Alternative Visions - ‘Trump Tax Cuts 2.0: Facts, Ideology & Consequences’ - 11.03.17

Dr. Rasmus dissects the just announced US House of Representatives’ version of the Trump Tax Cuts. The ‘tax cut shell game’ is explained. The main elements of the business tax cuts under the House proposal are described, including corporate rate, virtual ending of US multinational offshore taxation, retention of carried interest, inversions, and other business deduction tax loopholes. Personal income tax cuts targeting high end brackets, the AMT, Estate Tax, personal exemptions, carried interest and standard deductions provisions are reviewed.  How middle class households will pay for the corporate and high income household cuts are explained, including deductions elimination, elimination of credits, and coming cuts in healthcare (medicare-medicaid), food stamps, education, etc. to pay for it. House claims of $1.5 trillion hit to the budget is really at least twice that amount.  Discussion concludes with a critique of the ideological themes used by Trump/House (and ever since Reagan) to justify the cuts and sell them to the country: including the supply side economic nonsense that tax cuts create jobs, that they will be passed on to workers to raise wages, and will lead to greater economic growth and tax revenues, that US business pays the highest taxes in the world and can’t compete, and that the measures proposed amount to a ‘tax code reform’, not another tax cut for the rich and their businesses. (Next week: how Trump’s appointment of Powell means no change of the Fed’s policy of providing virtually free money to bankers and investors, and a continued subsidization of the banking system by the State).