Here We Go (Again): “BACK TO THE FUTURE”
Marty: Git Back to 1980's
Americans should expect the “largest tax change since Reagan,” (Note: also back then a recession and out of control deficits followed which the Reaganites said Hey, deficits are no biggie) with federal tax cuts for average income earners as well as U.S. businesses, says President-elect Trump's nominee for Treasury - banker, movie producer, and former Goldman Sachs partner Steven Mnuchin on CNBC Squawk Box which was his first public comments on the incoming administration's economic priorities.
Then he says a heluva lot more: “There will be a tax cut for the middle class. Any tax cuts that we have for the upper class will be offset by less deductions to pay for it.”
(My note: Hang on to your wallet Mr. and Mrs. Average American).
Mnuchin continued: “Tax deductions for charitable contributions would still be allowed, there would be a cap on mortgage interest payments, though some deductibility would continue.”
Then he echoed elements of tax plans Trump outlined during his campaign: (1) the proposed changes also call for cutting the nation's 35% top business tax rate to 15%, (2) enable large corporations to bring cash back to the U.S. from overseas subsidiaries.
Mnuchin continued with more: “We think by cutting corporate taxes we'll create huge economic growth and we'll have huge personal income, so the revenues will be offset on the other side.”
Mnuchin then added the proverbial icing for the proverbial cake in essence saying the changes should help increase sustained U.S. economic growth as he predicted, then added: “I think we can absolutely get to sustained 3% to 4% GDP. And that is absolutely critical to the country. To get there, our No. 1 priority is tax reform. This will be the largest tax change since Reagan.” (My hint: refer to the graph above and here).
I note: Some tax experts voiced cautious optimism about the proposals, even as they cautioned about a potential repeat of the federal deficit increases that followed the Reagan tax overhaul in 1981.
Slashing the corporate tax rate and allowing businesses to expense capital investments in the year they're made could make 3% to 4% GDP growth “a reasonable goal,” says Robert Goulder, senior tax policy counsel for Tax Analysts, a non-partisan publisher focused on tax policy and administration.
However, capping mortgage tax deductions and other cost-saving proposals, such as reducing or eliminating deductions for state and local taxes, could prove politically difficult, said Goulder. Others have tried such plans and failed, he said, citing the federal tax reforms proposed in 2014 by then-Rep. David Camp (R-MI).
Goulder asked: “Where are the spending cuts? Where are the federal entitlement reforms? Can we run up a larger deficit without having negative effects that outweigh the positives of pro-growth tax plans?
Cutting the corporate tax rate will generate more investments, factory growth and jobs, said Chris Edwards, director of tax policy studies at the Cato Institute, a non-partisan public policy group focused on limited government and free markets.
However, referring to personal income taxes, Edwards predicted it would be “difficult to ensure that everyone gets a break.”
My B/L review: Matters not to Trump and the top 1-2%, its balls to the walls for like-minded billionaires. We saw it before and we’re about to see it all over again.
Hang on tight… next election is in 2 more years ….
Further I see this part of the “plan” as nothing but a huge bribe to big business:
“… The proposed changes also call for cutting the nation's 35% top business tax rate to 15%, along with enabling large corporations to bring cash back to the U.S. from overseas subsidiaries.”
I note: Those trillions and yes, trillions are from huge profits they made, moved them off-shore to get lower or no taxes and now, they want more to come back home for lower taxes, make another bundle and what, more broken promises?
Folks that is precisely what this is: a sleight of hand trick from Trump. I think honestly that we all can fairly call all this: “The Art of the Con.”
Think hard about this, too, what Mnuchin says and seems to imply: “We think by cutting corporate taxes we'll create huge economic growth and we'll have huge personal income, so the revenues will be offset on the other side.”
WTF does that mean in layman's terms? Simple: (1) Help the top (again), and (2) screw the middle and bottom along the way.
Yep – so duck – as before, folks we have been had (again). Thanks for stopping by. Now just wait until it gets passed, signed into law, and hits us squarely between the eyes.
Sticker shock — check, and soon on the way.