Archive for the ‘Republican Party’ category

When Logic Fails

December 11, 2017

The Republican designed and President Trump supported “tax reform” is poised to become law. Only a few more horse trades remain before a mockery of fairness and consistency with past positions is presented to the American people, a big beautiful Christmas gift as President Trump has pontificated. The lipstick on this pig can’t mask the mind baffling contradictions from Republican policy and think tank positions.

Tax reform involves elimination of loopholes, exemptions, and other special interest sponsored deductions followed by a readjustment of the prevailing tax rates. Among the loopholes, exemptions, and deductions are those included to specifically encourage certain parts of the economy, or reward certain persons or industries normally for loyal support.

For example, the home mortgage deduction is intended to stimulate home ownership and incidentally benefits the building industry. Other loopholes, exemptions, or deductions are clearly targeted at key donors, for example, in the oil and gas exploration community.

Where has logic failed?

  • The US economy is already one of the strongest in the world. Why is there a need to stimulate?
  • The corporate tax rate is 35% and is the highest among similar modern countries. The effective tax rate (that is what corporations actually pay) is only 18%. This reflects the 35% minus all the loopholes, exemptions, and deductions. The 18% effective rate put the US right in the middle of other like countries. Why the need for corporate tax reform?
  • Our country already has a yearly budget deficit and a total debt of $20 trillion. The President and Congressional Republicans claim this “tax reform” which will cost itself $1.5 trillion, will so stimulate the economy that everyone wins.
  • Republicans claim economic growth alone will cover the $1.5 trillion and in the process will create more higher paying jobs. Despite two previous attempts (George W Bush and Ronald Reagan’s Administrations) where taxes were cut and corporations kept the windfall profits, Americans are asked to believe this time will be different. Hmmm.
  • The height of chutzpah falls to the GOP’s billing of this tax reform as a “middle class” tax cut. Under the questionable claim of middle class tax cut, the very wealthy and pass through business owners will reap the greatest amount of the $1.5 trillion in cuts.

As details are being ferreted out, mortgage interest and State/local taxes deductions will make the tax reduction less helpful to the middle class. Changes in how university endowments are treated will hurt many Universities financially and are likely to make higher education more difficult (read expensive) for the middle class to obtain.

President Trump has been in office 11 months and on every single claim he has made or policy action he has issued by executive order, there is overwhelming evidence that the President’s words are not supported by logic or fact.  A logical person must assume the President’s words are wrong again.

The Republican controlled Congress, on this issue, is equally and shamefully wrong. Following the money, one can explain the Republican Congress members’ action by who is buying the Republican Congressional members’ loyalty, for example the Kochs, the Mercers, and Sheldon Adelson.

The notion that America’s tax code should undergo a tax reform is not illogical or unnecessary. Tax reform targeted, however, for the wealthy and corporations is a dead end proposition for everyone else, and clearly destined to not deliver on its promises.

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Next Stop, Social Democracy?

December 5, 2017

These past 11 months have witnessed war against Government regulations, a skewed (towards the wealthy) tax reform, and the wanton disregard for healthcare and the environment.  Thanks Mr. President.  To be fair, this is not just a President Trump issue, rather it is the true face of the current Republican Party.

And, more than any other factor, these past 11 months have demonstrated the maturation of years of focused work directed by ultra conservative groups under the Koch Brothers’ flag.

The Koch’s and most of their zealous followers see the world largely from a libertarian perspective. In their minds this means much less government, far fewer regulations, much less government services, and consequently much lower taxes. The Koch’s legions act as a model for others to see what hard work and drive can produce.

Tax reform now rests in a joint Congressional committee charged with reconciling the House and Senate’s tax reform versions into one bill both Houses can accept. Barring a miraculous reenactment of Dickens’ “Christmas Carol”, Americans can look forward to more income inequality as a Christmas present.

In other Trump administrative action, curbs on Big Banks will be slackened, hints companies may not need to provide their employees healthcare, and  “Medicare, Medicaid, and Social Security” will be tossed to the “private” sector severing any connection to the Government or its promises.

For the Koch-type people, panacea could not look better. Hmmm.

One can imagine two outcomes given current choices Republicans are making.

  1. A total breakdown in America’s social contract. The majority of Americans will lose faith in Government and jump to the belief that paying taxes, following laws, or supporting the Country as a whole are no longer a duty since their Government no longer looks out for them.
  2. A strong electorate reaction which in turn elects a government with the mandate to secure access to affordable healthcare, retirement assistance (social security, Medicare, and pension guarantees), and a kind/caring safety net collection of services, (after all America is the wealthiest country in the world).

With respect to these two options, option #1 should increase gun sales and return America to a period more similar to pre-revolutionary times. With option #2, America will be seamlessly connected to the global economy and viewed by others as the latest, intelligent “Social Democracy”. Hmmm.

Governance Gone

December 3, 2017

With the Senate passage of the GOP tax reform bill Saturday evening/Sunday morning, any semblance of a political party worthy to hold the reins of government vanished. The current Republican crowd in control of both houses of Congress resembles more a mob than a deliberative body. What is even worse is that the Republican majority clearly do not care what others think or who may be severely disadvantaged by tax reform.

Was this rough shod action new to the Senate?

Not long ago, Republicans were closing in on “repeal and replace” legislation which would impact 1/3rd of our national economy and could take away coverage for our most at risk Americans.

  • Were there any hearings?
  • Were their any requests for public comments?
  • Were there any efforts made by Congress to educate the public ahead of time on what changes were actually in the bill?

The answer to all these questions was no.

The tax reform bill’s passage was even worse.

  • Bill preparation is private,
  • Sloganeering replacing printed copies of the proposed legislation,
  • Horse trading (often just promises and not changes in the law) to get 50 vote Republican majority,
  • The final copy of the 500 page bill issued two hours prior to the actually Senate vote

These reckless behaviors demonstrated absolute “zero” Republican interest in governance and 100% recognition of what they owed the moneyed interests who bankrolled their individual campaigns.

When Americans go to the polls, most think they are exercising their Constitutional right (and duty) to select those who will run the Government in a way that recognizes (and balances) all Americans’ best interest. On December 2, 2017, Americans learned that

  • the Republican majority in Congress has no interest in all Americans,
  • no interest in a transparent and interactive process,
  • and a thorough willingness to do what ever is necessary to meet the needs of their wealthy campaign donors.

The Art Of Distraction

November 30, 2017

Today could be the day that Republicans pass their “massive” tax reform. A reform, that by any other name, would be just an old fashion tax cut and give away. A give away, not to all but to the Republican friends who have bank rolled so many of the elected officials. Why isn’t this done deal since Republicans control both Houses of Congress and the Presidency as well?

There are ideological reasons. For example, the fiscal hawks are really between a rock and hard place since this “tax reform” will send probably $1.5 trillion or more to the already $20 trillion Federal Debt. Archival TV footage will show these same Senators and Representatives who vote for this tax bill, full throatily denouncing government spending because (sob, sob), “we are leaving our mess for future generations to deal with”. Never the less, ideology only goes so far, especially when there are millions involved in campaign donations.

Other ideologues want to ensure the right type of corporations get the right amount of tax cuts. Large, globally competing corporations have a different sense of what a globally competitive tax code might look like than a group of doctors, lawyers, or small town manufacturers would. Of course there is nothing in the “tax reform” legislation that requires corporations to reinvest these windfall profits, or to hire more workers, or to increase the pay of anyone. If you believe the free market will produce these wondrous results I have a bridge you might be interested in too.

The overall process the GOP has employed could be described as obfuscate and distract.

The creation of the specific House and Senate versions has been done in secret, without public hearings, and with no solicitation of public ideas. In addition the bill drafting process has been done hastily to minimize any time to discover the full ramifications and even less time to inform Americans of who gets what and who loses what.

For example, today it was reported that the House bill would classify student grants such as that received in scholarships for graduate work, as income and fully taxable at the total estimated value of a graduate program. The result would be that students might become responsible for paying taxes as if they were earning $80,000 a year when in fact they earn far, far less if anything. It would appear that Republicans do not think anyone other than the already wealthy should have access to higher education. Hmmm.

The more clever and sinister part of the obfuscation and distraction strategy goes to the hands of the President. President Trump may be the modern master of distraction, either by intent or by sheer incompetence. The President has opened one issue after another (such as defense of Judge Roy Moore, attacks on the New York Times and Washington Post, and retweets of racist and hateful British tweets dignifying what others have refuted with the Presidential stamp. The impact is when the news media chooses to cover this outrageous behavior, by default the media dilutes the time/space for fuller coverage of the tax reform debate.

Pundits predict that the Senate vote is still too close to call and the votes may not be there. On the other hand, any Republicans not voting for this tax bill can expect a far right challenge in their next election.

It might take a lot of courage for some GOP members to vote no on this bill. but Ironically, I wonder whether Republicans realize the tidal wave of anger which will come next year, should the bill be passed, and Republicans are forced to reduce farm subsidies, Medicare and Medicaid, and Social Security to stop the Federal Debt hemorrhaging?

Political “No Win” ?

November 27, 2017

Republicans are in the home stretch. This month they could pass the largest tax reform (actually tax cuts) in at least 30 years. And paying less in taxes is what most everyone wants. Right?

Yes but but chances are high that the Republican tax cuts represent a “political no win”

Republicans in Congress are poised to begin thumping their chests once the bill passes. Republicans sense a double victory coming their way.

  • First,  the tax cuts themselves will represent a victory. The Koch brothers, the Mercers, and dozens of other really rich supporters will be pleased with Congressional GOP (read more money in the future). Everyday Americans will gladly accept the scraps that fall off the tax cut table too. Does it get much better?
  • Yes it does. The second reason for GOP’s glee is that Congress will have to cut government spending in order to keep the deficit from exploding. And cutting the deficit means paring back massively entitlements.

You can see it now. Statesmanly Republican leaders worriedly calling for spending reduction action or otherwise out grandchildren’s children will inherit massive debt and an America bankrupted by Medicare, Medicaid, and Social Security. Can you imagine those wrinkled foreheads?

One must wonder, however, whether Republicans see the trap hidden amongst the tax cut changes?

The proposed Republican tax cuts can only be described as an unforced error. The American economy is strong and expanding. There is need for a government stimulus program and a good deal to worry about if the economy overheats.

On top of that, the promise of a huge boost in GDP growth is nothing short of a pipe dream. Only members of the flat earth society could seriously accept the notion that America’s economy could consistently outstrip the two dozen or so modern industrial nations.

The US economy, of course, can be stimulated to grow faster but what makes anyone think that faster growing economy would not contract after a short period of high growth? Add to that the risk of igniting inflation and higher interest rates (read a slowing force on the economy) amplifying a decrease in demand because most Americans have not seen real increases in the income.

Passage of a tax cut bill is not assured but should it happen, and should Republicans press forward with an assault on entitlements, “open season” at the polls will almost certainly follow.

Most Americans, strangely, do not pay federal income taxes anyways. They make to little. So they do not need any of the GOP tax cuts but are far more likely to feel the impact of cuts to Medicaid, Medicare, and Social Security.

The proverbial “middle class” will soon realize they too have not received anything when they get an opportunity to pay higher federal income taxes since deductions for State and local taxes as well as mortgage interest will be pared back.

And the probability of higher wages being the fruit falling from the tax cut tree is de minimis.

In 2018 and again in 2020, Republican candidates should have no shortage of campaign donations. In a relatively evenly divided electorate given 2016 election, it won’t take much to tip the Republican to Democrat Congressional ratio and put Democrats back in control of one or both houses. Such an outcome would be poetic justice for Democrats and could signal an end to Trump’s agenda (whatever that is).

What Is Reform?

November 20, 2017

Candidate Donald Trump and the GOP in general campaigned on the pledge to overhaul the Federal Tax Code and “reform it”. Hmmm.

Both the House and the Senate have unveiled their visions of tax reform and for the clear eyed, one should not be surprised with the comment, “what tax reform”? Tax cut, maybe, but reform, hardly.

What’s the problem?

  1. Republicans were never concerned with “reform”, rather it was tax cuts that drove this campaign pledge.

  2. Republicans had already mortgaged their collective souls to the super rich (like Charles and David Koch, and Robert Mercer), so cuts favorable to the super wealthy were a done deal.

  3. Small business owners who have predominantly voted Republican were next in line. These “pass through” tax payers needed a lower corporate tax rate so they would not have to pay the appropriate individual income tax rate.

  4. Big corporations were interested in more government welfare but were more concerned about not losing their current “effective” tax rate (18%).

  5. The Middle Class were asking “what’s in it for me” and both Congressional Houses presented plans which were murky to say the least. Against Trump boasts, “biggest Middle Class tax cut ever”, the Middle Class has been hard pressed to see anything in it for them.

  6. The Senate, not content with a weak tax cut offering, included a provision to repeal the “individual mandate” of Obamacare which has only served to make voters more suspicious of the tax reform bill’s real intent.

OK, what’s the real problems?

  1. Tax code reform has never been the real intent of Republicans. GOP focus has been on rewarding their supporters.

  2. Tax code reform is extremely complicated and impacts all aspects of our $13 trillion economy.

  3. The underlying threat to the US economy lies in income inequality, per capita healthcare costs, and funding for so-called entitlement programs. Republicans do not care about income inequality, are agnostic about healthcare costs, and want to sharply reduce if not eliminate entitlements (read – Medicare, Medicaid, and Social Security).

  4. Rather than debate tax reform in the open and attempt to reach a bi-partisan compromise, the GOP has chosen to implement rules which would allow the GOP to pass “tax reform” with the current Republican majorities. What policy changes within the compromised GOP could carry the day?

  5. The path Republicans have selected makes a joke of their past chest pounding anxious cries over the Federal Debt. The Senate and House proposals will add $1-1.5 trillion (at a minimum) to the Federal Debt and could add much more.

  6. The notion that corporations will take tax savings and use that money to invest and add jobs is totally laughable. Even more laughable is that corporations will use the extra savings to increase workers wages and benefits. This dog won’t hunt.

  7. The GOP plans come from “supply side” economic theory which in the two recent previous times the US has tried it (Ronald Reagan and George W Bush) has not performed as advertised. If the GOP really was looking to spend $1.5 trillion to stimulate the economy, a coordinated infrastructure government spending program would have far greater chances of increasing GDP, raising employment, and increasing wages.

  8. At the very base of the GOP house of lies (bad assumptions or beliefs), is that on a world basis, the US economy is doing quite well. Thinking that somehow the rest of the world could grow GDP at an average 2% and the US, magically, could grow at 4-6% is worse than drawing to an inside straight. These are different times than the post WWII period and long term growth must by the nature of things grow more modestly if it is to grow at all. The US needs to focus on how, as a nation, the country can grow productivity, make products and services others want, and share these earnings more fairly with other Americans.

Americans, especially voters must come to see that the current GOP leadership views tax reforms as tax cuts, and tax cuts mean “free lunches” and “free lunches don’t exist.

Wrong Side Of History

November 15, 2017

It is difficult to imagine an Administration which has gotten so many obvious situations incorrectly. President Trump and those he has appointed to various Cabinet posts appear set on choosing the positions both factually wrong and on the wrong side of history. But for a “showman”, there is only the showman’s position that counts.

The President has spent the past week in Asia presumably charting a new trade path (remember that the US has walked away from the Trans Pacific Pact). The President has announced his demand for bilateral negotiations, in other words, US-Japan, South Korea-US, Vietnam-US, etc, and with the pre-condition that any trade must be fair and reciprocal. Sounds good but is it wise?

With 2.5-3 billion consumers between India and China, the Southeast Asian area has many more customers than what 300 million Americans would represent. And China is just as happy filling these consumers’ needs.  Who cares about the US anyway?

So, let’s look at South Korea. US-South Korea trade is unbalanced in favor of South Korea. Doesn’t the President have a point that South Korea should be importing more US TVs and automobiles, say in line with what the US imports from South Korea?

One would think reciprocal trade is a worthy goal.  But we can’t expect another country to buy goods and services which are more expensive than what that country can offer.  Trade policies, however, must contemplate other ramifications.  US recognized long ago that stable allies represented an important part of our defenses against communist and non-democratic opponents. Stable nations at the very minimum are marked by full or rising employment and a growing GDP. Accordingly, in trade discussions in the past, the US has insisted upon “market access” and respect of “intellectual property”, not just parity of trade.  US policy reasoned that if goods and services were cost competitive, than they would have a chance to compete.

In practice trade around the world (including the US) always has a political component. Farmers, steel and auto workers, and general manufacturers are voters too. If a government is callous to which imports these groups believe are taking their jobs, that government will fall. So, trade policy can never be an exact science but must reflect more complex thinking around all the issues influencing a country’s national interest. Hmmm.

It would be short sighted to jump to the conclusion that President Trump and his advisors are simply incompetent. Rather, one should consider that the President is attempting to serve the needs of a different and narrower constituency, namely the wealthy and owners of businesses which could benefit from Trump’s thumb on the scales of fairness.

Just as in most other countries, the promise of jobs is the strongest vote getter. Now add to that jobs rhetoric, other words to distract from science and logic, and suddenly the way is clear for special interests to be preferentially served.

What is even more astonishing is that rank and file Republicans who have been traditionally hard core “free traders” and “pragmatic (laissez-faire) marketeers” are standing on the sidelines. When the President spouts off about putting coal miners back to work in the mines, no one from his party stands up and says, “Mr President, you are making a mistake, you are leading in the wrong direction”.

Consequently, the entire Republican Party is complicit in President Trump’s foreign or domestic policies. Regardless of whether it is healthcare, tax reform, immigration, or trade, President Trump is marching on the wrong side of history and the rest of the Republican Party is waddling right after him.