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The Trump Tax Cut: Even Worse Than Youve Heard

The Trump Tax Cut: Even Worse Than You’ve Heard

Skeptical reporting has still been too favorable.
Paul Krugman

By Paul Krugman

Opinion Columnist

Jan. 1, 2019

The 2017 tax cut has received pretty bad press, and rightly so. Its proponents made big promises about soaring investment and wages, and also assured everyone that it would pay for itself; none of that has happened.

Yet coverage actually hasn’t been negative enough. The story you mostly read runs something like this: The tax cut has caused corporations to bring some money home, but they’ve used it for stock buybacks rather than to raise wages, and the boost to growth has been modest. That doesn’t sound great, but it’s still better than the reality: No money has, in fact, been brought home, and the tax cut has probably reduced national income. Indeed, at least 90 percent of Americans will end up poorer thanks to that cut.

Let me explain each point in turn.

First, when people say that U.S. corporations have “brought money home” they’re referring to dividends overseas subsidiaries have paid to their parent corporations. These did indeed surge briefly in 2018, as the tax law made it advantageous to transfer some assets from the books of those subsidiaries to the home companies; these transactions also showed up as a reduction in the measured stake of the parents in the subsidiaries, i.e., as negative direct investment (Figure 1).

Figure 1CreditBureau of Economic Analysis

But these transactions are simply rearrangements of companies’ books for tax purposes; they don’t necessarily correspond to anything real. Suppose that Multinational Megacorp USA decides to have its subsidiary, Multinational Mega Ireland, transfer some assets to the home company. This will produce the kind of simultaneous and opposite movement in dividends and direct investment you see in Figure 1. But the company’s overall balance sheet – which always included the assets of MM Ireland – hasn’t changed at all. No real resources have been transferred; MM USA has neither gained nor lost the ability to invest here.

If you want to know whether investable funds are really being transferred to the U.S., you need to look at the overall balance on financial account – or, what should be the same (and is more accurately measured), the inverse of the balance on current account. Figure 2 shows that balance as a share of GDP – and as you can see, basically nothing has happened.


Figure 2CreditBureau of Economic Analysis

So the tax cut induced some accounting maneuvers, but did nothing to promote capital flows to America.

The tax cut did, however, have one important international effect: We’re now paying more money to foreigners.

Bear in mind that the one clear, overwhelming result of the tax cut is a big break for corporations: Federal tax receipts on corporate income have plunged (Figure 3).


Figure 3CreditBureau of Economic Analysis

The key point to realize is that in today’s globalized corporate system, a lot of any country’s corporate sector, our own very much included, is actually owned by foreigners, either directly because corporations here are foreign subsidiaries, or indirectly because foreigners own American stocks. Indeed, roughly a third of U.S. corporate profits basically flow to foreign nationals – which means that a third of the tax cut flowed abroad, rather than staying at home. This probably outweighs any positive effect on GDP growth. So the tax cut probably made America poorer, not richer.

And it certainly made most Americans poorer. While 2/3 of the corporate tax cut may have gone to U.S. residents, 84 percent of stocks are held by the wealthiest 10 percent of the population. Everyone else will see hardly any benefit.

Meanwhile, since the tax cut isn’t paying for itself, it will eventually have to be paid for some other way – either by raising other taxes, or by cutting spending on programs people value. The cost of these hikes or cuts will be much less concentrated on the top 10 percent than the benefit of the original tax cut. So it’s a near-certainty that the vast majority of Americans will be worse off thanks to Trump’s only major legislative success.

As I said, even the mainly negative reporting doesn’t convey how bad a deal this whole thing is turning out to be.

Occam's Razor (look it up righties) and the President

You mean past the fact YOU didn't get one? That the wealthiest in this nation who have so much more

to be thankful for and have the wherewithal to pay for the privilege of being protected by the blood sacrifice you, me and our families make in uniform, got a tax decrease? You do know who write the tax laws, don't you? Not you or me, the wealthy do. What lobbyist do you and me have????? Guys like Trump and the Kochs have lobbyists, and they write the tax laws. Are your taxes too high? That because the wealthy do not pay enough. Consider that at the grocery line or writing checks for bills one day or when the roof leaks or when you consider the continuing education costs for your kids.

Why do you vote against your own and your family interests?????????

FBI Collected Fake Green Cards Allegedly Supplied By Trump Golf Club Managers: Report

FBI Collected Fake Green Cards Allegedly Supplied By Trump Golf Club Managers: Report
Attorney for immigrants also said he turned over fraudulent Social Security numbers provided by managers at the Trump National Golf Club.

By Mary Papenfuss

The FBI and New Jersey investigators have collected employment documents and information allegedly provided to immigrants not authorized to work by supervisors at President Donald Trump’s golf club in Bedminster, The Washington Post reported Saturday.

Newark attorney Anibal Romero told the newspaper that he turned over fake permanent resident green cards and fraudulent Social Security numbers that he said were given to one of his clients by managers at the Trump National Golf Club. He also handed over pay stubs given to another client, Romero said.

Romero, who represents five immigrants he says were undocumented when they worked for Trump’s New Jersey club, said he met with two FBI agents and investigators from the New Jersey state attorney general’s office last month. The federal agents said they were going to “coordinate” with the state investigators, Romero said.

The New York Daily News reported Saturday that Romero turned over documents to state officials — but only discussed them with the FBI agents.

“I’m confident that federal and state authorities will conduct a complete and thorough investigation,” Romero told the News.

Both papers reported that Romero said one of the FBI agents told him on the phone that the agent had “received a referral” from Special Counsel Robert Mueller’s office about the attorney and the information he had.

Romero had earlier reached out to Mueller’s office but was told that the situation was outside of its jurisdiction, according to the News.

The policy of the state attorney’s office is not to confirm or deny the existence of an ongoing investigation. The FBI declined to comment.

Romero told the News and the North Jersey Record earlier this month that the attorney general’s office had also contacted him about reports by his clients of racially charged harassment and threats that the women were allegedly subjected to by their supervisors.

One of Romero’s clients, 45-year-old Guatemalan native Victorina Morales, went public in a New York Times interview early this month about her three years working at Trump’s New Jersey resort as an undocumented immigrant who cleaned Trump’s living quarters. Romero said Morales was provided with fake green cards and Social Security numbers by resort managers when she was working there illegally.

Morales told the Post on Saturday that she had come forward in part to highlight the “hypocrisy” of a president who rails against undocumented immigrants while they work at his club.

Morales said she entered the U.S. illegally in 1999 and began working at the Trump National Golf Club in 2013. She was told at the club that her working status “didn’t matter,” she recalled.

The Trump Organization said after Morales’ story was published in the Times that the company has “very strict hiring practices.”

Unfortunately, that practice was to hire undocumented workers to keep wages low. Think about it: who benefits from undocumented workers and low wages? Not you righties or us lefties!!!!

Trump approved extra $129M to help House investigate Hillary. Now Pelosi has it.

Trump approved extra $129M to help House investigate Hillary. Now Pelosi has it.

Community (This content is not subject to review by Daily Kos staff)
Saturday December 29, 2018 · 9:23 PM CST


House Minority Leader Nancy Pelosi of Calif., right, and Senate Minority Leader Sen. Chuck Schumer of N.Y., left, walk out of the West Wing to speak to members of the media outside of the White House in Washington, Tuesday, Dec. 11, 2018, following a meeting with President Donald Trump. (AP Photo/Andrew Harnik)

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2019 is going to be great. 2020 even better. Yeah, the shutdown sucks, but I imagine it can only last so long—Trump’s 54,000 border patrol agents are currently not getting paid, nor are the farmers who can’t get their bailout payments until the furlough ends. Trump will cave, and its not going to get any better for him.

Several months ago, House leaders impressed upon the Donald the need to fix the damage done by Newt Gingrich. Back in the day, he took away staff from committee chairs to consolidate his own power. He figured he could outsource policy making to lobbyists and right-wing think tanks—which is exactly how the GOP runs Congress. The big problem here is that oversight and investigations are hard to run with limited staff, and Hillary Clinton is not going to investigate herself.

Back in late August, Donald—living in his ego-inflated bubble--kept insisting that there would be a “red wave” and listened to pundits who told him that not only would the Democrats not take the House, but the GOP was likely to gain seats. That was the selling point for Congress to get their staff funding. The extra staff would be critical for conducting hearings and investigations, which would be “handy for investigating Hillary Clinton’s emails.”

Trump approved the extra $129 million for staff.


Donald Trump Is Handing House Democrats a Loaded Gun

When Democrats assume control of the House on January 3rd, they will have $129 million more to spend on staff than their predecessors in the 115th Congress did—money they can use to hire more personnel to, among other things, investigate the Trump administration.

And that, by the way, is exactly what she is doing:

Pelosi is on a hiring spree, looking to hire a "batch of attorneys" as they prepare for the largest congressional investigation of a sitting president in modern history
TheSeminoleDemocrat (@TheSemDem) December 29, 2018

As the clip states, the House Judiciary Committee is running multiple ads for lawyers with expertise in criminal law, immigration law, constitutional law, antitrust law, and bankruptcy law, just to name a few. Legislators are saying that applications are pouring in. (As a commenter noted, people actually want to work for Democrats.)

Since every week there’s a new Trump scandal, they are going to be busy:

BREAKING: NJ AG has evidence that managers at Trump’s golf club gave fraudulent green cards & Social Security numbers to employees. When evidence was uncovered the AG didn’t trust Sessions, so they contacted Mueller. Now the FBI & Mueller are investigating the immigration crimes.
Scott Dworkin (@funder) December 29, 2018

REMINDER: "The Prague meeting is more than the vaunted smoking gun. It would constitute proof of Trump's collusion with the Kremlin to secure his election, something most Americans would fairly label treason."
John Schindler (@20committee) December 27, 2018

No big, but NSA intercepted Russian officials talking about Michael Cohen visiting Prague in the late summer of 2016. And NSA wasn't the only Western intel service that did. Seems important.
John Schindler (@20committee) December 28, 2018

In 2019 House Democrats will investigate the cruel immigration policies that have led to the deaths of children in US custody. Kirstjen, Jeff, Stephen and Donald: Clear your calendars.
Swing Left (@swingleft) December 29, 2018

On the flip side, the GOP just closed their investigation into Hillary’s emails and had to admit they had absolutely nothing. However, during this same time period, with the GOP and Trump obstructing in every way, Mueller’s team has managed to get either indictments or guilty pleas from 35 people and 3 companies. Just imagine what the Democratic House is going to find, now that they have subpoena power, staff, funding, and a toothless GOP that can no longer obstruct.

It has also been pointed out that Nancy could even put some funding aside in reserve, just in case Trump tries to fire Mueller and his team.

It’s almost sad that Trumpy really did think that the shutdown would “distract” Nancy from focusing on his Russian collusion and multiple crimes. Wrong again. Nancy knows a thing or two about multi-tasking. Trump is a mentally impaired toddler who can’t concentrate on a single thing--hell, he can’t even drink out of a cup with one hand. It’s really not fair to pit these two against each other.

But I’m already having so much fun watching.


The Turning of the Screwed

The Turning of the Screwed

Sure, your 401k is in the crapper, the government is shut down, and Facebook has been sharing your intimate private chats with the Fortune 500, but things could be worse.

On top of all that, you could be a Republican. The truth is that they are the people who are really getting screwed.

As we turn toward 2019, the grand deal that Republicans made with the devil is beginning to smell like the fish you left in the trash that time that the garbage collector missed your pick-up.

It was all so much fun for the right wingers when the only consequence of Donald Trump’s lies was the sight of the liberal media going into pulmonary shock on a daily basis, agog with outrage at Trump’s projectile bullshitting.

Slowly, however – but surely -- things are changing. It is now becoming more apparent that Trump’s deceits have all been improvised explosive devices set on timers designed to detonate in the hands of Republicans. It is the Trump worshipers, lackeys, apologizers, enablers, and suck-ups -- from Ann Coulter to Rush Limbaugh to Mitch McConnell -- who are getting toasted by the time-bombs they were eagerly carrying for the President.

The fiscal Republicans who wanted Trump in order to get a sweetheart tax overhaul, tough renegotiation of “stupid” trade deals, and broad rollback of governmental regulations are now finding that the financial markets are cratering in the wake of the trade wars, burgeoning deficits, and the economic policy chaos that reigns in the Trump administration. Wall Street does not speak in sound bytes, it communicates at the end of each trading day with triple-digit numbers in burning red.

The Republicans who wanted Trump because of a perception that Obama was weak on the world stage have found a President who splays himself before global thugs, negotiates by preemptively giving away the store, and ignores evidence of political murder, cyber-warfare, and manipulation of our elections.

The Republicans who expected that by now there would be a fifty foot tall border wall that was paid for by Mexico are finding out that no such wall exists, has even started to exist, should exist, or ever will exist. There is no longer even a pretense that Mexico is going to pay for it. They are also learning that the price of Trump’s radical anti-immigration tough border policy is a shameful practice of separating parents from children, and that two children below the age of eight have died in the custody of United States border security officials.

The Republicans who love Trump’s BSD posturing about a strong military were startled to see General James “Mad Dog” Mattis, H.R. McMaster, and General John Kelly all leave the administration, diminished and in disgust. The Commander-in-Chief, meanwhile, orders troop movements based on his political needs, sending troops to protect our southern border against an illusory invasion from poor immigrants, and away from a strategic role in Syria.

The Republicans who loved Trump’s convention speech about being the “law and order president” are witnessing a White House in open warfare with U.S. intelligence agencies and the FBI, and a President who actively seeks to discredit these vital government organizations.

The Republicans who wanted a CEO from the private sector to come in and bring world class business leaders to the task of governance are now seeing gaping vacancies in the Federal government leadership, and beleaguered Trump officials tagged with “acting” titles because no first class people want the stain and legal liability of working in this White House. The White House is filled with toadies, suck-ups, and sycophants, and Trump is actively recruiting more.

The Republicans who supported Trump because he promised to repeal ObamaCare on day one and replace it with medical care that was "superior" and "far less expensive" have discovered that when Trump made his vow, he did not even begin to understand the complex world of medical insurance. They have learned that the primary Republican solution for lowering the cost of healthcare is to go back to a world where millions of Americans are uninsured, where preexisting conditions are not covered, and where taxpayers shoulder the burden of millions of emergency room visits that must be treated but cannot be paid for.

The Republicans who loved the idea that Donald Trump would “drain the swamp” have witnessed more guilty pleas, indictments, and corruption than any Presidency in memory, as cabinet officers resign in disgrace and the President himself openly violates the emoluments clause in the Constitution.

The Republican elected officials who hitched a ride with Trump in order to get a sweet tax deal and a few Supreme Court Justices are now finding Trump a bit too hot to handle. Mitch McConnell was publicly dissed when Trump welched on signing a stop-gap spending bill. One time Presidential aspirant Paul Ryan’s career is finished. Trump's concern that his supporters would become “tired of winning” must seem bitterly ironic to the the net 40 Republican Congressional Representatives who were sent packing in a mid-term blue wave.

Sooner or later, Republicans have to notice that the only people who actually believed the bullshit in the first place were, uh, Republicans. Democrats may be angry, but they do not feel victimized by Trump’s deceit, because they were not naive, ignorant, cavalier, or willfully gullible enough to buy into any of it in the first place.

But the people who believed it? They are starting to get pissed. They are beginning to feel victimized, let down, and manipulated. They are starting to voice their anger, disappointment, and sense of betrayal. Call it the turning of the screwed.

Do you think Ann Coulter actually believed Donald Trump when he said, “we are going to build a big beautiful wall all along our southern border, and Mexico is going to pay for it?” Uh, yeah! She wrote a book entitled In Trump We Trust: E Pluribus Awesome! Learning that the President was about to sign a stop gap budget bill with no funding for the wall she was promised, Coulter wrote a column entitled, “Gutless President in Wall-Less Country.” Rush Limbaugh piled on: “It looks like President Trump is caving on his demand for a measly one billion in the budget for his wall on the border with Mexico.”

Do you feel it? The turning of the screwed. Trump took them all, hook, line, and sinker. He lied to their faces, humiliated many along the way, and brutally manipulated the ignorance and rage of many unemployed or underemployed Americans who felt abandoned by their government.

The cracks in the blind wall of Republican allegiance can now be seen with the naked eye.

Trump promised his supporters a foreign policy centered on the concept of “America First,” which is actually a far cry from the actual approach he has taken, better characterized as “America Alone.” Trump’s unilateral decision to pull U.S. troops out of Syria was widely condemned in Republican leadership circles. Lindsay Graham finally put full voice to the thought that has been true of so many Trump actions: “if Obama had done this, we’d be going nuts now.” He went on to characterize Trump’s decision as an “Obama-like mistake,” a phrase that is guaranteed to make Trump’s blood boil. Marco Rubio upped the ante by declaring that Trump “is about to make a major blunder” in leaving Syria.

Trump’s decision on Syria was made without consultation with allies and in open defiance of the advice provided by his experts in the military and intelligence communities, causing General Mattis to resign and deliver a stinging letter of resignation. Mattis’ letter of resignation is best appreciated when viewed side-by-side with a Donald Trump tweet. The latter screech with all-cap manic impulsiveness, are devoid of factual or historical grounding, and are littered with typos, misspellings, and syntax malfunctions. Mattis wrote with firm, substantive, restrained resolve. He explained to the President of the United States why our nation evolved in the seventy years since World War II into the world’s preeminent power: unconditional alliances with allies and “clear-eyed” perspective on the threats from “malign actors and strategic competitors.”

Even Senate Majority Leader and major Trump suck-up Mitch McConnell is showing signs of weariness and angst with Trump. McConnell publicly acknowledged that he was “distressed” over the Mattis resignation. Less that a week later, McConnell would be humiliated when he presented the President with a stop-gap funding bill that the White House had promised to approve, only to see Trump renege.

More Republican public rebukes: In a direct challenge to the President's mysterious deference to Saudi leader Mohammed bin Salma, the Senate passed a resolution that fingered the Crown Prince as "responsible" for the murder of journalist Jamal Khashoggi.

Wall Street is expressing its profound frustration with this President with a stunning plunge in the Dow Jones Industrial average, with wild swings not simply within a single trading days but within single hours.

Perhaps the most egregious deceit of all is the fact that Trump's lies are often intended purely to distract his base and the media away from yesterday's debacle. This very slight-of-hand President is left to govern with sleight of hand. The government shut-down is the latest in a series of invented calamities that merely serve to cut off the media oxygen to a Def Con One explosion like the Mattis resignation.

As the calendar turns to a New Year, we sense it clearly: the Republicans are increasingly wary of a White House acting without adult supervision, under unremitting legal pressure, and without any grounding in history, without any geopolitical savvy, without any clear objective other than gut judgments rooted in the purely political calculation of self-preservation. The Republicans are figuring out what the Dems have known all along: if Donald Trump needs to save his political hide, he will do anything. Fire the Fed Chair. Shut down the government. Fire Mueller. Pull out of Afghanistan. Start a trade war.

Start a real war.


So they are finally beginning the long, painful, embarrassing, and strenuous process of pulling their heads out of the sand. Better late than never.

The timing of this long-awaited reckoning could not be better.

Imagine Republicans en masse feeling queasy about Trump’s grip on reality and uneasy about the meltdown he could cause for Republicans in 2020 at just the moment that Robert Mueller releases his final report.

Imagine how different the Republican response to that report might be if enough Republicans are calculating the Mike Pence is better positioned to lead the party in 2020 than Trump.

Watch the ball drop on New Year’s Eve, Republicans. It won’t be tough to follow… it will follow the same trajectory as your party as long as you have that ball and chain named Trump clamped to your ankle.

2019 is going to be an interesting year indeed.

And it begins with the turning of the screwed.

Re-posted with permission of BTRTN

Trump-Russia: Republican probe of alleged FBI bias ends 'with a whimper'

Trump-Russia: Republican probe of alleged FBI bias ends 'with a whimper'

Committee chairs issue just a letter rather than final report after inquiry that was condemned as ploy to undermine Robert Mueller

Fri 28 Dec 2018 23.10 EST

Republicans have quietly and unceremoniously ended their congressional investigation of whether the FBI and Justice Department were biased in their handling of inquiries into Hillary Clinton’s emails and Donald Trump’s ties to Russia.

House judiciary chairman Robert Goodlatte and oversight chairman Trey Gowdy, who are retiring next week, sent a letter rather than a full report to the Justice Department and the Senate majority leader Mitch McConnell. It wraps up an inquiry that was conducted mostly behind closed doors but also in public as Republican lawmakers often criticised interview subjects later and suggested they were conspiring against Trump.

Democrats have blasted the GOP-led congressional inquiry, saying it was merely meant as a distraction from special counsel Robert Mueller’s Russia investigation. Its termination comes less than a week before Republicans cede the House majority to Democrats.

Goodlatte and Gowdy say in their letter that they reviewed thousands of documents and conducted interviews that “revealed troubling facts which exacerbated our initial questions and concerns”. They call on the Justice Department to appoint a special counsel to investigate further. A separate report issued this year by the Justice Department’s own internal watchdog found there was no evidence that the then FBI chief James Comey or the department were motivated by political bias toward either candidate.

Jerry Nadler, the top Democrat on the judiciary committee, and Elijah Cummings, top Democrat on the oversight panel, are expected to formally end the investigation when they take power in January. Nadler has called it “nonsense”.

California’s Adam Schiff, the top Democrat on the House intelligence committee, said on Friday evening that the Republican investigation was ending “not with a bang, but with a Friday, buried-in-the-holidays whimper, and one foot out the door”.

With Associated Press

Regarding a wall, barrier, partition - world class or not, at $1, $1B or even $1T ...

The "weak" wall we have now:

Republicans Now Confessing Regrets For Supporting Him

GOP In Turmoil After Trump’s Recent Mistakes, Republicans Now Confessing Regrets For Supporting Him
The GOP is really starting to turn on Trump.

by Patricia Colli 4 days ago

Donald Trump’s presidency has seen a lot of lows, and somehow he continued to be supported by his fellow spineless Republicans and supporters in spite of all his mistakes. But unfortunately for the unworthy, unqualified POTUS, those days of forgiveness and turning a blind eye may just be over.

Earlier today on CNN’s “New Day,” New York Times reporter and CNN contributor Maggie Haberman reported on the inner turmoil inside the Republican Party, and things have never looked worse for Trump and his presidency. After several fiascos such as Trump’s threats of a government shutdown, his Syrian withdrawal, Defense Secretary James Mattis’ resignation, the stock market tanking, and the continued failure of Trump’s racist border wall, there are now very serious doubts about Trump’s survival in the White House.

She said: "A number of conservatives who worked on the campaign and supported the president and now say, you know, I regret doing that, and this was a mistake, this administration is, you know, off the rails, and all of these investigations that are coming to a head will be a huge problem.”

Haberman also reported that these conservatives were now “disgusted” with what has been made public about the Michael Cohen plea deal. She predicted that Trump’s mounting investigations are just “going to intensify as we get into the year” and then brought up the very real chances of impeachment. She said:

It takes 20 Republican senators to vote in favor of impeachment. This could be a critical moment.”

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