Today is Labor Day. It is a very special day for pro-union progressives like me. I am retired (except for my writing which to date I have never accepted monetary compensation for) and know what it is like to work for a paycheck. What that paycheck represented to me was disposable income with which I financed my lifestyle. Two factors: earnings and taxes determined what my net pay was. One of President Trump’s big agenda items is what he calls tax reform. Let’s explore what that really means to Joe Lunchbucket.
Last week, between Hurricane Harvey exploiting photo-ops, Trump traveled to Missouri to tout his “tax reform package” to an adoring crowd. To date the “tax reform plan” consists of one page with a handful of bullet points. Considering the size and scope of the American economy that is hardly a plan. It is more like a back of the cocktail napkin sketch. Of course, that is how Dr. Laffer sold supply side economics to Dick Cheney and Donald Rumsfeld. They in turn sold it to Ronald Reagan. In their defense we know there was drinking involved in at least the first incident.
My use of quotation marks is not an accident. This is a tax cut for the wealthy masquerading as tax reform. It is long on rhetoric and almost devoid of detail. This is the part of Republican orthodoxy that Trump has long subscribed to because he would personally profit from a tax cut targeted almost exclusively at the small portion of Americans who already have more money than they need.
Like all the Ryan Plans that came before it, (here forward I will call it what it really is), the details are often missing making it impossible for the numbers to add up. It is also based on unrealistic assumptions. The GOP loves to talk of the states as 50 laboratories for economic experiment. Ask Kansans how well Republican Governor Sam Brownback’s recent trickle down plan worked. Spoiler alert: No very well!
My question is whether the tax cut is Trump’s second attempt, (the failed Obamacare repeal being the first), or an intended double dip. I certainly see no evidence that Trump is wise enough to have had a backup plan. From Trump’s perspective the Obamacare repeal had nothing to do with health care and everything to do with a tax cut for him and his financiers. His rhetoric plays to the masses in his base and his financial policies play to his deep pocketed donors.
True tax reform is something that the vast majority of Americans support. Talk about the devil being in the details! Everyone talks about the need to get rid of loopholes; the problem is that they are talking about the other guy’s loopholes. Joe Lunchbucket (if he was being realistic) would be happy with getting rid of a lower tax rate on capital gains; he generally doesn’t have any and if he does they are not a major portion of his historic income. What he does want to keep and major GOP donor often wants to get rid of is the home mortgage interest deduction. I could go on listing “conflicts of interest”, but you get the idea already. To make it even more complex there is an army of lobbyists that will fight to the death to defend their loophole – that’s what they get paid (very handsomely) for. The influence of money in politics is very real; and very big.
True tax reform would be a herculean lift and isn’t something that is going to be accomplished by an amateur like Trump or a divided Party like today’s GOP. It would also require leadership abilities well beyond those of Trump or Paul Ryan.
Ivanka Trump, the self-proclaimed champion of the American working woman, showed her true economic colors this week also. The Trump administration announced that it was ending an Obama era policy on gender gap wage data collection. Who needs facts when you can live in the ignorance of the Donald Dome? American women do not enjoy the pay equity they deserve and with champions like Ivanka Trump won’t during this administration.
With 70% of American economic demand being consumer demand you would think these self-professed economic geniuses would finally figure out that putting more money in the hands of those who will spend it quickly is good business. Greed and ignorance will blind common sense I guess.
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