Republican Tax Cuts — Lies & Myths

Bruce Bartlett helped draft the 1981 tax cut while on the staff of Rep. Jack Kemp of New York. The Kemp-Roth tax bill was the basis for this legislation. He is the author of Reaganomics: Supply-Side Economics in Action, published in 1981.

❝ Stymied by Congress’s failure to repeal Obamacare, President Trump hopes to get an easy legislative victory by turning again to the same well that Republicans have drunk from so often in the past—a big tax cut. All thoughts of fundamental tax reform appear to have been abandoned and the tax cut will simply add enormously to the deficit that Republicans railed against continuously when Barack Obama was in office.

❝ Republicans will make grandiose claims for the growth effect of their tax cut—Treasury Secretary Steve Mnuchin has said there will be so much additional growth that federal revenues will not fall because the economic pie will be so much bigger.

❝ We have heard such claims before and they proved to be groundless. Indeed, they are simply lies. The purpose of cutting taxes is not in fact to raise growth but to downsize government, which is an end in itself for Republicans, whether or not it raises growth. They believe there is only so much freedom to go around and when government gets bigger it necessarily comes at the expense of individual liberty. Therefore, cutting government is per se a good thing…

❝ As of 1988, the Economic Recovery Tax Act of 1981 reduced revenues by a total of $264.4 billion, according to Reagan’s last budget. Various tax increases took back $132.7 billion of that. I’ve always wondered how many Republicans who assert that higher growth from the tax cut paid for much of the cost of the tax cut are implicitly counting revenues from legislated tax increases in their calculations? It is my observation that few Republicans today know that Reagan ever raised taxes and most would be shocked to find out that he raised them a lot. The 1982 Tefra bill was the largest peacetime tax increase in American history…

❝ I would not deny that the 1981 tax cut stimulated economic growth to some extent, but Republicans have a tendency to attribute all of the increase in growth after 1981 to the tax cut, when in fact much of it was the normal bounce back from the economic recession that began in July 1981 and ended in November 1982, according to the nonpartisan National Bureau of Economic Research…

❝ Trump may be right that the Republican Congress will once again abandon any semblance of concern for the budget deficit and enact yet another budget-busting tax cut. But no one should be under any illusion that it will do much to raise economic growth or reduce unemployment — certainly not enough for the tax cut to pay for itself. That is a fairy tale at best and a rank lie at worst.

RTFA if you’re an economics geek, too. Lots of alleyways to examine. A forest of concern and craptastic Congressional blather to overcome. Bartlett’s credentials and experience is valuable. He’s not only been down this road before — he worked for the creeps who built it, mostly as an experiment that failed.

Thanks, Barry Ritholtz

Chart of the Day: how Trump really did among Black voters

❝ As part of his touching remarks about Black History Month this morning, President Trump boasted that he “ended up getting substantially more” of the African-American vote than past Republican candidates. Glenn Kessler briefly picks this apart here, but everything is better with a chart. So here’s a chart. It shows the share of the black vote since 1972 for Republicans running against white Democrats.

‘Nuff said.

The Death Tax deception – and other lies

It’s an estate tax and almost no one pays it.

In 2013, 2,596,993 Americans died, according to the Centers for Disease Control and Prevention.

About 5,000 of them paid a tax after that mortal event. To be more accurate, their estates paid whatever tax was owed. That means 2,591,993 Americans died that year without paying any tax.

In other words, just 0.19 percent of all deaths in 2013 resulted in a tax. When 99.81 percent of all deaths don’t create a taxable event, calling it a death tax is mathematically nonsensical…

Why would someone use the phrase “death tax” when more than 99 percent of deaths don’t result in a tax? Because he is either a) innumerate, b) ignorant or c) trying to deceive you. There are no other possibilities.

Then, Barry trudges through a range of definitions for other taxes – and jogs into conversation-mode for an explanation of why he’s an ex-Republican:

Because the modern GOP has tacked so hard and far to the right, and it has gotten into bed with religious zealots who have no use for science. I simply have no reason to want to be associated with that sort of ideology. Even though I am socially progressive, I am still fiscally conservative.

When I lived in Nassau County on Long Island, then controlled by a Republican political machine, I was a registered Republican. When I lived in New York City under a Democratic machine, I was a registered Democrat. In both instances, the primary functioned as the general election. Today, I am a registered independent. I voted Libertarian last election.

And I still want my roads paved.

RTFA to thoroughly understand that last sentence.

Thanks to my favorite Recovering Republican

Don’t blame Health Law for high part-time employment – because Republicans are lying

Don’t blame the health law for high levels of part-time employment. In fact, using the law’s definitions, part-time work isn’t increasing at all as a share of employment…

Nearly 8 million American were working part-time in September because they couldn’t find full-time work. Overall, 27 million people — nearly a fifth of all employees — are working part-time, well above historical norms.

Many critics of the Obama administration have pointed the finger for the prevalence of part-time jobs at the Affordable Care Act, the 2010 law better known to some as “Obamacare.” The law’s so-called “employer mandate” requires most midsize and larger companies to offer health insurance to their full-time employees. That, critics argue, provides companies with an incentive to hire part-timers instead…

But a closer look at the data provides little evidence for the notion that the health law is driving a shift to part-time work…

First of all, over a longer time frame, part-time work has actually been falling as a share of employment in recent years. Before the recession, about 17% of employed Americans worked 35 hours or less, the standard Labor Department definition of “part time.” During the recession, that figure rose, briefly hitting 20%. It’s been trending down since then, but only slowly, hitting 19% in September.

If the health law were driving employers to cut employees’ hours, the most vulnerable workers would likely be those working just above the 30-hour cutoff. That means the data would show a decline in those working 30 to 34 hours and an increase in those working less than 30 hours.

That isn’t what’s happening. The share of part-timers who say they usually work between 30 and 34 hours at their main job has been roughly flat over the past three years, at about 28%. (September data aren’t yet available.) If anything, it’s actually risen in the past year, though the change has been minor. The share working just under 30 hours has indeed risen somewhat, but the share working under 25 hours has fallen—suggesting that employers are giving part-timers more hours, rather than cutting full-timers’ hours back.

Other data tell a similar story. Average weekly hours—a measure that comes from companies, rather than workers themselves—have been flat for the past year, and are near their highest level since the recession. Restaurants, one of the sectors most often cited as likely to shift to part-timers, haven’t cut workers’ hours over the past year.

None of this, of course, means that employers won’t cut workers’ hours in the future…But there’s little evidence they’ve done so yet.

Editing this down to fit on the blog for commentary was a trip. The WSJ crew has never been noted for smiling over good news for American workers. Now that Rupert Murdoch owns the paper, the swing to the Right has only increased.

So, if you compare my copy to the original linked to above – you’ll see I’ve cut away the conservative crystal ball add-ons. Every time there’s a good news paragraph the WSJ plugs in an extra sentence or two to say – “this can all come crashing down and bad news might return”. Fracking hilarious if it wasn’t just repetitious ideology.

Meanwhile, if your stomach can take it don’t mute the sound when CNN or your local TV channel puts up the required clips of Tea Party know-nothings or Republican “leaders” saying exactly the opposite of the labor statistics. You’ll hear what you’re supposed to believe in – along with the Easter Bunny.

The Obama spending binge that never happened

Of all the falsehoods told about President Barack Obama, the biggest whopper is the one about his reckless spending spree. As would-be president Mitt Romney tells it: “I will lead us out of this debt and spending inferno.”

Almost everyone believes that Obama has presided over a massive increase in federal spending, an “inferno” of spending that threatens our jobs, our businesses and our children’s future. Even Democrats seem to think it’s true.

But it didn’t happen. Although there was a big stimulus bill under Obama, federal spending is rising at the slowest pace since Dwight Eisenhower brought the Korean War to an end in the 1950s.

Even hapless Herbert Hoover managed to increase spending more than Obama has. Here are the facts, according to the official government statistics:

• In the 2009 fiscal year — the last of George W. Bush’s presidency — federal spending rose by 17.9% from $2.98 trillion to $3.52 trillion. Check the official numbers at the Office of Management and Budget.

• In fiscal 2010 — the first budget under Obama — spending fell 1.8% to $3.46 trillion.

• In fiscal 2011, spending rose 4.3% to $3.60 trillion.

• In fiscal 2012, spending is set to rise 0.7% to $3.63 trillion, according to the Congressional Budget Office’s estimate of the budget that was agreed to last August.

• Finally in fiscal 2013 — the final budget of Obama’s term — spending is scheduled to fall 1.3% to $3.58 trillion. Read the CBO’s latest budget outlook.

Over Obama’s four budget years, federal spending is on track to rise from $3.52 trillion to $3.58 trillion, an annualized increase of just 0.4%.

What people forget (or never knew) is that the first year of every presidential term starts with a budget approved by the previous administration and Congress. The president only begins to shape the budget in his second year. It takes time to develop a budget and steer it through Congress — especially in these days of congressional gridlock.

The 2009 fiscal year, which Republicans count as part of Obama’s legacy, began four months before Obama moved into the White House. The major spending decisions in the 2009 fiscal year were made by George W. Bush and the previous Congress.

Republicans who aren’t in the Kool Aid Party Ignorance Patrol know enough to activate Keynesian remedies while plunging into the worst recession since the Great Depression. The crap about dribble-down economics may keep meatballs like David Stockman in royalties from book sales at Koch Bros. jamborees – but, when push comes to economic shove, keeping the unemployed from storming the Wall Street Bastille or the Congressional Clown Show requires doing things that actually work.

The Wall Street Journal – the owners of Marketwatch – have a responsibility to provide legit numbers to their subscribers as often as possible. A certain amount of Heritage Foundation agitprop is always icing on the reality cake and the transfer of power to Rupert Murdoch layered the frosting of rightwing lies a bit thicker. But, they can’t afford to dump reality altogether in the face of competition which ain’t about to disappear.

Republicans and the Mittster will crank up Rove-ish lies about these facts as much as they can. And don’t kid yourselves – they know they will be lying. They are part of that investing class the WSJ wants to keep as subscribers. They know this is the real deal. But, ideology is dearer to Tea Party Republicans than to an infomercial peddler offering you abs of titanium from 2 double-A batteries and a patented whirligig.