Posts Tagged Income-Inequality
NOTE: Just a few days after Donald’s Inauguration, I described the basics of what might have been Trump’s expected Tax Plan in a blog post. Three months later, it’s still quite vague!
Although Trump prefers to label it as Tax Reform, yesterday’s big presentation was nothing but a vague suggestion of a Tax Give-Away, mostly to corporations and the top two percent of taxpayers. The stock market displayed its ecstasy by closing down a bit lower, and perhaps wondering if they had seen this movie before. Whatever might come of his Tax Plan, the corporate interests, who truly would benefit from a 57% tax-cut (from 35% to 15%) know that it still must get through Congress, and that is saying something!
Donald Trump will reach Day 100 on Saturday, after which pundits will begIn to slice-and-dice his accomplishments, most of which are quite minimal. That’s why he has been rushing to make big announcements, even if they are still in the early stages, and not thought-out. For instance: his visit to the Treasury Department, a couple of days ago, was nothing but a charade, signing an “Executive Order”, which directed Secretary Steve Mnuchin to do what he is already doing. And then today, Health Care is back in the news, as was an unnecessary briefing on North Korea, for the Senate, at the White House!
Over the past 22 months, Trump has vowed to reform the IRS Tax Code, and he complains that the Corporate Rate is too high. Donald, few companies actually pay the top rate of 35%. In fact, approximately ten percent pay no tax at all! For comparison, the Average “Effective Tax Rate” (after credits and deductions), that U. S. corporations pay is 27.7%, while the average for OECD (industrialized corporations) is 27.1%. So, the actual difference isn’t really much to complain about!
The really big question is how does the Trump Regime expects to pay for these give-aways—tax cuts to corporations; a one-time Tax Holiday for companies to repatriate earnings held overseas; tax cuts for the very wealthy taxpayers; and the elimination of the Estate Tax, which only about 6,000 families pay. And by the way, none of these tax cuts would boost the economy or have much of an effect on job creation!
There is one other give-away, which is not boasted about, perhaps because it tells of a personal special interest group; but, it would certainly appeal to Donald Trump’s billionaire buddies. Many very wealthy people file their taxes as Individuals, which would mean the 35% maximum personal rate. They are, for instance; doctors; lawyers; hedge funds; real estate developers; etc. Donald’s Plan proposes the establishment of some sort of tax vehicle, which would enable such taxpayers to file as corporations—at the 15%.rate!
Parsing the Plan, as presented, I can assume a best-efforts guesstimate, that this Trump Tax Reform Plan might reduce the Treasury Department’s Tax Revenue by, let’ say, $4 Trillion over the next decade, or $400 Billion annually. So, how does the Treasury recoup that huge loss? MAGIC!
Donald Trump and Secretary Mnuchin claim that, by lowering taxes on the wealthy, the economy would grow and that would, in turn, increase tax receipts. Since Ronald Reagan first proposed the “Trickle-Down” Theory, ing 1980, it has never been successfully demonstrated in the real world. The divergence, both in Income and Wealth, however, ,has increased substantially, in America ever since. Why would anyone expect the result be different this rime?
How many times are we going to hear Donald Trump boast about “Gonna-Do’s”, that aren’t on any sort of rational horizon: Health Care; Tax Reform; Infrastructure; Immigration Reform’ Trade Reform; The Wall, etc? At the same time, he acts like Congress and the American People are supposed to kiss his Royal Derriere. No, Donald, you’re no longer a Candidate, you must play by the Constitutional Rules, and we get to keep score!
NOTE #2: Nobel Laureate Paul Krugman described the Trump Tax Plan, in his NY Times column, with the following analogy to a “Twilight Zone” episode, about a six year-old child, with exceptional powers.
Ivanka Trump presents herself as a Champion of Working Moms. Accordingly, she assumes to speak for those who must work–to support their child(ren), as well as for those who don’t (need to)! I cannot honestly speak for women who are, or were, working moms; however; whenever I hear her speak, I hear mostly the typical GOP income-divide.
In fact , whenever I hear any of the Trump Clan speak, I hear a very practiced form of Bait and Switch. Perhaps the Trumps are really descendants of visitors from the planet Metaphor.
When Ms. Trump touts Health Savings Accounts, tor sodden to finance Maternal Leave; let’s be clare, this is no benefit–the woman pays for it. Why isn’t there a provision for Paternal Leave., as well? Of course, most women would need employer approval and, in many cases, the lower-paying jobs would not be held for them. The proven benefits of parental leave, both to children and parents, abound! Oh, for some mysterious reason, the Trump Program will only apply to married women!
And Daddy Donald, of course, touts how hard his daughter works; but, giving of herself, is merely drumming-up support for one more program, intended to display both his and her humanity. When Donald and Ivanka Trump role out such programs, which are intended to appeal to the working class, the should remember to remove the strings and GOP tickers: they’re dead give-aways!
The linked column, by Jill Abramsom, “Ivanka Trump thinks she is in Beauty and the Beast: more like Macbeth”, from The Guardian (UK), most scathingly deflates “Princess I’s” PR balloon, back down to earth.
Following the Presidential Election, there has been an on-again, off-again rally in the stock market, which might have been partially attributed to Donald Trump’s victory, last November. Generally, the stock market performs best in the first and fourth calendar quarters, most years; however, some investors might have placed too much faith in Trump’s vague promises, raising the seasonal spurt even higher. Also, some CEO’s seem to have swooned over his proposals: the corporate tax-rate being halved; escalating depreciation on plant and equipment; eliminating most all regulations; and the “Border-Adjustment Tax”.
As of Friday, the Dow Jones Industrial Average rose 9.3% since Trump won, and the S & P 500 was up by 8.3%. There was little in the way of economic activity to have justified such a surge; however, some investors may have just followed the herd instinct. They wanted to believe! But like any other asset, when the price rises for no apparent reason, there might come a time where it cannot sustain that psychological momentum. Did the markets seem to sense that yesterday?
Ever since he announced his candidacy, in June of 2015, Donald Trump has been harping on two primary goals—the worthless Wall, and his vow to “…replace ‘Obamacare’: with something much better, and at less cost. Just trust me!” HA! Donald raised the stakes too high, before his American Health Care Act had to be pulled yesterday—for the second time—due to insufficient support from his own Republican Party!
Always the person to find a scapegoat to blame–rather than blame House Speaker Paul Ryan, or the entire GOP–Donald blamed the Opposition Party. For a self-proclaimed “Negotiator”, how ludicrous was it to have over-sold the “certain” success of his AHCA, as he had often boasted, and then blame the Democrats…but, for what? He was trying to tear-down a perfectly good (first-step) of a comprehensive plan that could provide Affordable Health Care for all!
Many Americans, including investors, are beginning to wonder if Trump can actually govern! He boasted, before the election, about how many things he would do, beginning “Day One!” But so far, he has accomplished very little. On the negative side, however, the list of his idiotic moves is a mile long!
Consider the following problems that he has been entangled in: the failed raid in Yemen, which resulted in the death of one Navy DEAL and 24 Yemeni civilians; attacking the American Judiciary for rebuking his two Anti-Muslim Bans; his apparent desire to control the Media; threatening a pre-emptive attack on a nuclear-armed North Korea—in China’s back yard; Trump’s potential collusion with Russia, and so on!
A number of Americans who voted for Trump have been on TV stating that they are having Voter’s Remorse. It’s times like this when I wish that we had a Parliamentary System. That way, just one “No Confidence!” vote would place M. P. Donald Trump, in a back-bench seat, where he belongs. Oh, if only…!
When Trump stated yesterday that the GOP’s AHCA Plan had to be pulled, distancing himself from bad news as always, he proclaimed that the next item of business would be Tax Reform. But there are two problems with that strategy, which he is overlooking: a number of deep-pocketed conservative organizations, including the Koch Brothers, have come out again Trump’s Tax Plan; and the money that he was supposed to take from ACA customers was necessary to fund his large tax cuts for the Wealthiest two-percent!
Meanwhile, many institutional and individual investors are, no doubt, using this weekend to review Trump’s record—both positive and negative—and to decide what their next financial moves might be. Additionally, many overseas investors are also considering whether the recent Trump Rally is real, or just a market bubble! I sure wouldn’t be surprised it there is a pause, at least, in the rally–or perhaps a reversal.
President Barack Obama’s signature legislation, the Affordable Care Act, was designed to provide health insurance for poor Americans who could not afford it. Many people already have health insurance through employer-sponsored programs, or through Medicare, for Senior Citizens. Small businesses, however, often do not offer insurance, and minimum-wage workers cannot afford it anyway. Uninsured Americans were just left to fend for themselves and, of course, private insurance has always been quite expensive.
The Affordable Care Act provide subsidies for poor Americans, including seniors who could not even afford Medicare, and to extend the Medicaid program to more low-income citizens. Many GOP-controlled states, such as Florida and Texas, have not accepted the Extended Medicaid, even though the Federal Government picks-up most of the cost for the first ten years.
Prior to ACA, cheap health insurance policies, designed for young adults, excluded “pre-existing conditions”, and even maternity was often excluded for young women. For older Americans, the premiums were exorbitant, and out of reach for many. Policy holders took comfort in being “insured”; however, they didn’t realize how little the policies actually covered—that is, until they became sick or injured!
The total number of previously uninsured Americans, who were able to buy subsidized health insurance, through ACA, approaches 30 million, when the 11 million covered by the Medicaid Extension is included. Many state Legislatures, that have Republican majorities, have not even allowed their Insurance Commissioners to negotiate for lower premiums, with the insurers. Basically, those states were working against ACA—and against their own residents.
ACA was assumed to be the first step in providing Affordable Health Care for all Americans. Like Medicare, some 50 years before, this comprehensive program was expected to need to be amended and modified over time. But the Republicans, at the Federal and State levels, just fought against the program every step of the way.
TChe Affordable Care Act also required the Health Insurance Industry to meet certain goals: pre-existing conditions would be covered; contraceptives and maternity must be included for women; equal premiums for males and females; premiums for the elderly could not be more than three times those paid by the younger insured; and no more than 20% of customer premiums would go toward expenses. Many of these requirements have been dropped, or watered down, under the GOP’s AHCA.
When people do not have health insurance, they only seek medical assistance when they are gravely sick or injured, generally at hospital Emergency Rooms. By then, the medical condition is usually more aggravated, and the medical personnel are working without any knowledge of the patient’s medical history. The cost of health care, in this advanced stage, is normally much more expensive, and society and the hospitals bear the expense.
The most humane, as well as the most cost-effective, way to address the need for Affordable Health Care, is to make it available on a regular preventive basis. Should we ignore the grievously sick, and allow them to die on the streets? Do we continue to just ignore the overall costs—assuming that they will just go away? Realistically, we should take pre-emptive action!
Among all of the world’s industrialized nations, American spends the most on health care; but, it gets the lowest return on its investment, by most every metric. Is this how we wish to continue on? Should we address the need for providing Health Care for all, in a caring and effective manner? Or do we, as a Nation, just continue to sink. further and further into the bowels of Humanity.
NOTE: I was wondering who Donald Trump would try to make the scapegoat when his first foray into major legislation had to be canceled twice, for insufficient support. Would it be House Speaker Paul Ryan or the entire GOP? No, he blamed the Democratic Party since they were perfectly happy with the ACA, which they passed seven years ago! Next stop: Trump’s Tax Scam!
Once the Campaign ended, Donald Trump lost the power to blame everything on the Incumbent. “Obamacare is awful!” “With Dodd-Frank, no one can get a loan!” “We need to bring our Corporate Tax Rates down!” Oh, let’s not forget his pledges to “Make America Great Again!” and of course, “I will ‘Drain the Swamp!’”
When he was running for office, whatever he said could be written in pencil: it was just campaign rhetoric! But now, Donald Trump should realize that he has to assume responsibility. Actions can, and will, have implications! The Anti-Muslim Ban has been rebuked by the Judiciary. The failed raid in Yemen caused one American death, and the lives of 28 Yemenis. And his vow to “Repeal “Obamacare” has brought-out thousands of extremely agitated Americans who are quite happy with their existing Affordable Health Care.
A week ago, Trump actually did go on a full-blown rally, spewing hatred and lies. Then, perhaps Donald had some sort of epiphany, and realized that he’s supposed to be the leader of All Americans! As yet, however, he still refuses to assume any responsibility whatsoever. According to Trump: President Obama is behind the thousands of angry Americans at Town Hall Meetings with Members of Congress, and he claims that the Generals are the reason for the failed raid in Yemen. Donald Trump, ever the blame-shifter, claims: “They lost Ryan!” Has Trump ever assumed responsibility…for anything? Ever?
Some columnists have suggested that his Address last night had a softer tone, if not a softer tune. Favorability polls nudged slightly higher, and the Dow Jones Industrial Average rose by 303 points today, or 1.46%. But, what did they hear from Trump’ s words? That softer tone is merely what people wish to hear, given the dire pessimism that abounds! Once the hype subsides, however, most Americans will realize that it just remains business as usual—with Trump!
Donald has a sort of “Tower of Babel” effect on people. When he speaks, everyone—especially the believers—hears what they wish to hear! He mentions tax cuts for the middle class; but, his Tax Reform will mostly go to the wealthy and corporations. Bring back high-paying industrial jobs; but, you’ll need the requisite job skills for today’s digital technology?
With Donald Trump, when he keeps talking about what he’s gonna do, I can only think of three things. How many times are we going to hear the same ignorant ideas? What will they cost us, the Taxpayers? And where is the Plan, and with factual details, on the Internet?
Donald, it’s time to get off the pot!
NOTE: This is an open-letter that Nicholas Kristof wrote, in his regular NY Times column, to awaken all Trump Voters:
Dear Trump Voters,
You’ve been had. President Trump sold you a clunker. Now that he’s in the White House, he’s betraying you — and I’m writing in hopes that you’ll recognize that betrayal and hold him accountable.
Trump spoke to your genuine pain, to the fading of the American dream, and he won your votes. But will he deliver? Please watch his speeches carefully. You’ll notice that he promises outcomes, without explaining how they’ll be achieved. He’s a carnival huckster promising that America will thrive with his snake oil.
“We’re going to win, we’re going to win big, folks,” Trump declared Friday at the CPAC meeting, speaking of his foreign policy.
Great! Problem solved. Next? He then outlined his take on drug trafficking and what will surely be his outcome:
“No good. No good. Going to stop.” Wow! Why didn’t anyone else think of that?
Similarly, all looks rosy for tax outcomes: “We’re going to massively lower taxes on the middle class,” Trump said. But that seems like a classic shell game.
The Tax Policy Center estimated that Trump’s tax plan (to the extent that there is one) would hugely increase the federal debt and give middle-income households an average tax cut of $1,010, or 1.8 percent of after-tax income — while the top 1 percent would save $214,690, or 13.5 percent of after-tax income.
Trump made more than 280 campaign promises as a candidate, and a few — such as infrastructure spending to create jobs — would be sensible if done right. But there still is no infrastructure plan, and The Washington Post Fact Checker is tracking 60 specific campaign promises and found only six cases so far of promises kept.
It’s still early, and Trump has nominated a smart conservative to the Supreme Court and followed his campaign line on issues like barring refugees.
But while you voted for Trump because you put faith in his gauzy pledges, I bet he will do no better with campaign promises than with marriage vows.
Health care will be one of the greatest betrayals. On Friday, he described his plan: “We’re going to make it much better, we’re going to make it less expensive.”
Yet the steps that Republicans seem likely to take on health care will hurt ordinary Americans.
For example, Trump seems poised to weaken the contraception mandate for insurance coverage and curb funding for women’s health clinics. The upshot will likely be more unintended pregnancies, more abortions, more unplanned births — and more women dying of cervical cancer.
The biggest Trump bait-and-switch was visible Friday when he talked about giving Americans “access” to health care. That’s a scam his administration is moving toward, with millions of Americans likely to lose health insurance: Instead of promising insurance coverage, Trump now promises “access” — and if you can’t afford it, tough luck.
This promise of “access” is an echo of Marie Antoinette. In Trump’s worldview, starving French peasants wouldn’t have needed bread because they had “access” to cake.
Many of you voted for Trump because he campaigned as a populist. But instead of draining the swamp, he’s wallowing in it and monetizing the presidency. He retains his financial interests, refuses to release his taxes or explain what financial leverage Russia may have over him, and doubled the fee to join Mar-a-Lago to $200,000.
The greatest betrayal of all will come if, as some of his advisers recommend, he “reforms” and tears holes in some of the big safety net programs like Medicaid, Social Security or Medicare. Medicaid is particularly vulnerable.
Trump howls at the news media, not just because it embarrasses him, but because it provides an institutional check on his lies, incompetence and conflicts of interest. But we can take his vitriol: When the time comes, we will write Trump’s obituary, not the other way around.
Let’s not get distracted by his howls or tweets. What’s most important at this moment is not Trump’s theatrics, but the policies he is putting in place in areas like health care and immigration that will devastate the lives of ordinary Americans.
Trump’s career has often been built on scamming people who put their faith in him, as Trump University shows. Now he’s moved the scam to a much bigger stage, and he boasts of targeting Muslims, refugees and unauthorized immigrants.
Please don’t cheer, or acquiesce in these initial targets. The truth is that among the biggest losers from Trump policies will be you Trump voters, especially those of you from the working and middle class. You were hoping you’d elected a savior, and instead Donald Trump is doing to you what he did to just about everyone who ever trusted him: He’s betraying you.
The sooner you recognize that, the sooner you can fight back and push for policies that will protect your health care and Social Security, defend the integrity of our election system and protect your own interests. You have a false savior, and you will have to turn on him to save yourselves and our nation.
Note from Mr. Kristoff: I invite you to sign up for my free, twice-weekly email newsletter. Please also join me on Facebook and Google+, watch my YouTube videos and follow me on Twitter (@NickKristof).
In a recent post, I warned against Donald Trump taking control of the Federal Reserve Board, our central bank, and then directing it toward his own politically biased agenda. The link for that post is: https://thetruthoncommonsense.com/2017/02/09/dont-mess-with-the-fed/?iframe=true&theme_preview=true. Since then, one Fed Governor resigned unexpectedly, thus giving Trump a couple of seats to fill, and then he can nominate his own Chairman, as of February 2018.
The manner in which Donald Trump and his Regime manages the economy, will indeed, have major effects on our Society, in general. Income-inequality, divisiveness and widespread frustration with the government, can have a major effect on Who and What America becomes!
The Role of the Federal Reserve Board, our central bank, is to foster economic conditions that achieve both stable prices and maximum sustainable employment. The optimum is referred to as the Goldilocks Economy, similar to the mid-to-late 1990s: “Not too hot, not too cold, but just right.” The Fed’s goal, in effect, is to manage for Balance.
Republicans in Congress have always wanted to have greater control over the Fed, which would, in effect, politicize it. If the economy were destined to fluctuate between the policies of one party, and then shift to the other party’s goals, the general results would surely be disastrous for the overall Health of the Economy.
Donald Trump has already announced that he will replace Fed Chair Janet Yellen, when her Chairmanship expires. With less than one month in office, Trump has already been trying to browbeat the Fed not to raise rates. There is a reason why democracies insist on their central banks remaining apolitical: wrong moves, especially on purpose, in either direction, or if postponed, may lead to an even more horrendous economic situation.
An interest rate increase, or cut, are usually made after careful economic analysis, based on comprehensive reports, collected from the twelve regional federal reserve banks. Those reports provide the rationale for monetary policy. Arbitrarily cutting the “Funds Rate”, or failing to increase it when appropriate, might result in an overheated economy—and high inflation—on the up-side. Improper moves in the other direction, could result in deflation—price implosion—and a similarly dysfunctional economy.
When the Fed’s monetary policy committee raised rates in December, to a range of 0.50%-to-0.75%, it estimated that a 0.25% rate hike was necessary to keep the economy from accelerating. Balancing the economy assumes that minor adjustments are best, rather than waiting for the economy to either over-inflate on the up-side, or to deflate or the down-side.
Now that Steven Mnuchin has been sworn-in as Secretary of the Treasury, Donald Trump might just turn his attention more toward the Fed nominations. The key question here, is whether Secretary Mnuchin will work smoothly with the Fed, or merely follow Donald Trump’s incongruous agenda. Hopefully, he will cooperate with the Fed, and focus on maintaining a stable economy, for all America!