The Trump/GOP Tax Bill: Nothing But Coal In the Stockings of Working People

     Like a stocking full of coal (particularly apt this holiday season), the Trump/Ryan/GOP tax  boondoggle has arrived. 

     As we might have expected, our so-called “leaders” have staked their bill on corporate tax cuts (from 35 to 20 percent).  The majority of Americans oppose these cuts (Pew Research Center), but what does the will of the people have to do with reality?  Trump, Mnuchin, and Cohn have been relentlessly parroting the tired line that the U.S. corporate tax rate is too high.  On the surface, they appear to have a point.  The U.S. rate stands at 39% versus 30% in Germany and 24% in the UK.  Yet our “effective” corporate tax rate (once you factor in the bundle of goodies they’re able to deduct:  cost recovery allowances, interest deductability, and expensing research & development) is actually around 18.6% which puts us in line with the UK rate of 18.7 %, and much closer to Germany’s rate of 15.5%. 

     It’s likely that slashing our corporate tax rate will instigate a race to lower corporate taxes across the globe.  That will only benefit the rich.  The rest of us will pay a price the country can’t afford.  Trump supposedly wanted to call this the “Cut, Cut, Cut Bill”.  Apart from his desperate need to simplify everything (how else could he hope to understand the issues?), he’s accidentally right--but not in the way he intended.  In order to pay for the massive additions--an estimated $2 trillion dollars over 10 years--to the deficit that will be caused by this corporate giveaway, the government will cut funds for education, cut funds for health care (Medicaid), and cut funds to safeguard the environment.  Cut, cut, cut... but not for Trump, Robert Mercer, the Koch Brothers, Sheldon Adelson, and the other bloated GOP cash cows.

     A few other tidbits to demonstrate their largesse:  Although they’ve made a show out of keeping the highest tax rate (39.6%) in place, they’ve more than doubled the threshold at which that top rate kicks in--from $400,000 to $1 million (for married couples).  Nice sleight of hand.  They’ve also made wealthy families eligible for expanded child credit!

     If one wants to study the results of Republican tax policy in action, the disastrous Kansas tax experiment stands as a terrifying testament.

     Trump and company would undoubtedly love to say “let them eat cake” (and probably do behind closed doors).  My hope is that resistance to their insatiable greed will continue to grow and 2018 will see their power begin to crumble. 

Bill Clinton's Common Sense

     I'll admit it right up front:  after the Monica Lewinsky affair, "common sense" was not an attribute I thought I'd ever assign to Bill Clinton.  But here we are in 2011, and the Tea Partiers are clearly determined to bring about the downfall of our nation, while the Republicans are falling all over themselves carrying out Tea Party edicts.  In other words, these folks are incapable of offering constructive ideas in the face of our economic stagnation--just more of the same:  when in doubt, surrender more of the nation's wealth to those who are already sitting pretty.
     On the other hand, in a recent Newsweek article Mr. Clinton offered up numerous common sense ideas for job creation.
     To begin with, he argued that in lieu of tax credits for start up companies, Congress should once again allow these credits to be converted into cash equivalents for every employee hired.  This had been a part of President Obama's energy policy, but last December the Republicans in Congress refused to extend this benefit--in effect saying "this is a spending program, not a tax cut... we only approve tax cuts."
     The former President maintained that the way we produce and use energy today could result in the same massive job growth that information technology provided during his administration.  He estimates, for example, that retrofitting buildings all across America would create over a million new jobs.  Citing the Empire State building project--which saw hundreds of jobs created, greenhouse gas emissions cut substantuially as overall electricity usage decreased by close to 40%, Mr. Clinton then argued that since 7000 jobs are created for every billion dollars in retrofitting, the construction industry would be kept busy for years--with effects from a million new jobs rippling all through the economy.  Schools, colleges, hospitals, state, county, and local government buildings throughout the country from coast to coast are ripe for retrofitting.
     While infrastructure initiatives would result in massive job creation, there aren't the votes in Congress to pass another stimulus package.  Clinton believes we need to unlock that money and take steps to get U.S. corporations to invest some of the $2 trillion they've accumulated. (Clinton points out that TARP and the stimulus saved us from a second Great Depression.  It worked, but didn't entirely "fix" the economy since an $800 billion stimulus simply couldn't fix a $3 trillion hole.) Mr. Clinton maintains that cutting government spending with the economy currently receiving so little private investment is incredibly risky, and will further increase the deficit as tax revenues fall.
     With regard to corporate taxes, Mr. Clinton acknowledges ours are the second highest in the world.  He advocates lowering the rates while simplifying the tax code and broadening the actual tax base.  This way, all
corporations will pay a reasonable amount of tax on their profits.  In other words, lower the rates to be competitive, but eliminate the loopholes that cause widespread discrepancies.
     Clinton is certainly ready to support individual state initiatives if that's where good ideas are originating.  While noting there are 3 million posted job vacancies (and filling them faster would make a huge difference to the economy) he cites a Georgia program where after vacancies go unfilled for a certain period of time, the state offers businesses money to train potential employees.  During the training, companies aren't yet employers, so they don't have to start paying Social Security taxes, or benefits.  Potential employees are trained the way the company desires, then they hire those who successfully complete that training.  Lag time is reduced, and a job vacancy is filled.
     In addressing the issue of rules and regulations that can often delay shovel-ready projects by up to 3 years, Mr. Clinton states that the federal government should be able to issue waivers(where there are no environmental concerns) to the states to speed up the starting time for construction projects, for example.
     There you have it, a number of solid, thoughtful ideas.  Pretty refreshing, wouldn't you say?  Alas, I doubt they'll ever be given the very serious consideration they deserve while the "nattering nabobs of negativity" (thanks you Spiro Agnew) Boehner, Cantor, Ryan, McConnell, etc. carry out their plans to undermine the President by any means necessary.  I suspect they'd rather torch the country than "compromise", or worse yet, have to forego the media spotlight.

Debt Ceiling Talk and the Assault on Common Sense

In the political stalemate surrounding the budget talks and the decision as to whether or not the debt ceiling will be raised, it seems as though common sense has been dragged to a back alley and been beaten senseless.
Before demanding cuts in Social Security, Headstart, and Pell Grants, why not take a step back from the cliff and logically review the financial status quo?
There's an inherent lack of fairness in our tax system that urgently needs to be addressed. How is it possible, for example, that Exxon-Mobil turned a $19 billion profit in 2009, and received a $156 million tax rebate from the IRS? Citigroup, in addition to receiving $45 billion in bailout funds (not to mention the federal government agreeing to absorb potentially hundreds of billions of dollars in losses on "toxic assests") turned a $4 billion profit, and paid no tax. These are but two examples from a very long list of corporations that are not only avoiding paying any federal income taxes, they're actually receiving huge refund checks from the IRS!
No one is arguing that our budget woes could, or should, be solved on the backs of these large corporations, but conversely we're all in this together, and fairness ought to have a place at the table. The U.S. Public Interest Research Group estimates $210 billion in revenue would become available by closing off-shore tax havens. Another $23 billion would be generated by making sure hidden profits made by hedge fund and private equity managers are accounted for. There's not an ounce of common sense in the fact that millionaire hedge fund managers pay a lower tax rate than teachers or police officers.
There's not an ounce of common sense in allowing corporations that shift hundreds of billions of dollars overseas every year to shift their tax burdens (responsibilities) to the rest of us.
Accorting to The Big Picture, corporate taxes as a percentage of federal revenue were 27.3% in 1955, as opposed to 8.9% now. With government increasingly "off their backs", one wonders what's happened to all that additional revenue? It doesn't appear to have been funneled into job creation!
Just as we can't afford not to raise the debt ceiling (defaulting on our obligations = soaring interest rates), it makes no sense not to include sensible revenue enhancements (raising taxes) as a key component in tackling our financial crisis. Close loopholes, raise the tax on corporations (albeit slightly), and ask those who are currently earning millions of dollars to pay their fair share. And, just in case common sense is still a viable option, how about bringing our troops home from Iraq and Afghanistan? As of 12:58 p.m. EST, the cost of these wars was $1,223,006,125.00 and growing http://costofwar.com/en/