investment!
1
Tax cuts in time of war seems rather unseemly. The opposite should happen. It would pull the country together with a common goal.
Whatever the arguments regarding “tax cuts”, one basic aspect of Capitalism remains as the cause of the disfunctional US economy.
Capitalism only works for a majority of any nations citizenry when it is controlled. The only effective manner to achieve control of Capitalism is through progressive taxation.
So called laissez faire Capitalism - “unfettered” by seriously graduated increases in tax rate as income rises - will produce a model exactly as has risen over the thirty years of US tax cut machinations.
Tax cut fever has teamed up with Automation to create and propagate the increasingly gross disparity between the majority of Americans - particularly working class - and the wealthy.
If that is the America that you want, it is already present.
There is no indication that the tax cuts vaguely forwarded by various GOP figures would generate sustained economic growth. Factoring in an inevitable explosion of national debt, longer term results would be quite the opposite. Historical awareness of a mere ten years offers evidence enough.
The "middle class miracle" touted by the president is anything but. The same goes for the poor. Lowering the taxation floor to $10,000 hits the poorest among us hard. Eliminating the state and local tax deduction does likewise for middle income Americans, as does lowering the 401(k) retirement savings cap.
All of this discussion, of course, ignores the grossly regressive attributes of other forms of federal taxation such as payroll taxes and the obscene goodies, existing and proposed, for the über wealthy who want for nothing.
I too would like to see the corporate tax rate reduced and all the loopholes closed so that the effective rate was actually increased but now spread fairly across all businesses instead of favoring the biggest. What amazes me about the wealthiest tax cut supporters is their inability to see that a rising tide would lift their boats. They’re willing to trade the short term gain of a tax rate for the long term opportunity of even greater wealth if the tax regime was adjusted to grow the middle class and promote upward mobility. The aristocracy of a poor nation will be poorer than the aristocracy of a wealthy nation.
Brett suggests tax breaks for the rich will be good for the economy: we need more private jets, mansions, Lamborghinis, and off-shore tax havens.
1
I'm not buying the theory that by giving the richest Americans tax cuts they will have more money and therefore send it, putting more money into the economy. Over the past few years we have see more and more evidence that the richest among us are putting money off shore, creating blind trusts so no one can find their money, and when they do start new companies they aim to do it in a way that limits their tax burden.
No. It is the upper middle class, the middle class, and the poor who spend all of our money in the economy. Not the top 2 %.
We will have one party that denies Russian involvement in American politics and one that doesn't. Then, of course, we have the libertarians. They are always mentally secure.
Trump's base will not win him another term. The last victory was a fluke, brought on by hatred of Clinton. Trump might very well not even get the next nomination for president from his own party. The Republicans will launch another candidate and Trump will run in his own party TR style.
Speaking in simple terms to the supposedly hard-working conservative Trump base, we should note the $20T debt and ask one question. Do you want give the ultra-rich billionaires a huge tax gift when the government still has massive debt and future obligations? That's not the way individual families take care of their finances.
Oops! My mistake. That question only applies to Democrat administrations.
Today things are different. Billionaires are going to Disneyland once they build their own Disneyland. That's the way it works under Trump.
Now, how are you planning to spend the $50 tax cut designed for middle-class tax payers?
Really? We all scream for tax breaks for the rich (where every Republican tax policy lands). How about we all scream for affordable health insurance, living wage jobs (which tax breaks for the rich do not create) clean air and water. Apparently a lot of the CEOs must be crowding your offices since no one other than corporations and the .01% are screaming for tax breaks.
3
Bret is spewing ALEC and Heritage Foundation talking points. He is ignoring history. Did the economy suffer under Clinton or Obama tax increases? After Bush’s tax cuts, the economy had the biggest downturn since the Great Depression. Remember that? Income for the bottom 40 percent is less today than it was in 1999. Profitable corporations that have exploited loopholes and pay less than 20 percent on average actually shed jobs over the last eight years, according to a report by the Institute for Policy Studies. The economy is working for the elite and even the upper-middle class. These groups incomes are growing. They do not need tax cuts. The groups that need a raise and will spend that raise, thus stimulating the economy, will not get it under the current GOP tax frame. Enough with rhetoric claiming tax cuts are a panacea.
In the 36 years since Reagan's election, the Republican solution to every problem has been "tax cuts" for the wealthy. Poverty? Tax cuts. Education? Tax cuts. The environment? Tax cuts.
Some tax cuts have worked better than others. Some tax cuts have not only not worked, but they have had the reverse effect of that originally theorized. But there is one universal truth to every tax cut enacted, as the top individual income tax rate has been reduced by over 50%. The wealthy have kept every penny of the tax break they received. Aside from all the theories about what the effect on the rest of society will be if we would just make the rich richer, the one eternal truth is that we have, in glorious fact, used government policy to make the rich richer. Their increased wealth is not contingent on any of the "Trickle Down" theories working. Good things may or may not happen to anyone else but, no matter what, the rich will get theirs (& just a bit of yours, thank you).
Robust economic growth doesn't act as a multiplier when the prosperity is not broadly shared. That's the whole problem. What good is 3% growth when wage growth is stagnant? Even in the best of circumstances, only about a third of the tax cut ever trickles down. This is not the best of circumstances. The proposed tax cut is not designed to relieve economic anxiety. It's welfare for the rich. Don't get me started on the disease of venture capitalism either. If you consider angel financiers a positive development in the sustained well-being of our nation, you clearly know little to nothing about corporate finance. I'll forgo the tangent for now but I could write you book.
As for parties, I wish the Clinton-Democrats would just cross the aisle already and stop pretending. Republicans can have their party back and the rest of us can stop pretending any neo-movement represents the broader public interest. Ice cream? More like a snow cone. Red or Blue, they all taste the same. Steven Rattner even threw out a fresh attack against the progressive left today. How naive. The center will not hold across two parties. They either unite or disintegrate. The challenge for our democracy, and here I worry at types like Stephens, is allowing the fringes to operate independently of the established powers.
If history is any guide, the answer is no. They will abuse their power ruthlessly in order to crush any opposition. In which case, I'm happy to drive a wedge right between their intentions.
Deficits are are burden on the future, on our children, perhaps on our own retirement. There is no free money. Like any deficit spending, there comes a time to pay the piper. Perhaps like heroin, the first uses make you feel good - for a short time, then heavier doses are needed. Finally, but soon, it's time for death or cold turkey.
So the deficit problem is a short term, quickle phantasy that chooses to overlook a longer term reality. And the long term is likely to be soon, with rising interest rates as the deficit heads to thirty trillion and beyond, and higher federal deficits stemming from climbing interest payments on the higher debt and higher rates. Then we arrive at what has recently happened to Greece and Puerto Rico. Very cold turkey!. By then the rich and powerful will have galloped out of town with their Treasury loop and working people will feel the pain of fewer jobs, a bleak future, declining housing prices and a falling equity market. All for a short term heroin fix for the wealthy!
There is no real evidence of any kind that a tax cut of the kind that the Republicans might achieve could affect the growth rate of the GDP, at all.
When Bret leads off with "I think it's necessary... Robust economic growth would solve a lot of problems.." this construction is less justified by evidence than "I think everybody must wear propeller beanies ... Robust growth..."
This latter nonsense statement might very well be a less harmful policy because it would not exacerbate the lack of opportunity and resulting lack of development of human capital that threatens our continuing democracy.
Bret and all Republicans need to read (or reread) Gibbon's "Decllne and Fall..", consider the causes of the French and Russian revolutions.
It is the nature of wealth to use its power to shift all the costs of society onto the poor and middle class, to acquire more wealth. And the inevitable happens -- the bulk of the people have nothing to lose through revolution, or letting the Huns rampage the country ... or voting for Trump.
1
This column made me think of two articles I read yeasterday. The one in the Times about how warehouses that pay less then $20 an hour are the new employment boom. I would be in favor of cutting taxes for those companies if, and only if, all the tax cuts went to wages.
The idea that companies, or anyone, are holding back because of taxes is ludicrous. We have more startups than we know what to do with because they think they can make money. Commenters in these columns who own businesses have repeatedly said decisions are made based on opportunity, not taxes. Tax cuts are about one thing. Greed. I made it and I don't want to share it.
The second article in the New Yorker was about the Sackler family which became billionaires feeding the opiod crisis with their creation OxyContin. Of course taking no responsibility for their lies and marketing strategies. Yep, regulation is awful, especially if it gets in the way of making money.
When I don't have to read stuff like this, I will begin to believe Mr. Stephens.
1
It is a depressing fact of political life that parties all too often are prepared to sacrifice not just principle, but the national interest on the altar of party unity. The Republication party needs to split and cleanse itself of its Trump and Bannon wing. Until it does that and America has a sane and sensible right of centre party again, American will suffer.
In a similar way, the desperate attempt to keep the UK Conservative party from splitting over Europe, a struggle that has been going on for nearly half a century, is going to seriously damage that country.
Both parties need leaders with courage and vision. Sadly, neither seems to have one at the moment.
"When the rich “sock it away,” that only means that they are spending or investing, which is to say, putting the money into the real economy just like everyone else." says Bret.
I don't see this at all. How much of their money is going into black PACs and slush funds to fund candidates who will deliver even more tax cuts? I suppose you could consider that "investment." How much is going abroad to tax sheltered real estate, for example? How much is going to fund destabilization campaigns abroad (just as Russian/Ukrainian Oligarchs are doing here)?
Also, know that 3% growth is not necessary in a stable or falling population. We aren't there yet, but we will be.
And even more: what kind of drag on the economy is it when there are so many lower middle class who don't make enough even to take advantage of tax cuts? What is the drag caused by the massive unrest spreading throughout the US?
There is no reason at all the top 1% should absorb EVERY bit of surplus and be compensated and wealthy in virtually inhuman ways. It hurts the economy. No tax breaks for this group! They are FINE without them.
This article was remarkably short on specifics. No mention of plans to abolish the estate tax or AMT. No mention of taxing "pass-through" income hidden in newly-formed corporate shells. No mention of the three-brackets idea, the cut to the top rate and increase at the bottom. One gets the sense that Collins and Stephens have little to say about actual tax policies. If so, then they should be writing about something else.
Bret Stephens assumption that the tax cuts to the wealthy will create investment is totally a myth. When Obama bailed out the banks in 08, for example, they sat on the money. Which is what the top tier is doing right now. Times have changed. Literally, many are just waiting for the "end" no matter how they conceive it. If corporate rates come down there will NOT be a massive reinvestment in this country to create 3% GDP Pipe dream. No matter how hard people like Stephens say they want to repudiate Trump, they simply won't admit their behavior for the last 37 years pushed us into this gutter.
If the tax cuts go through in any semblance of what they are now, the economy will collapse. You simply cannot pull that much money out of the economy at one time. A massive depression, on the order of the 1930's may be about to occur. And all the dancing around the issue will not prevent it. Most tax rates. except on the lower and middle tiers, should go up. And significantly. Deal with it.
So we're buying trickle down again?
Gail's point is a good one. There's no point in capital accumulation without capital velocity. Or, as she put it, the lower and middle classes will swiftly spend additional money they get (velocity) while the wealthier folks will, as they have in the past, develop prostate problems while howling that the deficit they've increased - and it will - requires entitlement cuts.
As for the bipartisan Reagan era tax reform, it was a coalition of Republicans, Blue Dog Democrats and Yellow Dog Democrats, the last group a nearly extinct species. It would not be regarded as bipartisan today.
"When the rich 'sock it away,' that only means that they are spending or investing, which is to say, putting the money into the real economy just like everyone else. They create jobs when they build a second home or become angel investors in a promising start-up or reinvest in their own businesses." As Robert Goldschmidt points out, this is just another tired old lie. There is enough evidence now to the contrary that it can only be called a lie. The multiplier effect of getting more money into the hands of workers dwarfs the small effect of making the rich even richer.
But as Upton Sinclair said, "It is difficult to get a man to understand something, when his income depends upon his not understanding it." Anyone who still touts that trickle-down nonsense can be counted on to have a 6- or 7-figure income. Just ask any ordinary person if they think that it makes sense to give the richest 400 families an extra $7,000,000 a year, while giving a few hundred dollars a year to a family making under $75,000. That's what the GOP tax plans have in store for America.
1
Does everyone forget that the purpose of taxes is to raise enough money to fund the government? We are already running huge deficits. While borrowing isn't always bad, I fail to understand why reducing taxes (and therefore borrowing more) is a good thing. If taxes really were hurting investment there might be some argument for a tax cut . . . but with companies sitting on wads of cash is a lack of investment really a problem? Maybe consumption could be higher, but I don't think that's a problem either. Tax cuts solve no problem . . . they just leave the government ever more in debt. Americans need to stop acting like spoiled children . . . and, while they're at it, stop electing spoiled children as their leaders.
Stephens is still drinking and trying to share his Kool-Aid that tax cuts will grow the economy and not adversely effect the deficit.
There's zero data or proof that these two statements have any basis in truth.
2
To quote: "When the rich “sock it away,” that only means that they are spending or investing, which is to say, putting the money into the real economy just like everyone else."
If this were remotely true, we'd have been awash in jobs since Kennedy first dropped the top rate from 94%. If it were remotely true, the last 50 years would be extremely different: we'd have had an effective unemployment rate of zero; there would be competition in the labour markets so that even Americans would pick fruit; the wealth gap would have decreased instead of increased; and, we'd be screaming for new immigrants to come to this land of plentiful employment and help us out. We have cut taxes on the wealthy to the bone, yet wages are in decline, the wealth gap has skyrocketed, and people fear losing their jobs.
The whole "tax cuts creates jobs" meme is a scam, borne out by its feeble track record. The only real purpose of the tax cuts is to give the wealthy more, so they can turn around and loan it back to the government to cover the deficit. Contrary to popular belief, most wealthy aren't angel investors, they park their money in boring places like bonds, aka loans to the government. So not only do the wealthy get a tax cut, they get a guaranteed return on investment, paid for by the rest of us.
1
Maybe Mr. Stevens can point our some facts having to do with the worn out notion that there is a relationship between low taxes and high economic growth because, so far as I know, there simply isn't. (Someone ought to remind him the Dow just hit 23,000 for the first time in history last week.)
Waiting for the economy to spark up as a result of giving the middle and lower classes a few economic cookies is like fishing without any bait on the hook: you might snag a couple.
If you want growth, equalize the burden among all taxpayers, human and corporate, and by getting rid of the loopholes, then get to work by spending on infrastructure, education of all kinds, and helping industries which have been hit by unfair competition.
Republicans have always been, and will always be, incredibly myopic when it comes to practical solutions to national problems. All they ever see is a flashing neon sign reading "Big Government" in front of them. It's the standard GOP meme: take care of the hyper-wealthy (then, for good measure, remove any taxes on the wealth they hand down to their kids) and all will be well.
How bloody much more will it take for the people to come to their senses?
1
"When the rich “sock it away,” that only means that they are spending or investing, which is to say, putting the money into the real economy just like everyone else."
This has been disproven again and again, Mr. Stephens. Most recently in Kansas with Gov. Brownback's experiment, but it's even more elemental. Giving individuals more money in their pocket via tax refunds is less efficient than pooling those resources and investing them in important national priorities. Even a wall would be a better idea. People would have to build it, patrol it, and open up doors in it to let people in and out. Jobs would be created. Money from those jobs would be spent at the Wal-Mart. (note: I'm not in favor of a wall. Just making a point)
What if everyone just kept all their money? How would that work? Society needs a fair and equitable tax policy. One that provides services and fosters economic growth. Trickle down stops trickling and forms stagnant, fetted pools. It's not so great to have an extra 10 bucks in your pocket if the stores in your town are shuttered and the roads are dangerous and full of pot holes.
The proposed Trump tax cuts are not tax reform but theft from salaried workers to the .01%.
Creating lower tax rates for business owners and investors is a terrible idea that will explode the deficit and expand inequality and certainly do nothing for the middle class while destroying the upper middle class. It is all pistachio.
1
Unfortunately, Stephens gets his economics backwards. Tax cuts for the rich will not lead to 3% growth. But they will explode the deficit. But who cares, say the modern conservatives, who have lost all claim to fiscal responsibility. The "budget" is a hoax. They aren't going to balance the cuts with ANYTHING.
Wait and see.
Sorry, your opening premise is erroneous.
I do not want a tax cut. In fact, I feel that tax demands are too lenient; a person with the wealth i have (and cohorts) ought to pay MORE.
3
Mr. Stevens buys into Reagan's Voodoo economics---yes, it is true that if the rich took their tax cuts and invested it in capital projects that would fuel the economy, but in reality, that is not how the very rich behave--they invest in private jets, another castle in Europe, a upgrade on their wife's ring, oh, and a boat, a very big boat ---meanwhile, those exploding deficits, actually do throw a country into bad economic territory. I suggest Mr. Stevens read The Rise and Fall of Nations by Ruchir Sharma, who does has excellent job is spelling out the fault lines of Voodoo economics.
Tax cuts are not the solution to our problems. Cost of living has gotten so out of hand for most people that a few extra bucks each month is not going to jump start anything. Tax cuts are just about the least creative thing the government can do to spur innovation and improve the quality of life. Sick of this conversation.
"Nobody thinks of Carter-era stagflation as a prosperous time for the United States, but the debt-to-G.D.P. ratio was low: just under 31 percent in 1980 as opposed to around twice that in the middle of the Clinton boom."
Note Bret's word games: he says the "middle" only because the final result under Clinton contradicts his argument. This is not an honorable way to argue.
He brings up Carter, but it was Reagan's planned explosion of the deficits which still haunt us. Sewer water under the bridge.
Now Bret wants more of the same poison, so his pals can buy another vacation home. He's not honorable arguing with word games.
2
The public debt ratio was 16% in 1929.
It was 109% in 1946.
It is 75% today.
Bret epitomizes right wing economics - the triumph of ideology over facts / ignore Kansas and other examples of the failure of tax cuts to spur economic growth and economic equality / the willful ignorance is just stunning!
1
On taxes - I'm no expert but two recent real-world examples argue for more taxes on the rich, not less. In Kansas taxes were cut deeply, resulting in no funds for little things like schools. The situation got so dire the legislators there finally rebelled and raised taxes. In contrast, in California Jerry Brown and the Democrats raised taxes on the wealthy, a move supported by a majority of Californians and, by the way, a majority of people in the US. The huge deficits run up by the prior Republican governors are gone and the State's economy seems to be doing just fine. Remember we are the 6th largest economy in the world, and our taxes cover benefits for most of the red states. You can make all the economic arguments you want, but the proof is in the real world experiences.
As to the debunked trickle down theory, it has been more aptly described as the "tinkle down" theory. Only the wealthy benefit.
1
A great observation by Bret that there might not be even the requisite "10 good people" needed to save Washington, D.C. from the fire and brimstone. But think of all the great new statues such an event would create. I can just see Trump and Bannon as pillars of salt. McConnell and Ryan have been immobilized even before the rain of fire, and only need to be encased in sulfur.
I would like to see a government carry out an honest conversation about taxes. One in which we take account of what we as a nation want, what we think are our values, and how those values are reflected in how we tax and spend our money. All the Conservatives give us are manipulative falsehoods.
2
Mike, taxes are a 2 edged sword. Basically they take money OUT of the private sector & that ain't good because we need money to conduct commerce, & as the economy grows, we need more & more money.
BUT taxes can have beneficial side effects. If the federal gov SPENDS the revenue & doesn't use it to pay down the debt, no money is lost, & in the circuit from the private sector to the federal gov by taxation & back to the private sector by spending, we get good stuff like better roads and bridges, better education, more research and a functioning gov.
ALSO if we tax the people who do not need the money & who spend a smaller percentage & use it to speculate, and get it to the people who need it & will spend it, then we increase the usefulness (economists would say "velocity") of the money, which IS equivalent to adding more to the private sector.
BUT if you run the numbers that will still not be enough money to compensate for the overhang from the cumulative effects of money flowing OUT of the private sector from 1996 to 2008. The federal gov NEEDS to spend more than it taxes out of the private sector. We need to borrow more from the public (especially foreigners) to lock in today's low interest rates &, even better, we need to sell bonds to the FED which returns the interest. All these bonds can be rolled over until they become insignificant as did the larger debt from WWII.
We need a larger federal deficit, but instead, the deficit has been CUT 75% since 2009.
I am still wondering how Trump will pay for the expanded US war effort by cutting taxes.
When I hear someone blather on about tax cuts for the wealthy and trickle down nonsense, I think one of two things is responsible:
1. Intellectual dishonesty, or
2. Intellectual incapacity.
At what point are taxes on the wealthy low enough Bret?
No need to answer, we know the answer- never.
Bret's conflation of consumption with "socking it away" shows a real misunderstanding of how the economy works. They are not the same.
Here's a very simple way of looking at it:
Consumption: I buy a bread or car or a second house. People work to make bread, car, house, get paid. Yay!
Investment: I buy machine tools to build a factory. People work to make tools, build factory, get paid, stuff gets made. Yay!
Socking it away: I buy a $100 million Picasso or some stock. One rich person gives money to another. Yay?
Socking it away provides zero benefit to the economy. It's money and wealth sitting on the sidelines. It won't produce more Picassos, nor will it produce more companies to own. It merely inflates their price.
Don't trust my very (over)simplified Eco 101?
Shock.
Ever since Reagan started the Republican crusade against oppressing the wealthy with taxes, inequality has gone up and productivity and GDP growth have decreased.
The national debt has skyrocketed, and the wealthy have gotten wealthier.
Education, healthcare, and housing are now unaffordable luxuries.
Epic wage stagnation.
But, hey, if voodoo economics has worked so well so far, why change?
2
"The national debt has skyrocketed"
As a percentage of GDP (which is what you have to use if you want to compare sums of money over time), our public debt was 47% larger in 1946 than today, and that was followed by 27 years of Great prosperity,
And in October of 1929, it was 16% of GDP. And what happened then?
2
Its good to hear that at least a few of us are thinking about what Trump is about to do to our tax system. Is there anyone else who believes that all the fuss about La David Johnson was merely a distraction from this issue. Perhaps it was intentional. Perhaps it was not "dumb as politics". When Americans discussed Trump's Health Care Proposal it was immediately rejected. This tempest has effectively derailed the discussion about Tax Reform. Trumps base does not find fault with Trump insulting a Gold Star mom so there is nothing for him to loose.
1
Happy United Nations Day, Ms. Collins and Mr. Stephens, and placing Trump and Taxes aside, America might unite to declare a date for 'The International Year of The Woman'.
1
I am not nearly adequately qualified to comment on tax policy though I have seen pretty cogent arguments on either side though I will note that more controlled government expenditure is definitely necessary. The largest gripe many taxpayers have is not the amount but the pseudo-socialist manner in which monies are spent. The welfare class is an ever growing and demanding subset which is certainly in need of reform. If we were able to allocate more resources to infrastructure which can support growth as opposed to fattening up society's parasites we would do good, real good.
This notion that "if the rich benefit disproportionately it is only because they pay a disproportionate share of taxes" is one of the more disingenuous -- and mathematically mistaken -- arguments in all of center-conservative tax doctrine. The idea of "proportion" when it comes to taxes doesn't refer to fractions of income; it refers to the conditions which enable healthy, happy, stable, and (ideally) rewarding existence in our society. Mr. Stevens is correct that economic anxiety fuels rage at a rigged system. But part of the rigging of that system has to do with the fact that people who cannot rub two nickles together see little return on the money that they're forced to hand over (taxed at a rate carefully calibrated to insure little safety net). Meanwhile, those individuals and families whose financial worries tend towards matters of investment rather than bare existence gripe about high tax rates while they shelter money in instruments unavailable to their less advantaged fellow citizens. No amount of mathematical equality makes this system "proportionate."
2
I did not ask for a tax cut. Tax cuts will only have to be paid by our grandchildren. It makes no sense to limit healthcare or beneficial government expenditures to give the rich a tax cut. If we want more well paying jobs, lets rebuild crumbling bridges, fix pot holes, and modernize sewer and water systems. Infrastructure is an investment in our country. And it isn't tax "reform" - change maybe, but not reform.
234
Trump never was concerned about what anyone wanted except himself. He wants to pay lower taxes as do all of the rich. Change can be reform but what Trump will offer will not benefit those who voted for him, but will they even realize that. Doubtful.
2
While I agree with most of what you say, Phyllis, the following
" Tax cuts will only have to be paid by our grandchildren."
is false.
To see what is wrong with your statement, let's look at history. As a percentage of GDP, the federal debt was at its maximum in 1946 when the public debt ratio was 47% larger than it is today. Did the generations that followed pay it off? On the contrary, during the next 27 years, a period known as the Great Prosperity, we increased the debt (in dollars) by 75%.
What happened to this huge debt? Where did it go?
First of all, normal inflation significantly reduced it. Even more importantly, we used the money sent to the private sector by the deficit spending to grow the economy so that the debt became insignificant.
If Brett wants to increase the growth rate, giving a tax cut to the top of the income distribution is the wrong way to do it. The economy is demand constrained so the money has to be given to those who will spend it, the low end of the income distribution. That money will be spent a couple of times (once by the low income initial spender and once by the entity on whom the initial spending lands) and provide real growth.
The position that more investment will make the economy grow is shown false by the cash on hand in various businesses who are waiting for demand for their products and services before they invest.
Oh, and the president isn't the hurdle to bipartisanship, its the leadership in the House and Senate.
1
Tax cuts in times of a deficit are nothing but a decision for the present wealthy generation to avoid paying for our government and passing the responsibility on to future generations. This is a decision to pay for government through further borrowing. Is that what the younger generations want to do?
Tax reform is another thing. But we need to start that with a discussion among the entire uS public about how we want taxes to be spread among the people. Who should be paying taxes?
Shouldn't taxes be apportioned according to wealth? Each person should pay taxes in proportion to how much wealth they hold. Government is protecting that wealth through our court system, our defense and homeland security systems, and our police and fire department systems. People with more wealth have more to lose.
1
"Tax cuts in times of a deficit are nothing but a decision for the present wealthy generation to avoid paying for our government and passing the responsibility on to future generations."
To see what is wrong with your statement, let's look at history. As a percentage of GDP, the federal debt was at its maximum in 1946 when the public debt ratio was 47% larger than it is today. Did the generations that followed pay it off? On the contrary, during the next 27 years, a period known as the Great Prosperity, we increased the debt (in dollars) by 75%.
What happened to this huge debt? Where did it go?
First of all, normal inflation significantly reduced it. Even more importantly, we used the money sent to the private sector by the deficit spending to grow the economy so that the debt became insignificant.
Let’s call a spade a spade. This isn’t tax cut; it’s tax shift because it needs to be revenue neutral. Tax shift means someone will pay more either in their sense of taxes or fewer programs, while others pays less.
It’s not hard to see who will pay more and who will pay less.
2
This isn't going to be revenue neutral -- there's no way that is possible. This is just another Republican huge-deficits-tax-cut-for-the-rich.
Ryan's fantasy was that the ACA, Medicare and Medicaid could be disemboweled, freeing up trillions to give to the rich. Didn't happen.
There's nowhere else now to get trillions to give to the rich, other than huge deficits.
The 1% have also benefited disproportionately.
Wonder what I'd be making if so much of the profits hadn't gone to them?
They don't need a tax cut on top of this, especially since there's a good chance people in the middle class will even have their taxes raised.
5
Sorry people, Trickle down economics does not work. Lets do "Trickle-up" economics. Give true tax reductions to the middle /lower classes but increase the rates on the upper class. This can make it revenue neutral and the wealthy still come out ahead. The tax cuts will actually be spent in the economy, boost profits of corporations who then return it to their shareholders and the wealthy win. We all win.
7
Although I find Brett less unreasonable than most conservatives he is still unable to concede that reducing taxes on the wealthy do little for the economy other than making the wealthy wealthier. There is nothing in the historical record that proves reducing taxes on the wealthy, particularly when taxes are as low as today, does anything for average Americans. Why this obsession with lowering taxes has taken such a hold of the conservative brain should be the subject of some psychological studies.
26
Unfortunately, more than half of psychology studies are unreliable. But which half? So psychology is no help. However, I am sure that if you can't find the answer in the Bible, you will find it in Shakespeare. It is no big secret, a human characteristic as old as time.
It is simple greed.
Open Science Collaboration. Science http://dx.doi.org/10.1126/science.aac4716 (2015).
Begley, C. G. & Ellis, L. M. Nature 483, 531–533 (2012)
J K Galbraith provided the answer a long time ago -“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.”
"They create jobs when they build a second home or become angel investors in a promising start-up or reinvest in their own businesses. Yes, it’s “trickle down” economics. No doubt most of our readers agree with me entirely!"
I for one and I am sure many others disagree with you and have come to distrust "trickle down"theory. I would prefer the certainty of increasing taxes on those who can afford it and having the government spend the money raised that way on infrastructure projects to promote growth in jobs and the economy. At least we can be certain of where the money will go and we don't have to deal with the vagaries of how the rich given a tax break will decide to spend their money - or not.
15
C'mon Bret look at an Economics 101 text. First of all trickle down economics hasn't worked in any instance since Reagan first tried it. Most recently see for example, Kansas. Second, and perhaps more importantly forget a 3% growth in GDP. Again Econ 101. Growth depends on two factors, and two factors only, productivity growth and work force growth. With the American work force shrinking (see current population trends and immigration policies) productivity would have to increase at a rate that exceeds any historical president.
38
That Econ 101 text might also mention that the time to cut taxes is when we are in the depths of a recession. Public spending in that context counters the economic forces that hurt people. Running a deficit is what you need.
As the economy recovers, you want to rein in spending and increase taxes to create a cushion against the next downturn. In our very unequal economy, it makes sense to do that to redistribute some of the benefits of the recovery.
What Bret is advocating goes against a lot of basic economics.
1
I am skeptical of the assumption that rich people will invest their tax cut bounty,
Just guessing but I think most of it will leave the US. Hoarding and investing offshore may be more likely. Offshore is perhaps the new frontier.
30
No, I think they will invest it in equities, which will fuel stock market growth and widen the disparity between Wall Street and the real economy.
15
I think the rich will do exactly what they have been doing - paying inflated prices for rare objects to use up some of their money and spending the rest on over prices junk ($33,000 backpack anyone?) When you get to be a billionaire, you can't actually spend that much money. It sits in a bank.
2
dcs: Only if those equities are on Grand Cayman, the Isle of Man or another tax haven. Tax dodging guarantees returns while blowing bubbles on the NYSE is fraught with danger.
With regards the Republican, and Bret Stephen's cut taxes/spur growth is that the jury is still out on whether that will happen. What Republicans should be focused is enhanced by the reconciliation process. By keep the tax code revenue neutral, they can actually make REFORMS that will (if their theories are correct) spur growth. If these reforms lead to greater growth, then guess what?: The government will also get more revenue!
Republicans don't seem to want to take this step. Tax cuts are the means and the end as far as they are concerned. If growth is the objective, there is plenty of opportunity to reform taxes in a revenue neutral way that will promote growth.
7
Bret, spare me the "rich pay most of the taxes" argument. Here are two reasons that reasoning doesn't work. First, the cost of basic goods and services doesn't increase with income, leaving the rich more money after paying their living expenses. When milk and housing costs a thousand times as much for someone earning five million dollars than for someone earning $50K, we can talk about flattening the tax burden. Second, productivity over the past decades has risen across the board, but the benefits of all that increased labor value has gone almost entirely to the top sliver of the population. This is the best argument for redistribution via progressive tax policy, so all the people who work harder and produce more benefit from their contribution to society.
Stop making tax policy that benefits the people who write tax policy and their sponsors, and start trying to bring equality of reward somewhere in the neighborhood of equality of contribution.
75
"When the rich “sock it away,” that only means that they are spending or investing, which is to say, putting the money into the real economy just like everyone else."
Their vacation in Paris, European designer hashtags (e.g Mnuchin's wife) extra homes in places like Bermuda, leveraged buyouts and driving up real estate prices in America do not help the middle class; people who spend their few dollars at the corner store, sending them circulating through the local community, do.
208
And (temporarily) stealing government airplanes for their private use. They can't afford to pay to rent an airplane, the poor guys.
3
Actually they use the money for financial speculation. Look at the periods of high inequality when the Rich have money coming out of the wazoo, e.g. 1920's. 2000.s, etc. These were also the periods of extreme speculation which led to disaster.
40
Also, their investments tend to be global. Hedge funds and wealth management companies pay little heed to national borders in their search for the optimal return.
1
Perhaps mine is a minority opinion, Bret Stephens, but I believe that American taxes are too low, not too high. To me, the evidence indicates that the economy grows best, and is more equitable, when we have progressive taxes (so make them HIGHER on our wealthiest citizens), wise government investment, and more money in the hands of those who have to spend it (so higher tax credits or other form of wealth transfer for our neediest citizens).
My income is about $100K annually, and our country would be better off if all in my tax bracket were paying about $2K more in taxes, not paying less.
This is what was happening under Clinton, and it worked. We were even paying down the deficit.
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I was going to make that point. You beat me to it. Why is it that the need and rationale for taxes in the first place is never up for discussion. Taxes are what fuel our country's progress.
6
in other words "our government does not take enough of our money. I think the government should use their monopoly on force and steal more of people's labor." Hey, how about you just give them more money but don't argue that I need to as well.
Brett says: “Robust economic growth would solve a lot of problems and take much of the air out of Trumpism.”
I’d agree with that. But robust growth isn’t coming from the profit-before-all-else bottom-line business sector.
That sector is directing all profits from automation and out-sourcing to an elite few, ignoring the decline in well-paying meaningful human jobs. More and more, such jobs are in understaffed and undervalued “big problem” areas like: environmental protection, infrastructure development, opioid issues, affordable housing, health care, real education (not temp job retraining)... and on, and on.
These jobs fall mainly to government because they help everybody, not just the competitive advantage of some me-me-me winner-take-all corporate player. These jobs require more taxes and more government - neither a Brett favorite.
43
Bret how many homes or cars or paintings can the rich buy? You assume that money in the hands of the rich generates more economic activity than money in the hands or the non rich. That is simply not true. It's such a false premise that it's nearly a lie. I am sick and tired of GOP lies. And for investment, are the rich starting new businsse? No. They give their money to hedge fund managers who promise extravagant returns which are paid for by reducing wages to workers or offshoring manufacturing or simply selling off the best assets leaving business corpses behind along with the unemployed.
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Exactly. If more money in the hands of the 1% meant higher economic growth, our economy would be on rocket fuel right now- unequal distribution of wealth is at an all time high.
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NB: Since there is a limited supply of paintings and an almost unlimited supply of rich-people's money to pay for them, prices should be going through the roof. And guess what! (They are.)
1
Where did these conservatives learn that all tax cuts is good for the economy? Where is the scientific proof? I could easily argue the totally opposite - that it will make the economy decrease over time. And why do they never have a holistic approach to economy (how every economic decision effects society as a whole and for example makes populist movements more and more stronger when the low-income segment of the population gets poorer and poorer due to conservative economic decisions.)
31
To improve the economy, we must increase the ability of the 99% to acquire more. To do this we must reduce their essential costs of living, like healthcare and education. This is achievable by subsidy to be paid for by increased taxes on the wealthy. Increase taxes on the wealthy to fund healthcare and education for the middle classes, yielding lots of available money for spending and increasing demand!
38
The Democratic response needs to be: take every penny of added deficits that Republicans have agreed is acceptable in the name of top-end and corporate tax cuts, and move it into infrastructure projects.
25
We can count on Big Business and Big State lobbyists to prevent curtailment of tax subsidies and deductions. The likely result is that the tax rate cuts will be smaller and, once again, the 1% will be garner almost all of the benefits.
14
Vintage columnists produce high spirits when they create a fine whine.
Still, there's no way to spin Republican tax reform into something good. When this president says he wants to help the little guy, little guys everywhere should run for cover. When a Congress loaded with millionaires wants to tweak the tax code, we're all going to feel the pinch. Protons will decay before this august body will reward the non-millionaires among us.
A president who was snotty and dismissive to people who were sick, starving and dehydrating in Puerto Rico might be fairly accused of being insensitive to the plight of ordinary folks. He was reduced to praising himself when they didn't recognize his beneficence. You can be assured that he'll remember that.
We should remember that Republicans didn't even wait for the CBO to provide numbers to see who their bogus healthcare bill would hurt before they demanded a vote on it. Their endless rants on the evils of deficits during Democratic administrations has suddenly become a non-issue.
So now they're thinking about printing money, stuffing it into offshore accounts and letting us pay for it during the subsequent Democratic administration.
After all, they're not stupid. They're merely malevolent.
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Well … no. Ryan screams, Trump screams, Bret screams, I scream for tax cuts. But, clearly we don’t ALL scream for them.
Just those of us who want our economy to grow robustly, creating plentiful middle-class jobs and driving wages higher with the competition for labor born of a growing economy that the Fed doesn’t kill too soon. Not that liberals, who want what’s best for America as much as sensible people do, don’t: it’s just that liberals haven’t the foggiest idea of how to create such happy outcomes. Never did: liberals are useful when we’re rolling in it and trying to figure out what to do with all the money. They REALLY stink at helping out with getting there.
If there’s a tax cut and the economy grows by 3% or more, then why WOULDN’T Trump take credit? Clearly, it wouldn’t be Nancy Pelosi, Chuck Schumer, Bernie or Elizabeth Warren who brought on that Democratic apocalypse; and you can’t get there solely on what HRC spends on shoes.
But you can bet your sackcloth and ashes bippie that Janet Yellin won’t be reappointed to her Fed chair. In anticipation of a roaring economy, Trump will want someone in that chair who won’t pour used motor oil on the party too soon. He might even consider Krugman, so long as he (Trump) can promise that the additional taxes gleaned on growth OVER 3% be dedicated to free cheese and Band-Aids.
And Bill Bradley got interested in tax reform when Reagan suggested that a person should be taxed not on what he earned but on how tall he was.
But Bret needs to get with it: journalists and other Americans aren’t “walking Bordeaux”, but walking Cabernets.
As to Kelly, he should have known that defending Trump would have destroyed his credibility in the echo-chamber. Decades of Marine service to his country and he goes and blows it by ticking off those who, like Tom Steyer, are angling entertainingly to get a solidly Republican House to impeach a Republican president who wants to roll back excessive regulation and cut too-high taxes.
As to Bill O’Reilly, and knowing when to leave well enough alone, we’ll know that he can’t if the NEXT settlement is for $40 million. Anyone willing to bet?
Happy United Nations Day to Gail, too. If there’s anything that personifies the new GOP and no longer the Democrats who have aligned so cohesively to worship Saint Bernie, it’s the occupants of that Tower of Babel on the East River.
2
That all sounds great, pulling out your best Laffer Curve inspired wishful thinking. Yet somehow that flies in the face of recent history, where it has been tax increases along with a fiscally responsible federal government that resulted in growth, not tax cuts. Reagan's tax reform (not just cuts) did not fuel growth. Neither did W's. Responsible fiscal management, spending on infrastructure, balancing the budget those are the actions to robust growth.
This administration is worthy of a lot of labels, I am not sure any of them would contain the adjective "responsible".
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And if there is a tax cut and the economy doesn't grow by 3% or more what will you say?
Will you rant about the size of the deficit? The size and growth rate of the national debt?
Will Republicans finally have a platform that isn't all around tax cuts?
And being a Republican isn't the same as being conservative. Would a fiscal conservative give away money that they don't have? Would a fiscal conservative choose to increase deficit and debt?
9
I really don't get the fascination that Brett,and others who reflexively are drawn to tax cutting, have with this notion that the thing that is holding back growth is too little money available for investment. Clearly in the low interest rate climate that we've had for approaching a decade there are MOUNTAINS of deployable cash available to invest at low interest rates, including nearly unprecedented levels of corporate cash reserves. There is NO SHORTAGE OF MONEY for investment, flushing that whole aspect of his argument down the drain. It yet is, as it has been for some time, a lagging demand/slow growth circumstance world-wide. Priming demand means getting more disposable income into the hands of consumers of our consumer-driven societies. If corporations really wanted to prime pumps, they'd start giving sensible pay increases to their employees instead of trying to stack their hoards incrementally higher. Even Henry Ford understood that if his business was mass production, then to sustain it there had to be mass consumption, which means a sizable workforce that could afford to buy his stuff. So he paid relatively well! So enough of the canard that the business sector is pressed to find investment funds. In general it is NOT TRUE.
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I get charged 14% on my credit card debt, not really because I am fortunate enough that I pay it off every month but most people can't. I earn .05% interest if I am lucky on my savings or CD's as the stock market bubble scares me.
The stock market is bursting but the economy is lagging, wages our lagging, our infrastructure is decling but Brett thinks the investors will create jobs.
Brett we've been feed that hooey for 40 years, hasn't happened in fact it was invested for more profits for the 1% off the back s of the rest of it.
2
As Galbraith pointed out, these are all just attempts at superior moral justification for selfishness. Nothing more.
It is ignorant to say that tax cuts (along with pay increases) would not work to prime the economy. The working people need MONEY! To say there is no shortage of money for investment? Um, maybe on Wall St., but not on MY street.
Bret--first of all, some of us really like pistachio ice cream and would not mind having more of it.
You suggest that businesses would use tax cut savings to hire more people. To do what? If a business has a good idea for expansion it can get financing and hire additional people to implement the idea and increase its profits. If a business has no plans for expansion it would be irresponsible to hire additional people---and highly unlikely. After a business tax cut, owners of a business without an expansion plan would wisely allow tax dollars saved to trickle down into the owners' pockets. That is what "trickle down" economics really means.
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Anne, you repeat the obvious question that disposes the whole nuttiness of trickle-down economics. They simply refuse to answer it.
Let's ask a bigger and what-should-be even more obvious question: "Why do we give FOREIGN investments the capital gains tax rate discount?"
The justification (such as it is) for the capital-gains tax rate is that it encourages the wealthy to invest, lowering interest rates and spurring economic growth. So why are we encouraging the American wealthy to invest in other nations, to compete with us?
14
The hire more people line is such a joke. An article in the Times several weeks ago told how businesses can't find workers who aren't on drugs and work is going to China. It seems everyone is hiring. There are signs at many businesses I see looking for workers.
Warehouse work is booming according to the article yesterday. Of, course it also stated companies are using their funds to explore completely robot warehouses. Which might give us an idea of what they really want to do with all that extra money.
4
An extra bonus for large companies like Amazon: Warehouse work pays s---.
1
The only way to create a fair tax plan for all is the New Zealand model. BBLR (broad base lower rate) is a plan that taxes ALL income. There are no loop holes, exemptions, no breaks for anyone. The end result is a lower tax rate for all. Why do we keep kidding ourselves? I've heard arguments for and against previous tax plans since Regan and none made any sense. Paul Ryan briefly mentioned a broader base type of rate in one of the morning talk shows recently. I wonder how serious he is about getting it passed.
6
Rick, the key point of the New Zealand tax system is that the word "capital gains tax" means something entirely different than in the USA.
There is no capital gains tax for ordinary investments -- meaning that investment return is taxed as ordinary income ... EXCEPT for certain kinds of foreign investments that get an EXTRA tax.
New Zealanders are not rewarded for foreign investments ... a rather obvious idea, right?
8
I don't mind if investors are rewarded for making good investments. Their investment income would just have to be at the same tax rate as all other income. If this is not reflected in the BBLR of the NZ model the US version would have to reflect that. Keeping things simple keeps things honest.
1
Is Stephens trying to audition for a role on SNL? How can he postulate that cutting taxes on the rich and reducing corporate taxes will produce economic growth when the Reagan and Bush demonstrate exactly the opposite?
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Why is there no attention to the demographic change that has occurred in America. Every year more people leave the labor force. I've seen repeated complaints from employers about not being able to find qualified workers. I've read numerous stories of employers saying they would expand but for lack of workers. There are some 6.2+ millions jobs looking for workers. We are technically at full employment. Corporations and business are sitting sitting on piles of cash. How is that giving "job creators' more money going to create more jobs.
Perhaps tax breaks accompanied by immediate expensing could lead to massive investments in robotics, further degrading the American labor force which would undermine the markets for any goods that might be produced.
The only thing that will result for the GOP tax reform framework will be increased deficits and additional disparity in income and wealth across the country.
33
The reason that so many employers can't find qualified workers is that they refuse to pay a decent living wage.
I'm not saying that all employers are like that, but many are.
11
jmay -- resist reading the "there are no workers" as anything but the balderdash it is -- what they are whining about is that "there aren't really highly-skilled engineers who we can hire on short notice and fire tomorrow, who will work for peanuts."
This is particularly true of the lower-end of the banking, accounting, and financial services industries, that depend on hordes of low-paid low-level "computer techs" and glorified script-kiddies who can push SQL etc. There are huge numbers of Americans who do have the needed skills, and a huger number who could get them with a year of training. But these businesses soak up the bulk of H1-B visas, importing people who will work real cheap and can be disposed of easily.
The minimum H1-B salary ought to be raised to 150 k$/year ... that's a wage that a real expert in anything expects to be paid, particularly if working overseas, on a job that is likely short term.
There are large numbers of Americans who would invest in upgrading their skills if there were any reasonable prospect that they might recoup the investment.
9
I have to chuckle at Bret's comment "So here is where we get to the root of our differences on taxes. When the rich “sock it away,” that only means that they are spending or investing, which is to say, putting the money into the real economy just like everyone else. They create jobs when they build a second home" is fake news in the face of actual data. If one looks at the actual consumption data across the income scale, a person making 10 times the income as someone else does not spend 10 times as much consuming goods and services. At most, a person with income in the top 10 percent consumes about 4 times as much. It is and always has been a non linear relationship. Yes, they do invest, but where? Again, the data shows it is not in startups or job creation, it is in the stock market which may or may not create jobs. If it did create jobs, we would have seen it sometime in the last 40 years since the great tax cut experiment started.
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well said -- and you should add that since the stock market has literally gone into orbit over the past couple of years, where is the corresponding growth in the real economy that should have accompanied it?
As Paul Krugman keeps pointing out, the GOP (and conservatives more generally) keep repeating this supply-side claptrap in the face of no evidence whatsoever. It's a textbook case of ideological blinkers.
8
Unfortunately, as we have seen, they not only invest in the stock market, but in CDO's, credit default swaps, oil futures, etc. etc., etc.
4
The only way the Trickle Down theory works is when you drink beer, and even then most profits go to the top and the consumers part of this equation goes down the drain.
1
Let us not forget that the top 1% of taxpayers pay 35% of all income taxes and the top 20% pay 80%. You can't cut income taxes much for the bottom 50% since most of these folks don't pay any (and in aggregate pay only 3% of all income taxes.)
A revenue neutral approach that cut tax rates but eliminated ALL deductions and credits would benefit all but the richest taxpayers and would be more economically efficient. Based on the comments below, individuals are more interested in saving their favored deductions so I doubt this will happen.
5
Those of us in NYS who are not in the top 20% might face going under if property taxes were no longer deductible. It's been structured that way since we bought, and it would cause havoc. Yes the richest get the biggest chunk, but this is something that would destabilize a lot of those in the middle -
and here, out school systems. And of course anyone eligible for credits - will holler ( and Ivanka is pushing for larger credits for child care). A rational discussion - to rationalize income taxes - is not going to happen in this Congress or with this President. Or maybe never because we won;t get beyond the screaming and lobbyists' agendas.
The barebones outline of proposed tax cuts floated would leave most middle income people - at least in higher income/expense areas - who cannot disguise income - losing "bigly."
10
The top 1% average incomes in the multiple of millions in income. An extra $10,000 to them is a valet tip compared to a family with income of $50,000 or even $150,000. The progressive tax system is based on the ability to pay. And what hurts vs. what doesn't.
18
Yes, but the top 1% of taxpayers make more than 35% of all income. Don't they!
5
Quite frankly it is tiring to read and hear the same old myths about tax cuts.
The effective corporate tax rate is under 30%, and some multinational corporations have paid zero in taxes.
Tax cuts will pay for themselves with a sudden economic miracle.
Corporations will raise workers' wages.
Tax cuts for the wealthy trickle down and raise the tide for all boats.
The middle class will see a $4000/family in annual income.
Why not identify the myths as lies, which is what they are.
146
One of the many myths propagated by conservatives is that our corporate taxes are high compared to other countries. It is true that our nominal rate of 35% is high, but because of loopholes, this figure is meaningless.
A good parameter to look at is total corporate taxes actually paid divided by GDP because neither of these figures can be fudged by corporations. If you look at developed countries, you will see that Norway has the highest value at 12.5%. The US is tied with Turkey for the lowest at 1.8%. If you look at all the countries touted by conservatives as low tax countries such as Ireland or Canada, you will see that their corporate taxes as a percentage of GDP are higher. http://economix.blogs.nytimes.com/2011/05/31/are-taxes-in-the-u-s-high-o...
In addition, during the Great Prosperity, 1946 - 1973, this figure was about 3 times higher than today
It seems to me that if our real corporate taxes were in line with the rest of the world or maybe even higher than the average, corporations would think twice about leaving piles of cash lying around and would reinvest them to avoid paying tax.
7
How about Obama and his "every family will see $2500 in savings this and every year after"?
Two can play this game.
Cc
Really you are equating life saving health care with making a rich narcissist richer? That is pretty twisted and beyond cruel.
2
The reason that it is not a bipartisan effort as under Reagan is because people do not believe in the concept of Trickle Down. We do believe that “voodoo” economics was the correct term. The concept of reducing the amount allowed to put into 401K’s while keeping the lower rates for a small number of investors is proof that this plan will not help the vast majority of Americans.
Most of us also believe that if we made investments in our national infrastructure that the benefits to most Americans would be more than a tax cut.
53
"Republicans have spent the past 60 or so years trying to dissociate themselves from their nativist, isolationist, ethnonationalist wing only to fall right back into it."
Good line, Bret--much better than your claim that the rich pay more in taxes so why shouldn't the biggest benefits go to them?
Do you have an hour? A week? Let me count the ways:1) the rich end up paying far less than the code implies. The only way to know for sure is to look at tax returns (hey, Donald, that means you!). There are all sorts of ways, gimmicks, loopholes, and the help of a good, high-priced accountant to protect the wealthy and they're built in to this piece of legislation (turning income into lower rate pass-throughs). In contrast, "payroll" tax payers can't restructure their income
And all this talk about improving the economy--isn't it already roaring today chugging along between 2 and 3%? It's a fallacy to assume tax reorganization is going to unleash opportunity 3-4% beyond what we have now. Just look at past cuts.
You can't improve the economic affairs of a family earning $65K by trimming their deductions. You can't take away high price-state and local tax deductions, or the medical expenses deduction for seniors facing Medicare cuts and high priced chemo drugs.
I predict the middle will pay MORE in taxes, which many experts confirm.
Why do Republicans always insist on robbing the middle to pay the top?
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According to an online tax calculator, a married couple with two children would pay $3,698 in federal taxes using the 2017 standard deduction. (A 5.7% effective tax rate.) Itemized deductions would have to exceed $12,700 before it would be advantageous to itemize.
The same thing is true of your theoretical Medicare patient. A tax deduction for medical expenses doesn't help if you don't have enough income to be taxed.
7
A real theoretical. Those who have more than two children lose. Those who live in high-tax states lose. The single greatest investment for the middle class is their home -- in high tax states, they lose.
Who wins? the top 1%, those with large estates to leave their children, those who do not work for living, but invest instead.
We are at full employment. Nothing we do will bring back the good paying factory jobs; they are disappearing everywhere as automation makes huge inroads (anyone gone to Home Depot or a grocery store these days and see the empty cash registers now automated?). Companies are awash in money to invest, so are the rich.
And, the GOP is pushing more and more of the burden of helping those who do not fall into the top 10% onto states, while punishing those states who tax more to pay for the services they already provide.
You simply cannot do more with less. (It's math.)
7
Republicans have spent decades whining about the marriage penalty, and now they want to effectively ban large families by doing away with child and child care deductions AND the mortgage interest deduction.
You have to wonder how UTAH feels about that, given they have the largest families and nearly the highest home ownership rates in the US.
Wonder if they'll keep on voting for Republicans after the penalties hit?
3
It does not sound as if Bret has ever run a small business or a Corporate. No company hires just because they got a tax break. No company gives everyone a living wage because they got a tax break.
A stronger argument is needed to persuade people that a tax break for businesses and the wealthy helps the everyday worker. It is called observation and experience with the Reagan tax breaks. And can we really afford a bigger deficit? Talk about taking care of future generations. A nice gift to our grandchildren, a bigger deficit and tax cuts for the wealthy.
64
Yes, I keep silently asking "what's the business case?" whenever some politician or a talking head claims that a tax cut to the highest income bracket or to corporations will create more jobs. Any sane business man will only hire as many people and pay as much salaries as is necessary to meet the demand for his product. The 0.1% will not consume more than marginally of what they save on their reduced taxes and they will only see investment prospects in businesses with an increasing demand. Demand coming from where?
7
Corporate balance sheets are awash in cash, the stock market is at an all time high, borrowing rates are rock bottom, a tiny fraction of people hold the majority of wealth and have subsumed the past 30 year's productivity gains. In the mean time, there has been zero wage growth and increased job instability for the great majority of workers over this period.
Tax REFORM, and not merely a deficit hemorrhaging giveaway to corporations and the 0.01%, should entail:
- raising the top marginal rate
- expanding tax credits for vocational training, retraining and colleges
- tax capital gains at the same rate as the upper marginal income bracket
- lower the corporate rate but only in conjunction with removing the reams of loopholes allowing well positioned corporations to gut their effective rates
- eliminate hedge fund carried interest loophole.
- institute a meaningful carbon tax
This should be done in a way to create additional revenue to pay for
- rebuilding our crumbling infrastructure including power transmission grid and thereby creating a lot of meaningful construction and blue collar jobs
- building out renewable energy resources
The way to put money in working in middle class pockets is to put people to work and to pay them a living wage. The trends toward automation and globalization will not be fixed by a tax cut. Companies will use the $ to buy back shares, increase executive compensation and pay more dividends and invest in more automation to reduce labor costs.
183
Good points - have you considered running for President?
This.
1
If you want to grow the economy then you must increase the purchasing power of the 98%. That doesn’t mean tax breaks, it means jobs and programs like universal health, education, job training, day care and preschool. With two salaried incomes my husband and I spent $25,000 per year on daycare/camp/aftercare/college savings etc... for more than 20 years.
These expenses were really taxes in a way as they limited our ability to spend on everything else.
Tax breaks for the wealthy won’t drive demand, but lower costs for services we all need an use would.
341
Dierdre--I love your argument (and despise voodoo economics), but there's a logical flaw. You spent on "daycare/camp/aftercare/college savings"--thereby employing an entire generation of daycare/camp/aftercare/college professional service providers.
Sure, that money would have been available to spend on "everything else"--but what would that be? Goods increasingly manufactured in China? Houses in an already-inflated housing bubble? Great vacations (thereby shifting the beneficiaries from one group of service providers to another)?
The fact that you had to spend that $500,000 in the free market means you have been materially contributing to whatever growth we've experienced over the past 20 years.
Taking some fraction and plowing it back into the government for "services" might be a good thing to do for a number of reasons--but it doesn't improve your contribution to the economy.
6
TJ -- yours is the fallacy. You are defining the "economy" as the production of tangible goods, and only tangible goods.
Explain to me how somebody who buys more schlock to embellish their McMansion actually creates anything of worth, as opposed to somebody who lives more modestly?
Ever heard of Thorstein Verblen? Conspicuous consumption? Ever considered the question of what "value" actually accrues to a unit of valuta (money)? Answers to this latter question are very difficult, but at least ASKING the question is critical.
1
I agree with the beginning statement, on increasing the purchasing power of the 98%. However, the last sentence implies cutting wages for educators, day care workers, camp counselors, etc. These are the people entrusted with our dearest asset, and the asset most likely to appreciate!
Meanwhile, Wall Street and Wall Street wannabes continue to strut their stuff, spending on lavish consumer items and costly clothing, pushing the 'affordable' category ever further for housing, food, clothing, etc.
Another question, however. Must consumer consumption always be the primary fuel for a nation's growth? Hasn't anyone else realized we are being buried as a species because of this pressure to consume?
3
The idea that a corporate tax cut would increase the GDP growth rate is hogwash. Corporations are already afloat in excess capital and buying back their own stock to firm it up in anticipation of weak sales rather than investing in production.
If we want to get serious about growing our economy we need to focus on the ability of workers to purchase the fruits of their labor. Taken on a national scale, this Affordability Index is equal to total wages as a percentage of GDP. Since 1972 our affordability index has fallen from 50% to 43% which corresponds to a shortfall of $2,000 a month for a working family. This shortfall in affordability and demand is at the heart of our economic malaise and turn to political radicalism.
We know where this purchasing power has gone as corporate profits have in creased from 5% to 10% of GDP over the same period. Notice that corporations not only did not share these increased profits with workers but took them out of their hide. Any valid solution to our affordability crisis will require the federal government to use regulations or increased corporate taxes or regulation to bring our economy and politics back into balance.
417
Would you like to be Governor of Florida? I'll carry a sign for you.
1
The Republican argument for tax cuts seems to be: We’ve proven to be incapable of passing any significant legislation so far, so we have to do tax cuts to prove we can do something. That seems like a funny way to manage the macroeconomic affairs of the world’s largest economy. What economic arguments you do see (3% growth, etc) seem to be provided by fringe economists at places like Hoover, Heritage, etc. There is no first tier academic economist who backs up Republican claims for these cuts.
248
The real argument for tax cuts is they promised their wealthy benefactors, who have profited so immensely from this system they rail against, that they would. They promised healthcare reform which they botched, so tax cuts have to go through to keep the spoiled wealthy happy.
7
Republican use the same rationale for every piece of legislation that pops up these days. They did the same with their various Health Care bill iterations, many in Congress stating that whatever their current version wasn't a great bill, but they had to pass it to make good on campaign promises and to prove they could actually legislate. And they did it unabashedly in front of the cameras! What? Who hearing that could actually vote for these people again?
5
It's faith-based economics, faith that can move mountains--of evidence.
1