AP: Senate GOP Tentatively Agrees on $1.5 Trillion Tax Cut

[JA]

Still have not rejected voodoo economics.

Nor will they ever. The GOP pursues tax cuts because it's a power grab on behalf of their wealthy interests which they dress up in the language of that awful economist, Friedman.

[🐒Gods of Prosperity🔱🐲💸]

Still have not rejected voodoo economics.

Nor will they ever. The GOP pursues tax cuts because it's a power grab on behalf of their wealthy interests which they dress up in the language of that awful economist, Friedman.

ok we get it you're a conflict theorist.

[Orser67]

Can't use budget reconciliation to pass a tax reform package that increases the deficit.

I thought they could, but that it would just sunset after 10 years?

It can actually be longer if they extend the budget window, and they're talking about extending the window to 20 or 30 years. Of course, if they do that, than Democrats could use reconciliation in a similar way in the future.

https://www.bloomberg.com/news/articles/2017-06-15/gop-momentum-builds-to-change-rules-for-longer-lasting-tax-cuts

[Blackacre]

Still have not rejected voodoo economics.

Nor will they ever. The GOP pursues tax cuts because it's a power grab on behalf of their wealthy interests which they dress up in the language of that awful economist, Friedman.

Also, tax cuts are the single easiest thing to sell in politics.

[RINO Tom]

The Bush tax cuts were sold as economic stimulus. We ended up with the worst recession in 80 years.

Yeah, THAT'S what caused the recession. LMFAO.

The Bush tax cuts were sold as economic stimulus. We ended up with the worst recession in 80 years.

Anyone with a brain knows tax cuts aren't intended for economic stimulus and don't do anything to improve any important indicators of economic well-being for the majority of Americans. Their sole purpose is to help the rich get richer, concentrate more power in their hands, and let them accumulate even more wealth to sit on while inequality and financial insecurity for ordinary Americans worsens. It's a naked power grab, plain and simple.

Wut.  That's ridiculous.  Tax cuts shouldn't be coupled with expanding the debt, but to say they aren't designed to have a positive economic effect or that they literally don't do anything to improve Americans' economic well-being is insane.

The guy working at a bank probably shouldn't enter discussions about what caused the last recession.

Mhm.

[Kingpoleon]

To be fair 1.5 trillion "isn't that much". It's 0.6% of GDP, which is less than half the cost of the Bush tax cuts. I think they will couple permanent revenue neutral tax reform with temporary tax cuts (so the actual tax reform is permanent while the hike in the standard deduction or whatever they decide to do is temporary). If 1.5 trillion is the price for comprehensive tax reform (and not just a tax cut in disguise, which still is the most likely outcome) I think it's worth it. The US shouldn't rush into austerity like Europe did (yes, I would have preferred more reforms and less austerity in Europe and in my own country), it's better to reduce the deficit by gradually reforming programs like Medicare and Social Security.

It's a huge portion of the federal budget, and austerity is becoming code for "economics I don't like". So-called austerity, tax hikes and spending cuts, is basic Keynesianism.

[mvd10]

To be fair 1.5 trillion "isn't that much". It's 0.6% of GDP, which is less than half the cost of the Bush tax cuts. I think they will couple permanent revenue neutral tax reform with temporary tax cuts (so the actual tax reform is permanent while the hike in the standard deduction or whatever they decide to do is temporary). If 1.5 trillion is the price for comprehensive tax reform (and not just a tax cut in disguise, which still is the most likely outcome) I think it's worth it. The US shouldn't rush into austerity like Europe did (yes, I would have preferred more reforms and less austerity in Europe and in my own country), it's better to reduce the deficit by gradually reforming programs like Medicare and Social Security.

It's a huge portion of the federal budget, and austerity is becoming code for "economics I don't like". So-called austerity, tax hikes and spending cuts, is basic Keynesianism.

The Dutch recovery was anemic in 2012-2014. A mix of spending cuts and tax increases during those economic conditions isn't basic Keynesianism (and interest rates were quite low, so high interest rates weren't an excuse for slashing the deficit). It would have been better to focus on reforms (reducing employment protection, ending rent controls, moving from direct to indirect taxes) while slowing down the deficit reduction. The same politicians who were calling for a balanced budget by 2017 are now waiting to splurge billions while the economy is growing at 3% (and guess what will happen after the inevitable next downturn?). I guess it was preferable to doing absolutely nothing (like the far-right wanted) or following destructive leftist labour market policies and wealth redistribution but it wasn't ideal. Then again, if you phase in reforms over a long time the next governments inevitably will face calls to slow down the reforms so maybe there is a case to be made for what Rutte 2 did.

Damn, I feel like Tender Branson (making a post about Dutch politics in the US general forum).

Anyway, 0.6% of GDP is a lot of money, but there are quite a lot of serious economists who think moving to the ideal tax system (which isn't going to happen) could increase growth by a lot. Trump's goal of 3% is unrealistic (and any extra growth from tax reform will only be temporary), but if you could increase average growth from 1.9% to 2.2% over a decade that's an extra 3% of GDP after 10 years (which should pay for the 0.6%). This isn't going to happen with just cutting taxes (when you get to a certain point tax cuts just don't pay for themselves) but if you raise a lot of revenue in a relatively efficient way and use it to cut inefficient taxes the economy will grow. I completely agree that tax reform ideally should be revenue neutral but that's just unrealistic with the current far-right GOP.

Anyway, the Tax Foundation released a couple of possible revenue neutral tax plans. Their economic model is a bit too hackish (the growth predictions are very rosy), but they're revenue neutral even if you don't count economic growth (which is the right way since I don't trust politicians/politicized think tanks with dynamic analysis) and wouldn't result in a tax cut for the top 1% (in fact the plan that would increase growth the most would raise taxes on the wealthy).

https://taxfoundation.org/four-plans-permanent-pro-growth-tax-reform-2017/

[HisGrace]

Republicans during the Obama Presidency: BUT THE DEFICIT!!!!!!

Republicans during any Republican Presidency: We must cut taxes and massively expand the defense budget *not a single mention of the deficit*

Yep, it's been long established that they're full of sh*t

Between entitlement reform, raising taxes on the wealthy, and defense cuts, if you're not willing to do at least two of those things you have no right to credibly talk about the deficit.

[Badger]

Still have not rejected voodoo Friedmanian voodoo economics.

Santander had it right the first time.

[GoTfan]

Maybe this $1.5 trillion could be spent on something useful? Like healthcare, education, etc?

Crazy idea, I know.

[Kingpoleon]

Maybe this $1.5 trillion could be spent on something useful? Like healthcare, education, etc?

Crazy idea, I know.

*Balancing the budget

[Badger]

Maybe this $1.5 trillion could be spent on something useful? Like healthcare, education, etc?

Crazy idea, I know.

*Balancing the budget

One could do both for that amount of cash

[Adam Griffin]

Wut.  That's ridiculous.  Tax cuts shouldn't be coupled with expanding the debt, but to say they aren't designed to have a positive economic effect or that they literally don't do anything to improve Americans' economic well-being is insane.

Except that any tax cut championed by a Republican administration is absolutely, positively worthless in that regard. Sure, you might get a slightly better than average quarter or whatever after it goes into effect, but there is no structure for it to benefit the economy long-term. As long as Republicans are dead-set on giving >90% of any tax cut to those in the top 10%, it's nothing more than the fleecing of America with no actual benefit for people.

When is the last time some wealthy fool or businessowner said, "oh boy - I've got more money now: better create more jobs!". The answer: never. The only thing that creates more jobs and generates economic growth is consumer demand, which forces businessowners to expand or abdicate potential profit. Until/unless the GOP is willing to divert all of a tax cut to those in the bottom 1 or 2 quintiles of income, this is nothing more than a farce to repay campaign obligations and ratfyck those who their ideology dictates they should hate.

[💥💥 brandon bro (he/him/his)]

The Bush tax cuts were sold as economic stimulus. We ended up with the worst recession in 80 years.

Those have pretty much nothing to do with each other. I know that's been pointed out by other people in this thread, but they have Republican avatars which means people are either going to ignore them or belittle them instead of actually trying to seriously address what they're saying.

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Wow, what a terrible post and opinion. I'll have to bookmark this and trot it out for the next time I see some screed about how the GOP is the anti-Intellectual party.

[Kingpoleon]

Maybe this $1.5 trillion could be spent on something useful? Like healthcare, education, etc?

Crazy idea, I know.

*Balancing the budget

One could do both for that amount of cash

Are you sure we could balance the budget without this tax cut? Or are you adding it on top of the current spending?

That said, I maintain that a federal sales tax would be most effective, as well as a slight corporate tax cut instead of an income tax cut.

[Badger]

Wut.  That's ridiculous.  Tax cuts shouldn't be coupled with expanding the debt, but to say they aren't designed to have a positive economic effect or that they literally don't do anything to improve Americans' economic well-being is insane.

Except that any tax cut championed by a Republican administration is absolutely, positively worthless in that regard. Sure, you might get a slightly better than average quarter or whatever after it goes into effect, but there is no structure for it to benefit the economy long-term. As long as Republicans are dead-set on giving >90% of any tax cut to those in the top 10%, it's nothing more than the fleecing of America with no actual benefit for people.

When is the last time some wealthy fool or businessowner said, "oh boy - I've got more money now: better create more jobs!". The answer: never. The only thing that creates more jobs and generates economic growth is consumer demand, which forces businessowners to expand or abdicate potential profit. Until/unless the GOP is willing to divert all of a tax cut to those in the bottom 1 or 2 quintiles of income, this is nothing more than a farce to repay campaign obligations and ratfyck those who their ideology dictates they should hate.

Best host of the month!

[GeorgiaModerate]

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Geeky joke: Liberals believe the Laffer curve doesn't exist.  Conservatives believe we're always on the right-hand side.

[GoTfan]

Wut.  That's ridiculous.  Tax cuts shouldn't be coupled with expanding the debt, but to say they aren't designed to have a positive economic effect or that they literally don't do anything to improve Americans' economic well-being is insane.

Except that any tax cut championed by a Republican administration is absolutely, positively worthless in that regard. Sure, you might get a slightly better than average quarter or whatever after it goes into effect, but there is no structure for it to benefit the economy long-term. As long as Republicans are dead-set on giving >90% of any tax cut to those in the top 10%, it's nothing more than the fleecing of America with no actual benefit for people.

When is the last time some wealthy fool or businessowner said, "oh boy - I've got more money now: better create more jobs!". The answer: never. The only thing that creates more jobs and generates economic growth is consumer demand, which forces businessowners to expand or abdicate potential profit. Until/unless the GOP is willing to divert all of a tax cut to those in the bottom 1 or 2 quintiles of income, this is nothing more than a farce to repay campaign obligations and ratfyck those who their ideology dictates they should hate.

Best host of the month!

The problem with this idea of cutting taxes to the bone means either a boom-bust cycle or Brownback's Kansas on a national level.