Tag Archives: budget

Trump Tax Plan Unveiled!

Mother Jones

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Last night I wrote that the Trump tax plan would be little more a than a rewrite of his campaign document. I was wrong. Here it is:

It’s not worth the 60 seconds it would take to check this, but I’m pretty sure this is less detailed than Trump’s campaign document. What a fucking embarrassment. It’s like something a high school class would put together. Even with only five days to work with, you’d think the Treasury Department of the United States of America could produce a little more than this.

But let’s go through the whole thing. There’s a little more than you see in the tweet above:

Three tax brackets instead of seven. However, there’s no telling how this affects taxes until Steve Mnuchin tells us where the cutoff points are.

Doubles the personal exemption from $12,000 to $24,000. This will help middle-class families, but it’s a little hard to know how much it will help them until we get details on….

Elimination of itemized deductions. Which ones? All of them? Good luck with that. But you can be sure that one of the targets will be the deduction for state income taxes, since that mostly benefits the hated blue states of California and New York.

Elimination of the estate tax. A huge boon for the super-duper rich.

Elimination of the AMT. A huge boon for the rich.

Elimination of Obamacare’s 3.8 percent tax on investment. A huge boon for the rich.

Reduce business tax rate to 15 percent. A huge boon for corporations and the rich, especially those with income from pass-through businesses. Apparently Mnuchin doesn’t care that Senate rules make this almost literally unpassable.

Tax repatriation holiday. A huge boon for corporations and the rich.

Territorial taxation system for corporations. There’s no telling what effect this would have. There are good territorial systems and bad ones. It’s all in the details—though it’s a pretty good guess that Trump will opt for one of the bad ones.

The driving force behind this appears to be Trump’s desire to call this the biggest tax cut in American history. The previous champ was Ronald Reagan’s 1981 tax cut, which cost 3.9 percent of GDP. That means Trump is gunning for 4 percent of GDP.

The Congressional Budget Office pegs GDP over the next ten years at $239 trillion. To get to 4 percent, Trump’s tax plan will need to cut taxes by $9.5 trillion. This is obviously ridiculous. Maybe Trump isn’t accounting for inflation or something. That would get him down to $4.3 trillion.

Really, who knows? I suppose Trump will call it the biggest tax cut in history regardless of how big it is. He doesn’t care. The one thing we can be sure of is that the rich will swoon. At a guess, something like 90 percent of that $9.5 (or $4.3 or whatever) trillion will go to the top 10 percent. The rest of us get a few crumbs.

Of course, this whole thing is DOA in Congress anyway, which will pretty much ignore Trump and create its own tax plan for the rich. This one-page “plan” is really just a publicity stunt so Trump can say he introduced it during his first hundred days. What a doofus.

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Trump Tax Plan Unveiled!

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Trump’s Tax Cut Plan Will… Pay… For… Itself!

Mother Jones

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Back during Steve Mnuchin’s confirmation hearings for Treasury Secretary, he said he was surprised that IRS staffing had gone down. This just reduces the number of audits they can perform, and therefore the amount of tax revenue they collect from high earners. Just think about it. If you increased hiring, it would pay for itself!

It was très adorbs. But Mnuchin is a quick learner, and he never brought that subject up again. Instead, he’s now talking about a much more acceptable kind of plan that pays for itself. The subject, of course, is tax cuts:

Treasury Secretary Steven Mnuchin said the economic growth that would result from the proposed tax cuts would be so extreme — close to $2 trillion over 10 years — that it would come close to recouping all of the lost revenue from the dramatic rate reductions. Some other new revenue would come from eliminating certain tax breaks, although he would not specify which ones.

“The plan will pay for itself with growth,” Mnuchin said at an event hosted by the Institute of International Finance.

The Congressional Budget Office will have a very different take on this, and their take is the only one that matters. So why does Mnuchin even bother with this tired old charade? Maybe so that Donald Trump can yell and scream about how the CBO is rigged when they say that his tax plan is a deficit buster? Maybe to give congressional Republicans an excuse to fire Keith Hall and install a new CBO director who will give them whatever numbers they want?

Who knows? Maybe it’s just reflex. While we wait to find out, however, here’s a chart showing income tax receipts following the five most recent big changes to tax rates. You can decide for yourself if tax cuts pay for themselves or if tax increases tank the economy.

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Trump’s Tax Cut Plan Will… Pay… For… Itself!

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It’s the Wall Wot Won It

Mother Jones

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Phil Klinkner takes to the pages of the LA Times this morning to tell us that immigration was a big deal in the 2016 election:

Comparing the results of the 2012 and 2016 ANES surveys shows that Trump increased his vote over Mitt Romney’s on a number of immigration-related issues. In 2012 and 2016, the ANES asked respondents their feelings toward immigrants in the country illegally. Respondents could rate them anywhere between 100 (most positive) or 0 (most negative). Among those with positive views (above 50), there was no change between 2012 and 2016, with Romney and Trump each receiving 22% of the vote. Among those who had negative views, however, Trump did better than Romney, capturing 60% of the vote compared with only 55% for Romney.

….Overall, immigration represented one of the biggest divides between Trump and Clinton voters. Among Trump voters, 67% endorsed building a southern border wall and 47% of them favored it a great deal. In contrast, 77% of Clinton voters opposed building a wall and 67 % strongly opposed it.

This gibes with my anecdotal view that a fair number of Trump voters didn’t pay much attention to anything he said except that he was going to build a wall and keep the Mexicans out. All the budget and regulation and Obamacare and climate change stuff was just noise that they didn’t take very seriously. But building a wall was nice and simple, and they thought it would bring back their jobs and keep their towns safe.

Having said that, though, I want to repeat a warning: everyone should stop looking for tectonic changes that account for Trump’s win. Hillary Clinton was running for a third Democratic term during OK-but-not-great economic times, and that’s always difficult. Most of the fundamentals-based models predicted she’d win by a couple of percentage points, and she actually did much better than that—until James Comey decided to destroy her. And even at that, she did win by a couple of percentage points. It was a fluke of the Electoral College that put Trump in the White House, not a historic shift in voting patterns.

The real question is how Trump won the Republican primary. At the presidential level, that’s a far more interesting topic than what happened in a fairly ordinary general election.

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It’s the Wall Wot Won It

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Trump Just Appointed a Chemical Industry Honcho to Protect Us From Chemicals

Mother Jones

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The American Chemistry Council represents the interests of the chemical industry—companies that “make the products that make modern life possible,” as the group’s web site somewhat haughtily puts it. Member companies include Big Oil subsidiaries Chevron Phillips Chemical and ExxonMobil Chemical, the Saudi chemical giant SABIC, pesticide behemoth Bayer and its pending merger partner, Monsanto, as well as DuPont and its pending merger partner, Dow Chemical.

In a bold move, the Trump administration has named the ACC’s senior director of regulatory science policy, Nancy Beck, as the deputy assistant administrator of the Environmental Protection Agency office that regulates the chemical industry. It’s known as the Office of Chemical Safety and Pollution Prevention, and it exists to “protect you, your family, and the environment from potential risks from pesticides and toxic chemicals.”

Beck’s new post marks her return to government work. Before moving into her post at the American Chemistry Council, where she started in 2012, she served as toxicologist/risk assessor/policy analyst for the US Office of Management and Budget, a job she started under President George W. Bush in 2002. A 2009 investigation by the House Science and Technology Committee criticized Beck by name for her role in what it called a “recurring problem in the Bush Administration’s term in office”: “White House staff re-writing the ‘science'” around important policy issues.

The report specifically noted Beck’s role in assessing the EPA’s characterization of a highly toxic class of chemicals called polybrominated diphenyl ethers (PBDEs), which were widely used as flame retardants in furniture but have since been phased out. The report found that Beck attempted to edit an EPA statement on PBDEs in ways that “appear to enhance uncertainty or reduce profile of the harmful effect being discussed.” The report called one of her edits “very disturbing because it represents a substantial editorial change regarding how to characterize the science.”

And now, after her stint working directly for the chemical industry, Beck will have a direct role in shaping chemical policy at the EPA.

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Trump Just Appointed a Chemical Industry Honcho to Protect Us From Chemicals

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The Depressing Truth About Hipster Food Towns

Mother Jones

Hallie Bateman

Deborah Gilfillan lives between Brooklyn’s first Trader Joe’s and its flagship Whole Foods. She’s also walking distance from Union Market, a local grocery chain where flank steak sells for $15.99 per pound. But these stores are too expensive and don’t have the right ingredients for the 62-year-old contract administrator, a native Brooklynite who lives in a brownstone she bought for a song back in the 1960s. Nowadays, she usually walks or takes the bus almost a mile to shop.

In the past, if a city dweller had to journey a mile to a grocery store, it probably meant she lived in a “food desert.” The term was coined by social scientists in the 1990s to describe places bereft of ingredients needed to make a healthy meal.

In recent years, the US government has spent at least $169 million in grants and helped raise $1 billion more to try to end food deserts, by funding things like new stores and farmers markets. But as urban neighborhoods gentrify, a new kind of disparity has emerged. Many experts, including some federal researchers, stress that high local grocery prices—not simply distance—prevent lower-income households from eating well. Gilfillan finds herself not in a food desert, but rather in what some soci­ologists are now calling a food mirage. Her home is surrounded by fancy markets and restaurants, yet cheap staples are hard to come by. “You can go in there and buy 10 different lettuces,” she says. But “we grew up on pork. A lot of them don’t have it.”

In cities across America, specialty stores flock to newly hip districts while cheap supermarkets are pushed out. Since 2000, the median sale price for a home in Gilfillan’s neighborhood of Boerum Hill has increased nearly fivefold, from $250,000 in January 2000 to $1.15 million in the fall of 2016, pulling up commercial real estate with it. Met Foods, the grocery store she used to frequent, was sold in 2014 as the land under it became valuable.

The conventional approach to addressing food access is blind to these mirages. In 2010, the White House announced the Healthy Food Financing Initiative, which provides loans, grants, and tax breaks to food sellers mostly in neighborhoods that qualify as food deserts. To help identify needy areas, the government looks at whether the median income of a census tract is less than 81 percent of the median income of the greater area. But this metric doesn’t work well in gentrifying neighborhoods, where rich and poor people live crammed together.

Take Boise, an up-and-coming district in Portland, Oregon. In 2014, 15 percent of its residents lived below the federal poverty line of $11,670 for individuals or $23,850 for a family of four. But thanks to upscale stores like New Seasons (a West Coast chain similar to Whole Foods) and the district’s high median family income, it’s hard to call Boise a true food desert, even though people there have few options besides pricey retailers and corner stores stuffed with junk food. While “conventionally defined food deserts are rare in Portland,” a pair of researchers concluded in a 2013 paper, “food mirages, by contrast, cover much of the city.”

Nonprofit grocery stores might help close this gap. For example, Fare & Square, a nonprofit in Chester, Pennsylvania, relies partly on government funding to keep its prices low. But the Obama administration’s initiative mostly targeted nonprofit grocery stores in neighborhoods already deemed food deserts. Places like Boise and Boerum Hill tend to fall through the cracks.

The Department of Agriculture doesn’t seem sure what to tell people living in food mirages. Even benefits through the Supplemental Nutrition Assistance Program (formerly called food stamps) aren’t a great solution: They’re based on nationwide average costs, so they don’t go as far in places where specialty and niche food stores dominate the market and charge upward of $4 a gallon for milk. When I asked a SNAP spokeswoman about the problem of ignoring local food prices, she referred me to a webpage called “Healthy Eating on a Budget.” “Create a grocery game plan,” it suggests. “Rethink your food choices and pick healthier options.”

Gilfillan has a grocery game plan. She treks to Stop & Shop, a chain supermarket where she finds plenty of bargains. On her way home, she passes modern condos and farm-to-table restaurants. Although she can’t bring herself to move out of her house, her advice for her son, Dashawn, is different. “Sell it for whatever you can get,” she recalls telling him. “So long as you got the memories, you don’t need this damn house.”

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The Depressing Truth About Hipster Food Towns

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Friday Is D-Day For the Republican Health Care Bill

Mother Jones

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From Politico:

President Donald Trump is demanding a vote Friday in the House on the Republican plan to repeal and replace Obamacare, White House Budget Director Mick Mulvaney said. If the bill fails, Trump is prepared to move on and leave Obamacare in place, Mulvaney said.

This makes sense on a whole bunch of levels:

As a threat against conservatives: Vote for the bill or else Obamacare stays around forever and it’s your fault.

As a boredom minimizer: I doubt very much Trump himself cares one way or the other about health care, and he’s probably tired of all boring technical talk that surrounds it (EHBs, continuous coverage, age bands, etc. etc.). He also instinctively understands that the whole thing is a shit show that’s making him more and more unpopular.

As politics: The current debacle has shown that there’s just no sweet spot acceptable to both moderate and conservative Republicans. Why keep beating yourself up over it?

As revenge against liberals: Trump has said that 2017 is the year Obamacare unravels. He will now do everything he can to make that come true, and there’s a fair amount he can do.

As substance: It frees up time for taxes and trade, things Trump is more interested in.

Besides, I don’t think Trump wants to stay in Washington over the weekend. The Mar-a-Lago golf course beckons. So let’s just put this baby to bed one way or the other, OK?

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Friday Is D-Day For the Republican Health Care Bill

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The Republican Health Care Bill Is In Deep Trouble

Mother Jones

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Jonathan Chait has a question:

No, no, no, no, no! Remember when we thought it might be better if Donald Trump won the Republican primary because Hillary Clinton would be sure to beat him? Then James Comey came along.

Shit happens, people, and there’s no predicting it. I doubt that the Republican bill can pass the Senate, but it might. The only thing we should care about is taking every possible opportunity to stop it, whenever and wherever we have a chance. Period.

(Besides, I doubt that voting for this bill will do much harm to Republicans when the midterms roll around. That’s still 20 months away, and besides, at least the yes voters can say they did everything they could to repeal Obamacare but leadership screwed it up.)

And speaking of the Republican bill, apparently the whip count really is falling short. So now the vote has been postponed to Friday. Maybe. It all depends on whether Paul Ryan and Donald Trump can figure out something else to capitulate on in order to win the votes of the crackpots in the Freedom Caucus.

Oh, and one more thing: CBO has rescored the bill. The original version reduced the deficit by $337 billion. The new one reduces it by only $150 billion. But that’s already out of date. They’ll have to score it again after Ryan and Trump finish negotiating with the conservatives. But it’s worth noting that Ryan doesn’t have a lot of headroom left if he also needs to negotiate with moderates who want a slightly less brutal program. Another $150 billion and the bill won’t reduce the deficit anymore. And if it doesn’t reduce the deficit, it can’t be passed under reconciliation.

But wait! One final thing: earlier I noted that the Republican bill is allowed to repeal only the elements of Obamacare that directly affect the budget. So if Republicans try to add provisions that repeal, say, essential benefits or pre-existing conditions, the Senate parliamentarian is likely to rule that they have to be jettisoned. However, as the presiding officer of the Senate, VP Mike Pence has the final word on this. He could just declare the parliamentarian wrong and allow the vote to go forward.

But what justification would he offer? As it happens, Republicans already have one handy. Last year, a number of them made the argument that the “direct effect” rule should be applied to the whole bill, not to its individual parts. In other words, Obamacare can be repealed completely because Obamacare as a whole directly affects the budget. If Republicans go down this road, that’s what you’re likely to hear.

However, my guess is that if Pence does this, he’ll lose a whole bunch of votes from moderate senators who won’t be a party to something that effectively kills the filibuster. So it probably can’t pass the Senate either way.

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The Republican Health Care Bill Is In Deep Trouble

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White House Says CBO Is Wrong, AHCA Would Actually Make 26 Million People Uninsured

Mother Jones

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My brain is imploding. HHS Secretary Tom Price said today that CBO’s estimate of insurance losses under the Republican health care bill “defy logic.” But it turns out the White House—which Price works for—agrees with the CBO. In fact, they think CBO is a little too optimistic. Here is Politico:

The White House’s own internal analysis of the GOP plan to repeal and replace Obamacare show even steeper coverage losses than the projections by the Congressional Budget Office, according to a document viewed by Politico on Monday.

The executive branch analysis forecast that 26 million people would lose coverage over the next decade, versus the 24 million CBO estimate — a finding that undermines White House efforts to discredit the forecasts from the nonpartisan CBO.

But…no…that’s completely…it doesn’t make…it’s…it’s…it’s…I mean…WHAT THE FUCKITY FUCKING FUCK-ALL FUCK IS GOING ON HERE?

Sorry about that. But I’m afraid this is about the most incisive analysis I have to offer. The Republican health care effort is a fiasco beyond even my wildest imagination.

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White House Says CBO Is Wrong, AHCA Would Actually Make 26 Million People Uninsured

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Donald Trump Wants to Spend $54 Billion More On Defense. He Can’t.

Mother Jones

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This is just a short post to highlight something I’ve already mentioned. Here it is:

Donald Trump says he wants to increase the defense budget by $54 billion. He can’t. That would bust through the sequester caps in the Budget Control Act of 2011, and can only be done if the BCA caps are increased. This, in turn, can’t be done via reconciliation. It has to be done normally, which means it will require at least eight Democrats to join all the Republicans in order to get 60 votes in the Senate. There’s zero chance of this happening if Republicans are also planning to slash every domestic program that Democrats care about.

That’s all. I keep reading stories about how Trump is going to find “offsetting” cuts of $54 billion, but that’s not how it works. The sequester caps apply separately to domestic and defense spending. Republicans can offset all they want, but they still can’t bulldoze the defense cap unless they get a bunch of Democratic votes to help them.

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Donald Trump Wants to Spend $54 Billion More On Defense. He Can’t.

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There’s Only One Big Thing That Matters About the Upcoming Republican Health Care Plan

Mother Jones

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Politico has gotten its hands on a leaked copy of a Republican health care plan. It’s a discussion draft of a bill that’s a couple of weeks old, but it still provides a good idea of what Republicans are thinking these days. Here’s my summary of Sarah Kliff’s summary:

Good news: Compared to previous plans, it’s better on pre-existing conditions; more generous in its funding of high-risk pools; generally cheaper for young people; and includes bigger tax credits than earlier Republican plans.
Neutral news: Loosens the list of “essential” benefits for all plans. This is generally better for healthy people and worse for sick people.
Bad news: Eliminates Medicaid expansion; cuts Medicaid funding; is terrible for the poor; and is far more expensive for older workers.

There’s other stuff (all Obamacare taxes are repealed, for example, which is great news for the rich), but I submit to you that these are pesky details. There’s really only one big thing that matters: how much the program costs.

Obamacare spends roughly $100 billion per year on subsidies to make health coverage affordable for the poor, and even at that premiums are too high for many people and deductibles are too high for almost everyone. Handwaving aside, there’s no way to produce a plan that’s even remotely useful with any less funding than Obamacare. That’s just reality.

If the funding is sufficient, we can all have a good time arguing over continuous coverage penalties, age ratios, essential benefits, and all that. If the funding is insufficient, it’s all just whistling in the wind.

Rumor has it that an outline of this plan was already submitted to the Congressional Budget Office, and the score they returned was so horrific that it never saw the light of day. So when Republicans do finally release a bill and a CBO score, just turn immediately to the section that estimates the ten-year cost. If it’s substantially less than a trillion dollars, you can skip the rest.

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There’s Only One Big Thing That Matters About the Upcoming Republican Health Care Plan

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