democrat

Trump’s Tax Plan Is Aimed At the 2018 and 2020 Elections, Not U.S. Competitiveness

President Trump wants to cut the tax rate for all American businesses to 15 percent, and damn the deficit. If you believe him, any damage from higher deficits will be minor compared to the benefits for US competitiveness, economic efficiency, and tax fairness. The truth is, those claims are nonsense; and the real agenda here is the 2018 and 2020 elections. Without substantial new stimulus, the GOP will likely face voters in 2018 with a very weak economy – and tax cuts, especially for business, are the only form of stimulus most Republicans will tolerate. Moreover, if everything falls into place, just right, deep tax cuts for businesses could spur enough additional capital spending to help Trump survive the 2020 election.

Let’s review the economic case for major tax relief for American companies. It’s undeniable that the current corporate tax is inefficient – but does it actually make U.S. businesses less competitive? The truth is, there’s no evidence of any such effects. In fact, the post-tax returns on business investments are higher in the United States than in any advanced country except Australia, and the productivity of businesses is also higher here than in any advanced country except Norway and Luxembourg.

The critics are right that the 35 percent marginal tax rate on corporate profits is higher than in most countries. But as the data on comparative post-tax returns suggest, that marginal tax rate has less impact on investment and jobs than the “effective tax rate,” which is the actual percentage of net profits that businesses pay. On that score, the GAO reports that U.S. businesses pay an average effective tax rate of just 14 percent, which tells us that U.S. businesses get to use special provisions that protect 60 percent of their profits from tax (14 percent = 40 percent of 35 percent).

Tax experts are certainly correct that a corporate tax plan that closed special provisions and used the additional revenues to lower the 35 percent tax rate would make the overall economy a little more efficient. But lowering the rate alone while leaving most of those provisions in place would have almost no impact on the economy’s efficiency – and the political point of Trump’s plan depends on not paying to lower the tax rate.

Finally, would a 15 percent tax rate on hundreds of billions of dollars in business profits help most Americans, as the White House insists, since 52 percent of us own stock in U.S. corporations directly or through mutual funds? The data show that most shareholders would gain very little, because with 91 percent of all U.S. stock held by the top 10 percent, most shareholders own very little stock.

Moreover, the proposed 15 percent tax rate would cover not only public corporations but also all privately-held businesses whose profits are currently taxed at the personal tax rate of their owners. So, Trump’s plan would slash taxes not only for public corporations from Goldman Sachs to McDonald’s, but also for every partnership of doctors or lawyers, every hedge fund and private equity fund, and every huge family business from Koch Industries and Bechtel, to the Trump Organization.

There is no doubt that the President’s tax plan would provide enormous windfalls for the richest people in the country. Beyond that, it may or may not sustain growth through the next two elections, since even the best conservative economists commonly overstate the benefits of cutting tax rates. But the truth is, there aren’t many other options that a Republican Congress would accept.

This post was originally published on Dr. Shapiro's blog.

 

Trump's Great Betrayal

A new statement from NDN’s Simon Rosenberg:

“Candidate Donald Trump promised every day Americans his Administration would fight for them. Two months into his Presidency it is clear he has no intention of following through on his promise. These early months of the Trump Presidency could become known as “The Great Betrayal.”

Fair? Let’s take three simple examples:

Health Care – Candidate Trump promised health reform that would cover everybody, lower costs and not cut programs like Medicare and Medicaid. The House GOP health care bill he has endorsed and promoted would dramatically increase the number of uninsured (25m, 7% of US population); would increase costs for everybody, particularly for older people; and would savagely cut Medicaid. His plan would make tens of millions of those people he pledged to fight for sicker and poorer, while giving hundreds of billions of new tax cuts to wealthy people like those he hangs out each weekend at Mar-a-Lago.

Few proposals in American history could do as much harm to working people as the health care plan championed by Donald Trump these past few weeks. It is literally the opposite of what he promised he would do.

His Budget – The partial budget document Trump released last week would make massive cuts in education and job training, transportation and infrastructure, simple environmental protections and many other programs critical for working people to live good and decent lives. Whether working people would get a tax break for all of this is unclear as he hasn’t released a complete budget. But if his budget follows the strategy of his health care plan expect the benefits to flow to those already wealthy with little left for those struggling to get by.

His Staff – Despite his campaign rhetoric, the Trump Administration led by the wealthiest collection of Americans to every lead an American Administration in the modern era of American politics, and perhaps ever. It is full of Wall Streeters, including 5 former executives of Goldman Sachs. Working class champions are as hard to find in the early Trump Administration as those immigration documents of Melania’s he promised back in August.

Based on what he has done in his first months in the White House, it is now clear that Donald Trump lied to the American people about his intentions as President. Rather than championing the working man, Donald Trump has backed proposals that would transfer hundreds of billions of dollars from every day Americans to those already wealthy and well off. It is an astonishing and historic betrayal of the people he promised to serve, leaving tens of millions sicker and poorer and even more with reduced life opportunities. Donald Trump hasn’t shown respect to those he pledged to fight for, he has shown them hostility and contempt. He is far more venal Robber Baron than virtuous populist, far more Calvin Coolidge than Andrew Jackson, far more an oligarch than a man of the people.

I am positing for others to debate that no President in American history as veered as far from the core promises and message of his campaign as Trump has in his first few months. It is Trumpian in its scale, something that I hope becomes known as “The Great Betrayal.”

Column: An Independent Audit of Trump's Companies Is Now Necessary

US News and World Report has published Simon's ninth column, "An Independent Audit of Trump's Companies Is Now Necessary," in his weekly Op-Ed series that will every Thursday or Friday.

Be sure to also read his recent column, "The Pernicious Politics of Oil - On Trump's embrace of petro-politics," in which Simon does a deep dive on why Trump 's embrace of plutocratic petro-politics should be worrisome to liberals everywhere.

An Excerpt from "An Independent Audit of Trump's Companies Is Now Necessary"

This week, President-elect Donald Trump thumbed his nose at the government agency that oversees ethics in the Executive Branch by announcing he intends to keep all of his far flung holdings as president. Whether this unprecedented and arrogant act is illegal and unconstitutional and not just unethical will be at the center of what is sure to be a vigorous debate in the coming months.

But the worry about his arrangement is far greater than the issue of propriety and legality. Let me offer a few examples:

It establishes new far weaker norms. Perhaps inspired by Trump's example, we've already seen House Republicans vote to gut their own ethics regime; the Senate GOP is holding hearings on Cabinet nominees without either their FBI background check or ethics clearance completed; challenging anti-nepotism laws, Trump is bringing his son in law, who is also not divesting from all his holdings, into the White House; and Secretary of State nominee Rex Tillerson refuse to recuse himself from overseeing decisions affecting his lifelong employer, Exxon Mobil. In these early days, the new GOP has made it clear it intends to weaken or ignore good government policies put into place decades ago – the very opposite of draining the swamp.

It encourages public corruption. Remarkably, Trump not only refused to adopt the many suggestions outside counsel had for how to ethically manage his holdings, he actually walked back a commitment for the Trump Organization to do no new deals while he is president. In his Wednesday press conference, Trump said the business will in fact be able to do "domestic" deals. This is a clear signal from our next president that investors/courtiers, and one would assume U.S. subsidiaries of foreign companies, should begin lining up at Trump Tower to begin talks on domestic U.S. projects. The benefit of these deals would go directly to the benefit of the Trump family, and since he has not divested, Trump himself. As all of his business dealings are essentially secret, the public would have no way of knowing who was entering into business with the family of the sitting president. The opportunity for public corruption here is perhaps unprecedented in all of American history.

To continue reading, please refer to the US News link. You can Simon's previous US News columns here.

Monday Musings: Natl landscape leaning Dem, security re-emerges as top 2016 issue

State of the race – Despite having two debates this past week, don’t think the race has changed all that much. Clinton still dominates the Dem side, and the big five – Carson, Trump, Cruz, Rubio and Bush – the GOP. With the next round of debates coming in a month, not sure the race will change all that much till then. But you never know.

Where there has been some movement is in general election polling. In two national polls last week Clinton had advantages of at least 3-4 points over most of her opponents in general election match ups. This is significant as pre-recovery Clinton was even or trailed most GOPers. Additionally, Obama’s job approval rating is now clearly up in the high 40s/low 50s, where the Democrats need it to be next year. In the Gallup daily track he has had his best run since early 2013, and hit 50% this weekend for the first time in almost three years. Given the advantage Democrats have in Party ID and favs/unfavs, the race is settling in where it felt like it should be – with Clinton having a modest but significant 3 to 4 point advantage now.

As we wrote last week, however, the dark cloud on the horizon is the lack of enthusiasm in the Democratic coalition, an issue which has plagued the Democrats in 2 of the last 3 elections. Stan Greenberg warned about this in his most recent poll memo and the inadequate Democratic debate schedule is an extraordinary missed opportunity to engage the Democratic coalition a year out. There are many things the Democrats can do to improve their debate schedule. In this memo, I lay out three things they should do right now to help close the gap with a far superior Republican approach to the debates.

Hats off to John Dickerson – I add my voice to the chorus of praise for John Dickerson. The CBS anchor set a very high bar for the future debates. He was in control, fair, subdued, knowledgeable and tough. Kudos to him and CBS for doing such an excellent job on Saturday.

After Paris – There can be little doubt now that the Paris attacks and the Islamic State's effort to reach beyond its current borders will bring a new dynamic to the 2016 race. I offer up some initial thoughts on what is likely to come next in this new essay. But Democrats should be taking all of this very seriously. The Republicans used this sense of an unsafe world to their advantage in 2014. In national polling the basket of issues around foreign policy and security are President Obama’s greatest liability. As I’ve written before, there is an opening here for the GOP to exploit if they are measured and adroit (not likely). But above all else, Paris means that security issues will be a very important part of the 2016 conversation, and Democrats need to be prepared to engage in what will be complicated, volatile policy and political terrain.

"Monday Musings" is a new column looking at the national political landscape published most Mondays here on the NDN site.  You find previous versions here

Fox News Discussion on New Poll, 2010, President Obama

Was on Fox News this morning talking politics.  We took a look at a new NBC/Wall Street Journal poll which you can see here.  The clip is below.

I'm going to write a longer piece on this later today but my general sense of where things stand is that neither party should be happy with where they are today.  The Republicans are stuck at about the same vote share they had in their terrible 2006-2008 elections - 46 percent or so.  The Democrats are way off their vote share in the last two elections - 53 percent - and are hovering in the mid 40s on most measures.  What happens to that 7-10 percent of voters who voted with the Dems in 2006 and 2008 - whether they come back to the Ds, stay home, go with the Rs - is the big question today as we go ever deeper into this complex election cycle.

 

New Gallup poll shows dramatic Dem gains, GOP collapse

A new Gallup poll shows very dramatic gains for the Democratic brand and further evidence of what we've been calling the collapse of the GOP brand.

Key points:

- Democrats lead in Party Identification by one of the largest margins ever recorded by Gallup, 40%-26%.

- The Democratic Party has a 56/38 favorable/unfavorable rating. The GOP 41/52.

- A clear majority believes the Democratic Party is much more likely to bring about the changes the country needs, and are able to manage the federal government effectively.

We've been making the case since the fall of 2005 that the conservative ascendency that brought us Reagan, Gingrich, Bush, the Southern Strategy - and that has so weakened America - has come to an end, and a new era of politics is being born. This new poll is further evidence of the extraordinary opportunity the Democrats and progressives have in the years ahead to move beyond the failed politics of this conservative era and make the big changes the times and the nation requires.

Update: I talked about this conservative collapse in my remarks at our Political Forum this week in DC.

What Happened with the NH Youth Vote?

We have plenty of theories this morning on how and why Clinton pulled out a win in the New Hampshire primary. I am happy to say the youth vote is not being blamed for Obama's loss and instead the Clinton campaign and even some pundits are saying it was because of the youth vote that she won.

Our first concern in the youth vote community was less about who won or lost, and more about how the surge in Iowa would be portrayed if Obama did not win. The conventional wisdom in 2004 was all young people were voting for Dean. That was not true, young voters were split between Kerry, Dean and Edwards. However, that didn't stop the media from blaming young people for Dean's loss. Additionally, when Kerry lost the general election, we spent the next four years explaining that young people did turn out beating a record high from 1992. In the end, it simply did not matter though, the media wrote the youth vote story and it was "young people are all hype, they say they will show up but don't."

Cynics and pundits are on message now. We did not hear many people last night blaming Obama's loss on young people and rather they were claiming it was young people who helped propel Clinton into victory. There may be something to that.

Obama has a wider youth campaign strategy and a broader youth movement happening right now which is why overall he has higher youth numbers. The Clinton campaign saw this and went after a group within the youth demographic they knew they could get-young professional women and working-class young people. Youth turnout overall jumped to 43% up from 18% in 2004.

Obama overwhelmingly got the 18-24 year old bloc (60% vs 22% for Clinton). The 18-29 year old bloc was split, with Clinton having a 2% advantage over Obama (37% Clinton, 35% Obama). If anything, the Clinton win gives the youth vote community an opportunity to tell the story that young people can and must be found on and off campus. Only about 25% of young people are in college, so if you want the youth vote you have to go where they live and where they hang out.

In last few days of the campaign, Clinton was able to appeal to working class young people with her message of Obama living in the clouds and she is working in the trenches. With this basic point, the Clinton campaign went after the 25-29 year old block.

We also can't overlook her moment of tears. Some will say it was contrived, but it seems women ages 25-29 looked at that as first time Clinton showed that politics is about passion, not just a job. Young women in this age group are working on their early careers, struggling with making it and probably have had moments like Clinton had in the coffee shop. They may have said to themselves "yeah, I know how that feels when you work your butt off, try your best and it doesn't seem to work out." So they gave her another shot with their votes.

The good news for young voters is both campaigns-and I would bet Edwards as well-are looking at how much they are investing in their youth programs. We will be watching how the candidates talk about young voters, talk to young voters and what their GOTV efforts look like in Nevada and South Carolina and leading into Super Tuesday.

Young voters now have to decide-are they "fired up" and "ready to go" or do they jump on the "experience" bus. At the very least, the campaigns will have to retool their youth programs to reach the youth communities in Nevada and South Carolina. South Carolina has a large African American population and Nevada has large Latino pollution two parts of the youth community that in 2004 voted in record numbers for Democrats. We are confident Democrats will win the youth vote, 80% of young people in Iowa and 61% in New Hampshire voted for Democrats. The only question we have is which Democrat will they go for?

Jane Fleming Kleeb is the Executive Director of the Young Voter PAC which helps Democratic candidates and State Parties win with the 18-35 year-old vote through endorsements, on-the-ground support, training, strategy and money. She is a regular on Fox and is part of MTV’s Street Team ‘08 representing Nebraska.

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