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The Great American Tax Heist Turns One

By jazz_music follow jazz_music   2019 Jan 6, 8:40pm 1,364 views   28 comments   watch   nsfw   quote   share    


BERKELEY – It has now been one year since US President Donald Trump and his fellow Republicans rammed their massive corporate tax cut through Congress. At the time, critics of the “Tax Cuts and Jobs Act” described it as a cynical handout for wealthy shareholders. But a substantial number of economists came out in support of it.

For example, one prominent group, most of whom served in previous Republican administrations, predicted in The Wall Street Journal that the tax cuts would boost long-run GDP by 3-4%, with an “associated increase” of about 0.4% “in the annual rate of GDP growth” over the next decade. And in an open letter to Congress, a coterie of over 100 economists asserted that “the macroeconomic feedback generated by the [tax cuts]” would be “more than enough to compensate for the static revenue loss,” implying that the bill would be deficit-neutral over time.

Likewise, in a commentary for Project Syndicate, Robert J. Barro of Harvard University argued that the tax cuts would increase long-run real (inflation-adjusted) per capita GDP by an improbable 7%. And Michael J. Boskin of the Hoover Institution endorsed his analysis in a follow-up commentary.

Finally, Kevin Hassett, Chairman of the White House Council of Economic Advisers, and Greg Mankiw of Harvard University claimed that the productivity gains stemming from the tax package would primarily boost wages, rather than profits, because foreign savers would pour investment into the US.

To be sure, these were primarily long-run predictions. But proponents of the bill nonetheless claimed that we would see enough additional investment to boost growth by 0.4% per year. That implies an increase in annual investment of roughly $800 billion – that is, an increase from 17.5% to about 21.5% of GDP. We cannot know how much the US economy would grow in the absence of the tax cuts. But, as the chart below shows, investment has not jumped to that level, nor does it show signs of doing so anytime soon.

This comes as no surprise. Back when all the aforementioned economists were issuing their sanguine predictions about the tax package’s likely effects, neutral scorekeepers such as the Tax Policy Center were painting a more realistic picture. And unlike most proponents of the cuts, the Tax Policy Center’s raison d’être is not to please donors or support a particular political party, but rather to make the best forecasts that it can.

The deep disagreement last year over the tax bill’s potential effects anguished Binyamin Applebaum of The New York Times. “What does it mean to produce the signatures of 100 economists in favor of a given proposition when another 100 will sign their names to the opposite statement?” Applebaum asked on Twitter at the time. “How does Harvard, for example, justify granting tenure to people who purport to work in the same discipline and publicly condemn each other as charlatans? How are ordinary people, let alone members of Congress, supposed to figure out which tenured professors are the serious economists?”

We can now answer that last question. Scholarship is about the pursuit of truth. When scholars find that they have gotten something wrong, they ask themselves why, in order to improve their methodology and possibly get it less wrong in the future. The economists who predicted that tax cuts would spur a rapid increase in investment and sustained growth have now been proven wrong. If they were serious academics committed to their discipline, they would take this as a sign that they have something to learn. Sadly, they have not. They have remained silent, which suggests that they are not surprised to see investment fall far short of what they promised.

But why should they be surprised? After all, it would be specious to assume, as their models do, that investment can rapidly rise (or fall) as foreign investors flood into (or flee) the US. Individuals and firms do not suddenly ratchet up their savings just because the after-tax profit rate has increased. While a higher profit rate does make saving more profitable, it also increases the income from one’s past savings, thus reducing the need to save. Generally speaking, the two balance out.

All of those who published op-eds and released studies supporting the corporate tax cuts last year knew (or should have known) this to begin with. That is why they have not bothered to investigate their flawed forecasts to determine what they may have missed. It is as if they knew all along that their predictions were wrong.

For reporters still wondering which economists to listen to, the answer should now be clear. If there is one message to take from the past year, it is: “Fool me once, shame on you; fool me twice, shame on me.”

https://www.project-syndicate.org/commentary/conservative-economists-tax-cut-forecasts-by-j--bradford-delong-2018-12
1   Iranian_Oil_Burse   ignore (6)   2019 Jan 6, 8:44pm     ↓ dislike (0)   quote   flag        

jazz_music says
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Fuck no!
2   jazz_music   ignore (12)   2019 Jan 6, 8:59pm     ↓ dislike (0)   quote   flag        

DASKAA says
Fuck no!

I took those side ads out of the article. Shit happens when you grab text from another source.

I added the link

Also added the graph.

Perhaps Breitbart is more your speed.
3   Strategist   ignore (2)   2019 Jan 6, 9:52pm     ↓ dislike (0)   quote   flag        

jazz_music says
For reporters still wondering which economists to listen to, the answer should now be clear. If there is one message to take from the past year, it is: “Fool me once, shame on you; fool me twice, shame on me.”


I agree. Shame on you Jazz.
4   jazz_music   ignore (12)   2019 Jan 7, 9:54am     ↓ dislike (0)   quote   flag        

We have all these unofficial debts that are massive compared to the official debt. We’re focused just on the official debt, so we’re trying to balance the wrong books…

If you add up all the promises that have been made for spending obligations, including defense expenditures, and you subtract all the taxes that we expect to collect, the difference is $210 trillion. That’s the fiscal gap.

May as well shut the government down OVER THE DEBT, the Republicans would do it if Trump was a Democrat for sure.
5   HEYYOU   ignore (34)   2019 Jan 7, 11:22am     ↓ dislike (0)   quote   flag        

Once a fool, always a fool?
6   Quigley   ignore (2)   2019 Jan 7, 11:22am     ↓ dislike (1)   quote   flag        

Really? You make a post about the 2017 tax cut and then show a graph as “proof” that only goes to 2015?!!
7   Tenpoundbass   ignore (15)   2019 Jan 7, 2:47pm     ↓ dislike (1)   quote   flag        

Yes Trump stole my tax dollars from the free loading skinflint Liberals that want to take my money. Create $178K a year jobs, for people who hate America, Me and want devide and conquer America and replace us with inferior disease riddled 3rd world headchoppers.

Robbed I say! Robbed them of it, and gave it back to me, That incredibly nice Bastard. The Son of a Bitch had no right to do such a great thing for America. Who in the Fuck does he think he is, the President or something?

Robbed!
8   Strategist   ignore (2)   2019 Jan 7, 4:33pm     ↓ dislike (0)   quote   flag        

Tenpoundbass says
Robbed I say! Robbed them of it, and gave it back to me, That incredibly nice Bastard. The Son of a Bitch had no right to do such a great thing for America. Who in the Fuck does he think he is, the President or something?

Robbed!


I want my money back from the useless Welfare Queens who refuse to work. I did not work hard so they could stuff their mouth with ding dongs while vegetating on a sofa watching Oprah.
9   ThreeBays   ignore (0)   2019 Jan 7, 6:02pm     ↓ dislike (0)   quote   flag        

Quigley says
Really? You make a post about the 2017 tax cut and then show a graph as “proof” that only goes to 2015?!!


Did you fail your graph reading grade then?

Hint: The graph extends the 2015 mark, about 4 years.
10   jazz_music   ignore (12)   2019 Jan 7, 8:57pm     ↓ dislike (0)   quote   flag        

ThreeBays says
The graph extends the 2015 mark, about 4 years.

That's right
11   FortWayneIndiana   ignore (4)   2019 Jan 8, 6:33am     ↓ dislike (1)   quote   flag        

His tax cuts improved economy. Love it.

Left just wants to tax us all, so they could take from us. And I disagree with these crooked and rotten leftist faggots.
12   MrMagic   ignore (11)   2019 Jan 8, 9:06am     ↓ dislike (0)   quote   flag        

jazz_music says
But a substantial number of economists came out in support of it.


Yes, the smart ones that aren't Democrats and know how to use a calculator.

FortWayneIndiana says
His tax cuts improved economy


This is true:

13   Strategist   ignore (2)   2019 Jan 8, 9:18am     ↓ dislike (0)   quote   flag        

MrMagic says


Most people, including the poor benefit with the tax cuts. So why are the socialists whining like hell?
14   6rdB   ignore (0)   2019 Jan 8, 9:26am     ↓ dislike (0)   quote   flag        

jazz_music says
May as well shut the government down OVER THE DEBT

A fantastic idea by the way. Shut govt down and do not pay any gov't agencies (as in no salary/benefits/fund disbursments for shutdown time, not just furlough with later pay) until D's and R's come up with a balanced budget and debt repayment scheme. Otherwise it seems that politicians and many of their voters live in land of unicorns crapping skittles, where "debts do not matter" or matter only if president of the other party is in power.
Tax cuts are very good, but should occur only after budget is balanced.
15   jazz_music   ignore (12)   2019 Jan 8, 12:48pm     ↓ dislike (0)   quote   flag        

Skittles are fuckin' good! ;-)
16   ThreeBays   ignore (0)   2019 Jan 8, 1:06pm     ↓ dislike (0)   quote   flag        

Strategist says
Most people, including the poor benefit with the tax cuts. So why are the socialists whining like hell?


The poor benefited by $10 a year, yay!

The deficit funded tax cut is a lot like using your HELOC as a cash machine. You get the benefit of more money now, but owe it back plus interest.
17   MrMagic   ignore (11)   2019 Jan 8, 1:21pm     ↓ dislike (0)   quote   flag        

ThreeBays says
The poor benefited by $10 a year, yay!


The poor don't make any money and don't pay any taxes. Just how much should they be getting in tax savings, when they pay ZERO now?

More Socialism, where the government writes them a check?
18   ThreeBays   ignore (0)   2019 Jan 8, 6:14pm     ↓ dislike (0)   quote   flag        

MrMagic says
ThreeBays says
The poor benefited by $10 a year, yay!


The poor don't make any money and don't pay any taxes. Just how much should they be getting in tax savings, when they pay ZERO now?

More Socialism, where the government writes them a check?


No, I don't think they should get anything. The comment was in reply to the point that even the poor got a benefit from the tax cut.

It should be well understood that the GOP tax cut was highly regressive.

19   MrMagic   ignore (11)   2019 Jan 8, 6:29pm     ↓ dislike (0)   quote   flag        

ThreeBays says
It should be well understood that the GOP tax cut was highly regressive.



Just more bullshit.

Of course the people paying MORE taxes will get MORE benefit. That's a big Duh... They also pay the biggest chunk of the bills in the country. The fact is 88% of the nation's bills are paid by the upper 20% of the population. Why shouldn't these people be able to keep more of THEIR money with a tax break.

Once again, should we give the people paying NO tax a bigger tax benefit.

Only a friken Socialist wants to take MORE money from the people who are already paying the bills.
20   ThreeBays   ignore (0)   2019 Jan 8, 6:41pm     ↓ dislike (0)   quote   flag        

MrMagic says
Of course the people paying MORE taxes will get MORE benefit. That's a big Duh... They also pay the biggest chunk of the bills in the country. The fact is 88% of the nation's bills are paid by the upper 20% of the population. Why shouldn't these people be able to keep more of THEIR money with a tax break.


Note, it's not just more in terms of dollars which is normal since they are earning more; the higher earners had more benefit as a %-age. That's the definition of a regressive tax change. Calling it bullshit is just another example of you not even understanding English well enough to argue.

You are saying the rich should keep more of their money than the middle and lower income earners, so why do rep/cons refuse say it's a tax break mostly benefiting the rich?
21   Strategist   ignore (2)   2019 Jan 8, 6:53pm     ↓ dislike (0)   quote   flag        

d6rB says
jazz_music says
May as well shut the government down OVER THE DEBT

A fantastic idea by the way. Shut govt down and do not pay any gov't agencies


What about my welfare check?
22   Strategist   ignore (2)   2019 Jan 8, 7:02pm     ↓ dislike (0)   quote   flag        

ThreeBays says
Strategist says
Most people, including the poor benefit with the tax cuts. So why are the socialists whining like hell?


The poor benefited by $10 a year, yay!

That's a lot of Bud Light's.

ThreeBays says
The deficit funded tax cut is a lot like using your HELOC as a cash machine. You get the benefit of more money now, but owe it back plus interest.

The previous generation simply passed it down to us. We can do the same.
I would admit we are much better off without any debt, but the governments are like people, where if you want toys and don't have the cash, just borrow. As long as you can make the payments you will be fine. Imagine how Joe Six Pack would be able to buy a house without a mortgage.
The growing US economy can afford those payments.
23   Strategist   ignore (2)   2019 Jan 8, 7:07pm     ↓ dislike (0)   quote   flag        

ThreeBays says
It should be well understood that the GOP tax cut was highly regressive.


If tax increases are progressive, tax cuts would naturally be regressive. However, when you eliminate a past tax increase, is the final result progressive or regressive?
Hint....It's neutral.
24   Strategist   ignore (2)   2019 Jan 8, 7:11pm     ↓ dislike (0)   quote   flag        

MrMagic says
Once again, should we give the people paying NO tax a bigger tax benefit.


Yes. It's called a bigger welfare check, and I want it now. Else, i'm joining Jazz to become a Commie Jihadi.
25   MrMagic   ignore (11)   2019 Jan 8, 7:26pm     ↓ dislike (0)   quote   flag        

ThreeBays says
Note, it's not just more in terms of dollars which is normal since they are earning more; the higher earners had more benefit as a %-age. That's the definition of a regressive tax change. Calling it bullshit is just another example of you not even understanding English well enough to argue.


Ahhh, just how I expected you to respond, the typical Liberal response using "percentages".

Tell me, what pays the actual bills, percentages or dollars? Do you send percentages to pay your credit card bill each month, or do you send dollars? How many DOLLARS do the upper 20% pay/send to the IRS every year?


ThreeBays says
You are saying the rich should keep more of their money than the middle and lower income earners, so why do rep/cons refuse say it's a tax break mostly benefiting the rich?


Lower income earners keep ALL of their tax money NOW, they don't pay ANY tax (that's like over 40% of the population). How much more should they be able to keep?

...."Many Americans won't owe the government a dime today. More than four in 10 American households (44.3%) -- or upwards of 76 million -- didn't pay any income tax to the federal government last year, according to data for 2016 from the Tax Policy Center."
https://www.marketwatch.com/story/44-of-americans-wont-pay-any-federal-income-tax-2017-04-17

Liberal Logic.... amazing stuff!!
26   ThreeBays   ignore (0)   2019 Jan 8, 8:55pm     ↓ dislike (0)   quote   flag        

Strategist says
If tax increases are progressive, tax cuts would naturally be regressive. However, when you eliminate a past tax increase, is the final result progressive or regressive?
Hint....It's neutral.


This guy is smart, if not yet rich.

MrMagic says
Ahhh, just how I expected you to respond, the typical Liberal response using "percentages".


Ahh, allergic to logic and reason. There's a reason average rep/cons have an image as not the sharpest knives in the drawer.
27   MrMagic   ignore (11)   2019 Jan 8, 9:29pm     ↓ dislike (0)   quote   flag        

ThreeBays says
logic and reason.


You didn't answer my question. Do you pay with "percentages" or "dollars" when you buy food at the grocery store?

Also, what extra "percentage" tax credit should that 44% of the population receive?
28   ThreeBays   ignore (0)   2019 Jan 8, 10:36pm     ↓ dislike (0)   quote   flag        

MrMagic says
You didn't answer my question. Do you pay with "percentages" or "dollars" when you buy food at the grocery store?

Also, what extra "percentage" tax credit should that 44% of the population receive?


We pay in Dollars, but this is an irrelevant strawman.

If the GOP presented two tax plans, one that said we give everybody a $4000 tax cut, the other that said we give everybody a 3% cut - the rich would clearly prefer the %-age and not the Dollar amount. The fact that you buy milk in Dollars has nothing to do with it.

Ohh, and I'm not talking about those who pay 0 taxes. 100% of 0 is still 0. The graph I referenced shows the gap even for income earners at the 75% and 90%-iles, those earning between between $110k and $180k, that clearly do pay significant amounts of taxes. They got less of a cut than those in higher brackets.

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