Monday, October 16, 2017

The Big Lie keeps getting Bigger


There is a detectable air of desperation in the claims being made by Pumpkin Potemkin and the Insane Republican Posse regarding their demonstrably insane tax cut for the rich plan. They must have the tax cuts passed regardless of how badly they treat the lower 80% of taxpayers. And to convince those poor suckers, the benefits that will flow from it just seem to grow bigger every week.
President Trump’s top economist argued in a report issued on Monday that corporate tax cuts being pushed by Republicans would increase a typical household’s income by between $3,000 and $7,000 a year, hinting at a primary argument the administration will make in drafting and selling its tax plan.

Mr. Trump has endorsed a framework tax proposal, along with Republican leaders in Congress, that would reduce the top corporate rate to 20 percent, from 35 percent. While the administration says that such a cut is the best way to give workers a raise, many economists have called the administration’s claims overly optimistic.

In a sign of how heavily the administration will lean on the argument, the president said last week in a speech in Pennsylvania that the proposal would “likely give the typical American household a $4,000 pay raise,” citing his Council of Economic Advisers.

The council is led by Kevin Hassett, an economist whose academic work has argued that high corporate tax rates hurt workers, and that when those tax rates fall, worker incomes rise sharply. The Monday report is the council’s first published study on the potential effects of the tax proposal.

It does not attempt to analyze the full Republican proposal, which still lacks key details on the income ranges for tax brackets, the rules to qualify for certain lower business tax rates and how to prevent multinational corporations from avoiding taxes by channeling profits to ultra-low-tax countries.

Instead, it focuses on one detail that Mr. Trump has insisted is not negotiable: the reduction in the top corporate income tax rate.

The report draws heavily on several economic studies that find similar results to Mr. Hassett’s: that the so-called incidence of corporate taxation falls mainly on workers, meaning they have much to gain if such rates are cut. It concludes that if the corporate rate were cut to 20 percent, the median American household, which earns just under $60,000 a year, would earn between $3,000 and $7,000 more than it otherwise would have.

Mr. Hassett said in a conference call with reporters that those gains could be even larger than the calculations suggest, “because America’s broken corporate tax system creates incentives for firms to hold their profits outside our borders.”

The administration contends that those incentives have depressed wages for decades. The report begins with a declaration that “wage growth in America has stagnated,” even as corporate profits have soared, because “the relationship between corporate profits and worker compensation broke down in the late 1980s.”
And so we have to believe that an administration stuffed with corporatists will pass a tax bill that will greatly benefit working people. And someday Pumpkin will walk arm in arm with Kim jong Pudge into the sunset.

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