I am sure hoping some miracle occurs because of these proposed tax cuts, because if they don't it looks like paying for them may hurt some people who really can not afford the loss of money / services. Please remember that though the changes will help me and mine, I would have preferred to not change the tax code and to start cutting the spending. Actually running surpluses and starting to pay down the national debt before the next recession comes would be much wiser and truly Conservative.
VOX Who will Pay for the Tax Cut
The Hill Restructure SS and Medicare
Forbes How Long until Cuts Pay Off
WAPO Prelude to Attacking Entitlements
WAPO Ryan Admits GOP to Target SS, Medicare, Medicaid, Welfare, etc
The Hill Past History
CNN Tax Cut Make it Harder to Fight Next Recession
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VOX Who will Pay for the Tax Cut
The Hill Restructure SS and Medicare
Forbes How Long until Cuts Pay Off
WAPO Prelude to Attacking Entitlements
WAPO Ryan Admits GOP to Target SS, Medicare, Medicaid, Welfare, etc
The Hill Past History
CNN Tax Cut Make it Harder to Fight Next Recession
"Officially, the tax bill passed by the US Senate in the early morning hours of December 2 costs $1.45 trillion over 10 years, or $1 trillion after taking into account its effect on economic growth.
Those are the numbers of the Joint Committee on Taxation, Congress’s official arbiter of tax figures, but skeptics like the Committee for a Responsible Federal Budget have argued that the true cost is substantially higher. If the many temporary provisions of the bill are made permanent (and Republican senators have insisted they will make them permanent), the true cost is more like $1.6 trillion to $2 trillion, and it continues to mount after 10 years are up.
That bill has to be paid for, somehow. Congress could keep rolling over the debt, yes, but historical experience suggests that tax cuts are typically paid for by tax hikes in the future. Republicans have suggested they want to finance the cuts by slashing entitlement programs like Social Security, Medicare, and food stamps. “We're going to have to get back next year at entitlement reform, which is how you tackle the debt and the deficit,” House Speaker Paul Ryan said in a radio interview on Wednesday.
Whether you pay for the $1.5 trillion through tax hikes or spending cuts, that financing changes who ultimately wins and loses under the bill. And a new study by the Tax Policy Center suggests that when you take financing into account, the vast majority of Americans lose out."
22 comments:
It's unclear who will pay for the tax cut, because we don't know how government will change the way they redistribute income. This is a key political point. It's so important to deal with these things only in terms of numbers, never in terms of what the numbers represent. That's the strategy behind the refusals to conduct hearings and the need to pass the bill before it's reviewed by nonpartisan agencies, and of course, before people know what is in it.
The successful wlll do fine. Quite a lot of the money currently going to the failing rest of us will be redistributed to the rest of us. The process will gentle, imperceptible. No force will be involved; no cops will come to your door, with weapons drawn. In policy terms, I hope that makes us all feel better.
--Hiram
Donald Trump will never allow cuts to Social Security, Medicare or Medicaid, because he told us he wouldn't cut them during the campaign. And Donald Trump is a guy who fulfills his promises, right?
I did read an editorial in the Strib yesterday, that argued strongly that Donald Trump is keeping his promises, not that anyone has notice. Haven't we all noticed that our health insurance is covering more for less, and that it covers greater numbers of people?
Anon, Please make up a name a sign your comments. It helps us get a longer term perspective.
I guess I agree with the Strib if they were serious.
He is doing many of the things that he promised. At least the ones he has direct control of. (ie Jerusalem, Fewer Regs, Tighter immigration reqts, Reducing Fed land grab, etc)
As for healthcare, the DEMs solution of making certain citizens pay for the healthcare of other citizens isn't necessarily a great system either.
And giving people stuff for free has never worked very well to make better life choices. However I am a fan of making people pay higher premiums if they don't control their cholesterol, sugars, BMI, etc...
"As for healthcare, the DEMs solution of making certain citizens pay for the healthcare of other citizens isn't necessarily a great system either."
It's better than the system that was in place before the ACA. Get back to me when you have a plan that costs less and covers more.
DEMs solution of making certain citizens pay for the healthcare of other citizens isn't necessarily a great system either.
My favorite idea is that churches should pick up the cost of health care in America; that it should be funded from the weekly offerings.
--Hiram
My favorite idea is that healthy people are strongly pressured by society to make good life choices, have only the number of children they can afford, continuously learn and work hard so they can pay for their own healthcare and/or insurance.
What a creative idea...
Then everyone will be covered, live healthier and costs will come down.
Tax cuts don't have to be "paid for" because money belongs to the people who earn it, not to government. Of course, government doesn't have to balance its budget, either, which is a flaw in our Constitution that should be corrected. Once you decide you cannot keep piling up debt and have to set spending priorities, it gets a lot easier. And with entitlements taking up the majority of the spending, Pareto's law says that is where you have to go. Of course, if you allow for reform of these programs, you can get better results for LESS money. The failing of all government programs is insisting there is only one way to do something and nothing can change.
The problem here is that the GOP who claims to be fiscally responsible usually isn't. As the Zfacts graph shows, the tax cuts usually trigger big deficits.
Which means we get to "live large today" while passing the bill on to our children.
Just as the old folks have done with Social Security, Social Security Disability and Medicare. They kept their payroll tax rates low so they would have more in their pay checks. Therefore the "pension fund" is short funds to pay all the benefits. Maybe we should cut all those benefits by 25% immediately, so the people who under funded it don't get more than they paid in? :-)
Now you can complain about government spending all you want... However there is a reason why Trump promised to not touch SS, SSD and Medicare. They are very popular and effective.
The only problems they had were:
- the trust funds could only buy government bonds
- the "premiums" (ie payroll tax rates) were too low
- and/or the "benefits" are too generous considering the above issues
People do fiscally irresponsible things, and that's what drives the budget. They have children. They get sick. They grow old. They are unsuccessful. Those are realities of life, and government has very little to do with why they happen, and for incentive gurus, there is very little government can do to encourage or discourage people from acting differently.
The reason why Trump made the promises he did is because he is a demagogue utterely lacking in any kind of moral compass, who never dreamed he would have to keep them. He is the moral equivalent of Zero Mostel, the movie "The Producers" who sold ten thousand percent of a play on the theory that it would fail, and that no one would ever have to be paid. Well, he won, in a manner of speaking, and all the little old ladies are demanding their money. More than anything, that explains the president's increasingly hysterical behavior. He shares Zero's morality, unfortunately he lack's the man's panache. It remains to be seen whether he shares Zero's fate in the film.
--Hiram
Hiram,
I disagree with the following. If it were true we could greatly simplify and cost reduce our government.
"government has very little to do with why they happen, and for incentive gurus, there is very little government can do to encourage or discourage people from acting differently"
With respect to taxes, people talk about simplification, but in practice, they don't want it. That's things that complicate taxes also lower taxes. And it's a basic law of human nature, and financial literacy maybe, that people and lobbyists prefer cheaper taxes to simpler taxes.
People don't actually want to reduce government. Even Republicans only want to reduce what we spend on government, not government itself. Remember what government does. It's basically an insurance company with an army. Republicans don't want to reduce the size of the army, and they don't want to reduce what we insure. At least not in public. Some Republicans do have a more literal understanding of government, of course. Tillerson is laying folks off at the State Department. A business guy looks at stuff that way, but what the State Department costs is infinitesimal, especially in terms of what it produces, i.e. peace.
--Hiram
Something to keep in mind is the understanding of what government is that we are assuming, an assumption that didn't always prevail in our history.
We think of government it term of the money we spend. Nobody except Tillerson, when they talk about reducing the size of government talks about the number of employees. Government employment is in decline, especially relative to the size of the population as a whole. Instead when people talk about government, they talk about the amount of money that runs through it's accounts. As even Republicans argue, government is a redistribution of wealth scheme. When looked at from that perspective, government is the child who receives medicaid, or the retiree who receives Social Security. Reducing government means reducing that child or that retiree. Republicans don't actually want to do that, what they do want to do, is find ways not to think about the consequences of what they do want to do. That's why they issue one page position papers.
--Hiram
Where finance is concerned, the degree which fiction is persuasive, even remembered as fact is amazing. People really believe that tax collectors made appearances, possibly armed, that when considered rationally, seem implausible. And really contrary to ordinary experience.
Here is a discussion of an account from a South Dakota congress person recounting events that seem impossible but which surely in her mind, she remembers as having happened.
https://www.usatoday.com/story/opinion/2017/12/11/kristi-noem-poster-child-estate-tax-repeal-but-sad-tale-doesnt-add-up-chuck-collins-column/930472001/
Hirams USA Today Link
Hiram,
The cost of "normal keep our country safe and running government" has not been changed significantly for many decades. Even though many automation, communication, etc improvements have been developed since then in our modern world.
However the "big governmental insurance programs" sure have increased. Link 2
Excellent link. I have never understood the GOP view that a death should be a valid reason for a family to not pay one's capital gains taxes.
I would get rid of the "estate tax" and mandate that people need to settle up all of their capital gains taxes upon death.
"However the "big governmental insurance programs" sure have increased."
That's largely due to demographic changes and health care inflation, not that we've dramatically expanded the scope of such programs. In fact, most traditional "welfare" programs are less generous than they used to be.
I have never understood the GOP view that a death should be a valid reason for a family to not pay one's capital gains taxes.
I don't think they do. It's just a talking point.
Whenever a politician talks about "reform" is a good time to inventory the spoons. The fact is, nobody wants tax reform to any significant degree, they want lower taxes. Even the financially illiterate understand that.
--Hiram
It depends on your starting point. Since ~1965 the increases have been HUGE compared to our GDP.
Yes, it is true we spent less before Medicare and Medicaid. Great point.
These are interesting reads of how we went from being a "extended family" society where Grand Parents, Parents and Children cared for each other, to where we are today.
Medicare and Medicaid Milestones
SS History
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