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The Key to Defeating Trump in the General Election Is in a Single Sentence of His in Last Night’s Debate: Angry Americans want big tax cuts for the wealthy

People come [to Trump campaign events] with tremendous passion and love for their country. … When they see what’s going on in this country, they have anger that’s unbelievable. They have anger. They love this country. They don’t like seeing bad trade deals. They don’t like seeing higher taxes. They don’t like seeing a loss of their jobs. … And I see it. There’s some anger. There’s also great love for the country. It’s a beautiful thing in many respects. But I certainly do not condone that at all.

— Donald Trump, during last night’s debate

Back last fall when Ben Carson was surging and according to the polls had overtaken Trump in Iowa, the Koch brothers’ main super PAC saw an opening to end the Trump phenomenon once and for all: It announced plans to buy, I think it was, $1 million in ad time on Iowa and New Hampshire airwaves.

Trump, up to that point, had been campaigning as sort of a fiscal progressive, suggesting (among other things) that he supports a more progressive tax code and maybe even universal healthcare insurance.  Uh-oh; he definitely had to be stopped by a Koch brothers’ super PAC ad campaign.

Unless, of course, he adopted Koch brothers fiscal-policy positions and continued his climate-change-is-a-hoax thing. The latter would be easy, of course, but the former required the hire of a mainstream-wingy Republican fiscal-policy consultant who could, and did, chose a mainstream-wingy Republican fiscal-policy candidate’s already published trickle-straight-down-to-the-sewer-system fiscal policy platform and just double the tax cuts for the wealthy.  Take that, Jeb!

It worked. At least to my knowledge, the ad buy never materialized. Carson collapsed in the wake of the Paris terrorist attacks, Trump’s campaign regained steam—and never looked back.  Until two weeks ago or so, anyway, when comments he made about not wanting people to die in the street for lack of access to medical care raised questions about whether he – he – he supports Obamacare and its Medicaid expansion.

Not to worry.  That mainstream-wingy Republican fiscal-policy consultant was still under contract with the Trump campaign and could quickly rattle off the points on the Movement Conservative list of heathcare-insurance-reform clichés for Trump to post on his campaign’s website as his healthcare-reform proposal.  There was increasing healthcare savings accounts.  There was allowing insurance companies to sell policies nationally.

And of course there was the end-Medicaid-by-giving-the-money-to-the-states-to-use-for-anything-they-wished-even-maybe-Medicaid-which-of-course-Republican-controlled-states-won’t-use-it-for proposal.

And you, Tea Partiers, were starting to worry that Trump doesn’t really want to kill Obamacare and Medicaid!  Fear no longer. It’s safe to vote for him.  Whew.

That was a relief, of course, for Establishment wingers, too.  But, dang.  It’s not enough.  Some of them are pretty worried that although that fiscal policy proposal is still there on his website, Trump never actually talks about it.  Instead he’s always just playing to the white blue-collar folks who’ve been financially devastated by the free-trade treaties.  And by other policies that have had the effect of favoring the well-off, to the detriment of, well, these Trump supporters.  And this guy Bernie Sanders keeps detailing the statistics about wealth and income distribution over the last thirty-five years.  He won’t shut up about it.

Big problem.  Especially since this week it became time for Trump to try to unite the Republican establishment behind him.  Not easy for someone who’s one positive contribution to the political climate is to expose Republican establishment financial-elite proxies as not really so in sync with the Republican blue-collar base after all.

The answer? Ah. Higher taxes! The perfect fiscal dog whistle to the Koch folks and their ilk.

So … the people who come to Trump rallies?  They have anger.  They love this country. They don’t like seeing bad trade deals.  And they don’t like seeing higher taxes on the wealthy.  Because, see, the angry people who come to Trump rallies and who don’t like seeing bad trade deals are wealthy.  Just ask them.

Interesting, isn’t it, that now that Trump has all but wrapped up the nomination and wants the party establishment’s support, his first olive branch is assuring them that he really does support massive tax cuts for the wealthy?

____

UPDATE: An exchange between reader Warren and me today in the Comments thread:

Warren

March 12, 2016 2:43 pm

I missed the part where Trump said “for the wealthy”.

Or are you saying that only the wealthy pay taxes, so it is implied?

 

Me

March 12, 2016 7:06 pm

You missed the part where Trump said “for the wealthy”, Warren? Guess you didn’t read Trump’s tax proposals or any of the articles summarizing them. You should.

The link is to an Oct. 2 blog post by Paul Krugman.  Trump had released his tax plan earlier that day.

Then:

Warren

March 12, 2016 8:53 pm

So is it “a single sentence in his in last night’s debate” or isn’t it?

Did he say “for the wealthy” in that sentence, or didn’t he?

 

Me

Beverly Mann

March 12, 2016 10:39 pm

I said the KEY to defeating Trump in the general election is in a single sentence of his in Thursday’s debate. In a debate performance in which he was saying he wanted to unite the party, he dog-whistled the Kochs, the other donors, and the rest of the Republican establishment that, as president, he would attend to their needs: big tax cuts for the wealthy.

Angry Americans don’t want big tax cuts for the wealthy. But the Republican donors and the rest of the Republican establishment do, and the only one they’re angry with right now is Trump. He announced to them on Thursday that he wants to change that.

The key to defeating him in the general election is to simply point that out. Trump’s tax plan says what it says. It’s just that the only ones who know what it says, other than Paul Krugman and a few other journalists and progressive economists, are the people it was targeted to: the Republican establishment, to keep them at bay.

He was reminding the Republican establishment of his tax plan.

Added 3/12 at 7:44 pm and 10:50 p.m.

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The Great Recession captured in 1 minute of comedy

Just watch this.  It is 1 minute long.

Could it be anymore surreal?

HOW MANY TIMES DO WE HAVE TO DO THIS? HOW MANY FREAKIN’ TIMES DO WE HAVE TO LEARN THE LESSON?

Obviously, the lesson has not been relearned since at least sometime before 1992.  If it had been relearned, we would not be here still proposing solutions that sound just like, almost word for word like the 1920’s.  (start reading at 1920) I mean, it’s not like people haven’t been sounding the horn on what the results would be from the proposed solutions in 1992.   Nope, it’s the same proposals as in 1992, which will produce more of the same.

 

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Small businesses, tax cuts, and reporting

 I sometimes get the ‘eyes rolling’ reaction from people in my social sphere when I insist that at least linking to  original documents is important, and that someone needs to follow up on what an author says someone else says (as a way to gain traction and authority status for their own writing, such as saying the non-partisan Tax Policy Centers says).  I won’t go into the idea of spin, which involves figuring out intent.  Mine is a caution for readers:

The post is lifted from a note from Daniel Becker in response to a query I sent to him…Dan is a small businessman in the way most of us think of as small business.  (The IRS has a different criterion  of ownership that allows a company like Bechtal at $31 billion to be considered a small business).

Dan Becker’s note:

The Washington Post article is   Obama calls for small business tax breaks.   The article uses the  Tax Policy Center original under the title Temporary Tax Relief to Create Jobs  as the source for the reporting.

The WP article notes:

“The last time the country had a similar proposal to the tax subsidy was during the Carter administration, according to the Tax Policy Center. Research by the Labor Department found that few firms knew about the tax policy, but those that did increased employment notably.”

But from their source it actually notes:

“The last experience the United States had with a credit for incremental employment was with the new jobs credit enacted at the beginning of the Carter Administration in 1977. Evaluations of that credit and how it came about found that most firms were either unaware of the credit or did not respond to it. Research based on a Department of Labor survey found that only 6 percent of firms who knew about the credit said that it prompted them to hire more workers. Firms that were aware of the credit, however, increased employment about 3 percent more than other firms. ”   (bolding is Dan B.’s)

WP had another smoothing over (under the fold):
 

“An incremental jobs credit could be a cost-effective way of raising employment in the short run, the nonpartisan center said in a report this year. The effectiveness of any jobs subsidy depends . . . on how employers perceive its potential benefits when making hiring decisions.”

The actual statement:

In summary, the effect of this proposal on employment is very uncertain. In theory, an incremental jobs credit could be a cost-effective way of raising employment in the short run and some research suggests that the 1977 credit did increase jobs, although the evidence on that is far from conclusive.
The effectiveness of any jobs subsidy depends greatly on both the details of the proposal, still to be finalized, and on how employers perceive its potential benefits when making hiring decisions.

Dan B

(Editorial comment at end of note from Dan Becker….Man! They still want to believe that cutting taxes is actually the same as if the 99% were now getting that $1 trillion of income that is now with the 1%. Just like they believe cutting taxes will increase revenues (sure if you convince the dictator to stop taking a full 90% of all that his people produce, but that’s not US).

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Cutting Corporate Rates May Cost Billions

Via Taxprof blog
Wall Street Journal: Tax Twist: At Some Firms, Cutting Corporate Rates May Cost Billions:

What Uncle Sam has given to the earnings of companies like Citigroup, AIG, and Ford he soon might take away.

President Barack Obama has said, most recently during last month’s presidential debates, that the 35% U.S. corporate tax rate should be cut. That would mean lower tax bills for many companies. But it also could prompt large write-downs by Citigroup, AIG, Ford and other companies that hold piles of “deferred tax assets,” or DTAs.
After posting big losses, these companies have tax credits and deductions they can use to defray future tax bills, thus providing a boost to earnings. But a tax-rate reduction means some of those credits and deductions, counted as assets on the balance sheet, would be worth less, since lower tax bills would mean fewer opportunities to use them before they expire. That would force the companies to write down their value, resulting in charges against earnings.


…the company believes tax change should “include transition measures that mitigate impacts and avoid negative unintended results” for companies that based their planning on the current tax system.

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Disappearing inconvenient data

Via Barry Rithotz at The Big Picture comes Bruce Bartlett’s take on
:

Bruce Bartlett and the dangers of Republican know-nothingism 

Bruce Bartlett goes off on some of the denialist behavior from the GOP. Bartlett writes: When a study doesn’t support their dogma, the GOP censors it: Nonpartisan Tax Report Withdrawn After G.O.P. Protest

Original study still available here: Taxes and the Economy: An Economic Analysis of the Top Tax Rates Since 1945 (PDF)

Bartlett discussed how Republicans destroyed much of Congress’s analytical ability when they took over in 1995: Gingrich and the Destruction of Congressional Expertise
He adds “This is part and parcel with poll denialism, global warming denialism, and the general right wing disdain for facts and reality.”

Note: Before making any kneejerk partisan reaction to this, note that Bartlett — Like Stockman and others — sre not trying to mske a pro-Democrat argument; rather, they are acknowledging a major societal concern when one of the 2 major political parties have foresaken science and reality and facts when they disagree with their agenda.

(Dan here…I am willing to bet this is a non-partisan issue to some extent and age old way of supporting agendas…but if data cannot be trusted to have a bit of independence, where does that leave us?)

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Tax Policy: You Can’t Handle the Truth

ProGrowthLiberal at Econospeak reminds us of a central tenet myth of this electoral campaign, and an example of political pressure on information sources:

Tax Policy: You Can’t Handle the Truth

Sahil Kapur reports on something that does not surprise me on two levels:

The author of a Congressional Research Service study, who found no evidence that tax cuts for high income earners lead to economic growth, is standing by his work, after the legislative branch’s nonpartisan research arm withdrew the report under pressure from Republican leaders. And Democratic principals are demanding to know why CRS caved to GOP pressure. CRS quietly and quickly pulled the six-week old report, despite the wishes of the research arm’s economic team, the New York Times reported Thursday … The study, which TPM and others reported on at the time, delved into the last 65 years of U.S. tax policy — specifically how marginal rates on high incomes and capital gains taxes impact decision-making. It concluded that reducing effective taxes on the rich does not generate economic growth, but that it does correlate with rising income inequality in the short term. The report’s conclusions aren’t terribly controversial in mainstream economics.

What Thomas Hungerford wrote has indeed been the consensus view among economists who are not prostituting themselves for Mitt Romney… (More at Econospeak)

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Fact check Ryan in the Debate

In the Vice Presidential debate Ryan said that the Kennedy tax cuts generated so much growth that tax receipts increased enough to offset the revenue losses.

When I look at the data it sure looks like this claim is another one of his Any Rand fantasies.  The economy did grow rapidly after the Kennedy tax cuts,  but the deficit remained high. throughout  the  JFK-LBJ administration.  Moreover, like Reagan, LBJ finally had to raise taxes to recover the lost revenues.

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Ok class, let’s review before the exam (election)

I’m sure you are all feeling kind of blah. You have this final exam for this session and I can tell by your performances on the quizzes that you are still confused. The problem solving portions of the quizzes have been very telling. So lets review.
 
You’re taxes are not too high. It’s your income that is too low! Remember this and you will be able to solve enough of the problems to obtain a passing grade and graduate. And class, no one running today for president gets this. It is why President Obama looked like such a dufus in the debate. Romney took a step to his left… right into Obama’s policy space. Where does one go to gain more space when they have walled up the door to the left of them as President Obama has?
 
Let’s get something real clear from the beginning. Unless you are acquiring the majority of your money from money YOU ARE NOT A CAPITALIST 
 
 
Second: A MARKET IS NOT AN ECONOMY.

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Which Spending Is Easier To Cut And By What Level Of Government?

by Professor Barkley Rosser

Reposted from Econospeak with permission from the author

Which Spending Is Easier To Cut And By What Level Of Government?

Back from his break, our former co-blogger, Dean Baker at Beat the Press, takes down WaPo ed page editor, Fred Hiatt, for his pushing yet again for cutting Social Security because it is supposedly “easy to do” in contrast to medical spending, with Hiatt pinning the blame on Dems for not supporting cutting either.  Baker notes that putting med costs in line with those in other countries would alone completely eliminate the federal budget deficit, and that Dems are not the ones opposing cuts to drug companies or “overpaid medical specialists.” CEPR   Hiatt barely nods at GOP opposition to tax increases and the possibility of cutting defense spending, even though the US is winding down some of its current active wars.
 
Dean kindly avoids noting that Hiatt is part of a group of established media mavens in Washington who long ago convinced themselves that somehow not only is Social Security “in crisis,” but that somehow it is the easiest program to cut (future) spending on politically, although that will do nearly nothing to limit near-term deficits and that there is nearly zero support among the public of both parties for such an action, and that efforts by various politicians of both parties in recent years to do this have ended up as embarrassing failures.  But this gang does not give up easily, including Hiatt, back at it yet again.


Unfortunately, the alternative appears to be a trick buried in Paul Ryan’s budget proposal: send certain social safety net programs down to the states, with the leading candidate being Medicaid, which is already partly funded by the states.  As much as any program, this is one that should be solely funded by the feds as that would help even the playing field across states, given that the states that need it the most are the states with the most poor people and thus least able to support their poor people.  But no, Ryan thinks that Medicaid should be sent fully to the states, and some movement in this direction has already happened.
 
This hypocritical trend of Grover Norquist “no higher taxes” politicians sending important programs to lower levels of government so they can claim “savings” without tax increases is going on more widely, also reflecting Norquist’s influence at even state levels.  So, in Virginia where I live, this most recent legislature, newly run fully by the GOP with our GOP governor, has in an effort to balance the state budget without raising taxes or appearing to cut programs, sent an unfunded mandate to the local governments, removing the funding but requiring that they contribute more to teacher pension funds.
 
This has led to a fairly astounding result, although the mayor or Harrisonburg, where I live, tells me that a lot of these legislators somehow convinced themselves it would not happen.  Nearly every local government in the state, including the vast majority of ones run by Republicans, has raised local taxes, mostly property taxes, but also others as well.  They have been cutting and cutting their budgets for the last several years, something manifesting itself nationally in the steady stream of layoffs at both state and local government levels.  The expectations by citizens for continuing to have basic local public services of some sort simply overrode this idiocy of no new taxes in the face of this unfunded mandate from the state, which in turn at least partly reflects the ongoing rise of Medicaid costs, exacerbated by the feds pushing even more of those down to the states.
 
As it is, here in Harrisonburg, property taxes are going up, along with a small increase in the rate on restaurant meals.  The alternative to the meals tax rise (much opposed by local restauranteurs) was to raise personal property taxes.  Around the state, different combinations of such increases have been implemented, and it will be interesting to see whether local voters punish their leaders for doing this or will figure it out that they have been pushed to this by the irresponsibility of state politicians.  This problem may well be worse for local Republican leaders than for Dems, given that in general the latter have not hobbled themselves so tightly with all these inane pledges about taxes, although so far, Grover Norquist has not gotten down to the local level guys with making them sign pledges and holding them publicly to them.  There are just too many of them for him to keep track of all of them.
Posted by Barkley Rosser at 12:40 AM

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