Sunday, December 10, 2017

Republicans "forced" to cut social network spending to pay for tax cuts.

Only the naive or willfully ignorant are surprised.  After all, didn't candidate Trump promise not to touch Social Security and Medicare?

But . . .  isn't this the same Donald Trump who is proven to be one of the world's great con men?  So much so that no New York bank would lend him money any more.

And, of course, it was part of the Republicans' plan from the beginning.   Give tax cuts that mostly benefit the wealthy -- aka "job creators" --  plus a few cosmetic cuts for middle class to make it look generous to all.   And then: "oh-my-gosh, look at the deficit."   Well, we'll just have to cut all those entitlement programs (Social Security and Medicare) to reduce this terrible deficit.

In an article in the Washington Post, Heather Long gives us the numbers.  Just with the proposed tax bill itself:  "Most Americans making less than $86,000 would be worse off, according to a new report by the Tax Policy Center, a nonpartisan think tank."   And that's even before they try to pay for the tax cuts.

Treasury Secretary Steven Mnuchin's argument that the tax cut would completely pay for itself through economic growth has not been backed up by any independent research, according to Long;  and, in fact, Mnuchin never did release the report he promised from his "hundreds of staff working night and day" to analyze the proposal.    Of course this is true.  It's exactly what they planned.

So now what?   Heather Long continues:   "Trump and House Speaker Paul D. Ryan (R-Wis.) have indicated they plan to take a hard look at welfare spending and other safety-net programs for potential trimming."

Exactly.  That's step 2 in the plan.   You're forced to look for savings.   Perhaps the social safety net can be trimmed of waste, eliminate the fraudulent payments, close the loopholes;  get people off welfare.    But . . . 

"The Tax Policy Center warns in its 'Winners and Losers' report released Friday that paying for the tax cut by reducing programs that help the poor and lower middle class would leave many Americans in the bottom 60 percent in a worse spot than they would have been without the GOP tax bill. . . .  

“In other words, they will lose more from the financing mechanisms than they will gain from the tax cuts themselves."

The Tax Policy Center analyzed the figures using three different scenarios:  (1) each household pays the same amount to fund the tax cuts;  (2) each household pays the same percentage of its income to fund the cuts;  and (3)  each household pays in proportion to its taxable income.   Their conclusion:   the three scenarios produced similar results for the Senate tax bill.  "These results emphasize that there are no free lunches in tax reform."

Arguments from the White House Economic Adviser, Gary Cohn, and from most Republicans, emphasize the nebulous idea of "growth stimulus," with wild predictions for economic growth that are disputed by droves of economists.  If you really want to stimulate the economy, it's been proven again and again:   give the money to people who will spend it;  not the people who will invest it or save it or buy real estate -- give it to people who will buy things, thus increasing demand, and thus stimulating growth.   The other way is for the government to spend money on things like infrastructure, thus creating jobs.

But Republicans still cling to their precious trickle down economics that just does not work.    And they're trying it . . . once again.     It all exposes their real purpose in this "tax reform:"    Tax cuts for the very very rich.

Ralph

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