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Posts Tagged ‘Tax cuts’


President Donald Trump has proposed tax cuts for the rich and corporations, which is another way of saying Trump wants tax cuts for the rich and then more tax cuts for the rich. In other words, the person who will most likely benefit from the Donald Trump tax cuts is billionaire Donald Trump. The 99 percent will get virtually nothing. In other words, Trump’s tax plan is designed to create greater income and wealth inequality in a nation that already has the most income and wealth inequality among the industrialized nations.

You will note in the video above, while they make some good points about Trump’s tax cuts for the rich, the folks at MSNBC fail to mention growing income and wealth inequality because the Wall Street controlled Democratic leadership doesn’t want its station MSNBC to mention it any more than the billionaires who control the Republican Party want their news outlets to mention it. Currently, the rich steal anywhere from 24 to 38 percent of all income produced in the United States, compared to 8 percent in 1980. In addition, the richest 10 percent of Americans own more wealth than the bottom 90 percent, a historic and still growing record.

As corporations get tax cuts, much of those tax savings will go to the rich via higher corporate profits, rising dividends, and surging stock prices. The rest of us will suffer the consequences. In addition, of course, corporations will have more money to invest, supposedly to create jobs, as if giving corporations tax cuts will magically increase consumer demand. That’s not likely. So what will they invest in?

Historically, US corporations buy other corporations, especially rivals, when they receive tax cuts or higher profits. This, of course, creates redundancies in a variety of job areas, such as accounting and computer technicians. When mergers occur, employees are the first thing to go in order to eliminate those redundancies. Of course, to help pay for these mergers, jobs will be exported to low-wage nations and the difference between the higher paying US jobs and the new lower wage jobs in China, India and elsewhere will fuel corporate profits, and push up dividends and share prices. That’s what those free trade treaties have been negotiated to do, and Democrats, like Wall Street Senator Ron Wyden, are not stupid little boys and girls who are ignorant of this fact.

This is one of the reasons why there is not a shred of evidence that supply-side economics, otherwise known as tax cuts for the rich, has ever created a single job, but there is plenty of evidence tax cuts for the rich and corporations have destroyed US jobs. Under President George W. Bush, tax cuts were enacted for the rich, making certain that the growth in jobs and real wages were negative, the only time in US history that has occurred under a single president since Republican Herbert Hoover.

Naturally, there are other things the Republicans are refusing to mention.

Gary Markstein / Creators Syndicate

There will be an increased federal deficit of $2.5 trillion, which is typical under irresponsible Republican administrations and Congress, just like the Reagan years, and the other twelve years under the Bush presidents. Naturally, cutbacks in federal spending will be proposed.

Republicans and some Democrats will insist the US is not spending a sufficient number of dollars on its military, so that will not be subject to reductions. The US spends more on the military than the next 25 nations combined, 24 of whom are US allies, but clearly, that’s insufficient because US military spending is quite profitable. However, social security, Medicare, Medicaid, and other less profitable programs that help the politically powerless will be on the table for cuts if Trump’s tax cuts for the rich sails through Congress.

The rich, of course, have stolen just about all real income and wealth increases over the last thirty-five years, thanks to their financial abilities to corrupt both major political parties and the federal government in the process. Naturally, their dirty money has also corrupted most state and city governments. So, obviously, the financial and political deck is completely stacked against the 99 percent.

Luckily, the Democrats in the US Senate will object to this irresponsible behavior because the billionaires of Wall Street who control the party will object to it. That’s the only reason why Democratic senators like Ron Wyden will likely oppose the legislation. Even some Republicans may oppose Trump’s tax plan because it is completely against the national interest, that is if one assumes the citizens of the United States who make up 99 percent of the population are a part of that national interest.

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President Donald Trump is proposing more tax cuts for the rich. He claims there will be no loss of federal revenue with his tax cuts. This is the standard Republican Party Establishment lie.

Given that Trump’s plan is similar to what Trump proposed on the campaign trail, the Committee for a Responsible Federal Budget (CRFB) did a rough cost estimate of his latest ideas and concluded they could cost $5.5 trillion in lost revenue during the first decade.

CRFB estimates the overall cost could go as high as $7 trillion if limits on tax breaks that the plan suggests apply only to high earners. Or the cost could fall to $3 trillion “assuming credits and exclusions are eliminated as well as deductions.”

This means sharp cuts to programs the middle class and poor need, while, no doubt, keeping welfare programs for the rich, such spending more on the military than the next 25 nations combined, 24 of whom are US allies. Corporate subsidies are also welfare for the rich since they help keep corporate profits and the stock market bubble growing, all of which mostly redounds to the rich.

Oh, and we can’t forget the next biggest lie; tax cuts for the rich trickles down the the 99 percent in the form of jobs. There is not one shred of evidence that giving tax cuts to the rich has created a single net job. There is plenty of evidence, on the other hand, that tax cuts for the wealthy have destroyed millions of US jobs.

That’s because the rich usually invest their tax cuts gains in the stock, bond and political markets. They buy up politicians by the barrel full and then have their politicians pass legislation that will keep inflating their stock, bond and housing bubbles, which means exporting millions of jobs overseas and then redistributing the difference between the old higher US pay and the new lower third world slave labor pay to the rich via higher corporate profits, surging stock and bond markets, and rising dividends.

In the meantime, due to the reduced tax revenue, our roads and bridges will continue to crumble, our public schools will continue to be financially gutted, the cost of entering a public park will continue to rise, the unemployment rate will rise, and so on and so forth.

Don’t be fooled by the same lies President Ronald Reagan and Dick Cheney and Arthur Laffer fed us. Tax cuts for the rich will not pay for themselves, nor will they create jobs, but they will corrupt your government more, and it is already the most corrupt in the developed world. Both major political parties are corrupted to the core.

 

This suggests that any working class concerns addressed by Trump during the campaign has been rendered moot. Trump, in other words, is now completely owned and 100 percent influenced by Wall Street and the Republican National Committee and their corporate owners.

By the way, a story in Newsweek puts it a little less scary than I. “‘…while major tax cuts have been enormously beneficial to the wealthy by reducing their taxes and increasing their incomes the most, the distribution of benefit for working people has been comparatively negligible. That is not the argument of some liberal politician—it was the finding of Martin Feldstein, the chief economic adviser to President Ronald Reagan, in his analysis of the Tax Reform Act of 1986.'”

Feldstein, in other words, said the creation of jobs by tax cuts for the rich “has been comparatively negligible.”

Click here for the full Newsweek story.

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Several days ago, Donald Trump announced he had successfully negotiated with United Technologies, parent corporation of Carrier Corporation, to keep “1100” of the 1700 Indiana jobs about to be exported to Mexico. Trump had vigorously campaigned against exporting US jobs, but isn’t that primarily what US negotiated trade agreements are all about? Precisely!

Trump promised during his campaign that he would tax US corporations that exported jobs, and then shipped their products made in other nations to the USA.

When push came to shove, Trump backed down on his promise like a scared nerdy kid against a gang of bully thugs. Trump offered tax cuts, equivalent to giving up the nerdy kid’s lunch money, rather than tax increases. In other words, United Technology executives got away with extortion.

Worse yet, Trump must have known he’d been spanked, so he exaggerated the number of jobs he’d negotiated to save. For $7 million in tax breaks, Trump saved 730 jobs, not the 1100 he’d claimed a week ago.

According to the Washington Post,

“Trump had pledged to save the plant’s jobs, most of which were slated to move to Mexico. Then the businessman won the election, and the 1,350 workers whose paychecks were on the line wondered if he’d keep his promise.

Chuck Jones, president of the United Steelworkers 1999, which represents Carrier employees, felt optimistic when Trump announced last week that he’d reached a deal with the factory’s parent company, United Technologies, to preserve 1,100 of the Indianapolis jobs — until the union leader heard from Carrier that only 730 of the production jobs would stay and 550 of his members would lose their livelihoods, after all.

In exchange for downsizing its move south of the border, United Technologies would receive $7 million in tax credits from Indiana, to be paid in $700,000 installments each year for a decade. Carrier, meanwhile, agreed to invest $16 million in its Indiana operation. United Technologies still plans to send 700 factory jobs from Huntington, Ind., to Monterrey, Mexico.”

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15 dollars

People earning the federal minimum wage of $7.25 aren’t going out to eat at restaurants because they can’t afford to do so. That’s pretty much true for those who make higher state minimum wages of nine and ten dollars an hours. These people are not taking yoga, piano, or karate lessons. They don’t belong to gyms, and they don’t take part in yoga classes. They purchase few if any new books, and buy clothes at second hand stores, like the local Goodwill. They don’t buy flowers for their mother’s on mother’s day. They’re not purchasing new computers, cameras, tables, chairs, carpets, washing machines, dryers, I-phones, cars, organic food, or houses. They’re not buying a lot of other things.

What good are these people to the economy, other than to provide rich people with cheap labor? Like the idle rich, minimum wage workers barely stimulate demand for goods and services.

What do low wages have to do to with rich people? Low wages boost profits. As a consequence of that, corporate dividends and share prices go up. People who earn less than $100,000 a year own hardly any shares of corporations. The primary beneficiaries of people working at minimum wages go primarily to the rich.

If you raise the minimum wage to $15 an hour, the people who benefit from this raise will be buying a lot of the things listed above and more, even a house in Detroit, Michigan, and elsewhere, as well.

And all of a sudden, not just large businesses, but small businesses thrive because demand for goods and services is stronger.

Studies over the last fifteen years show that the idea that high wages weakens employment is a myth.

There are two fundamental laws of capitalism. One is something about supply and demand, which is often rigged in favor of those who believe and act upon the golden rule; he who has the gold makes the rules. The other rule, which Henry Ford (the founder of the Ford Motor Company) believed was simple: When people have more money, businesses have more customers, and need more workers.

This explains why the current economic expansion is the worst since the Great Depression in virtually every category having to do with jobs, wages, GNP, and the things that are important to 99 percent of the US population.

Currently, 1 percent of the population has rigged the economic and political games over the last thirty-five years to the point where they have received a legislatively determined 95 percent of all income growth since 2009, the most ever on record. Worse yet, the rich steal 37 percent of all income produced in the United States nowadays, and that figure is growing, and with no end in sight. Rich parasites will soon be larger in terms of total income than their hosts, the 99 percent.

Ever wonder why the economy under President Jimmy Carter produced more jobs, raised wages, and had greater GNP growth on average than any year of the last fifteen with an economy that was ½ the size of today, and with a population that was 60 percent the size of today? The answer is simple.

Back then, the rich only stole 8 percent of the annual income produced in the United States. That means the rest of us earned 92 percent of all the income created in the USA, which meant demand for goods and services was far more plentiful then than today, job growth was greater, and wages for the 99 percent also rose. Under Carter, the economy created 225,000 jobs a month. Over the last fifteen years, 90,000 has been hailed as an outstanding achievement by President George W. Bush, as well as President Obama.

Something clearly is out of whack with the economy, and yes, most of it has to do with the massive corruption of the US government that was unleashed by the Reagan tax cuts. But if income can be massively redistributed from the 99 to the 1 percent, as it has been for the last thirty-five years, then the government can act to redistribute it back to where it belongs, and all for the good of the economy. This can partially be achieved by raising the minimum wage to $15 an hour by 2017.

And don’t tell me corporate America doesn’t have the money. Currently, they’re sitting on 7-8 trillion dollars inside the US, while holding another 7-8 trillion outside the US, because the demand for goods and services is so low they have no reason to invest it in new plant and equipment so as to increase production, which would require workers.

You can go back 150 years and literally find the same people shouting over and over again on behalf of their rich patrons saying the same thing, “If people on the bottom get paid more, it will be bad for them, and they will lose their jobs.” That’s just a polite way of saying, “My patrons and I are rich, you’re poor, and my boss and I want to keep it that way. And besides, it’s good for Wall Street.”

The fact that corporations are sitting on trillions upon trillions of dollars because demand is slack shows the opposite is true. Every one of those trillions of dollars could be used to create jobs if only the demand was there. The years between President Franklin Roosevelt and Ronald Reagan also show the same thing.

If you pay people more, they will purchase more, and everybody will be better off, not just a few politically powerful people. Those trillions of dollars will be used to invest in the production of goods and services. Those trillions also show that US corporations are quite capable of paying their employees more, and not just the already rich CEOs.

That’s why it’s long past time to raise the minimum wage to $15 an hour. Besides, if the minimum wage had kept up with productivity (or real inflation) over the last 56 years, the US federal minimum wage would be nearly twenty dollars an hour.

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When the government increases taxes on the rich, they have less money to purchase politicians, which means government can pretty much follow policies the majority of voters want, such as creating jobs by spurring the demand for goods and services. Minnesota’s next-door-neighbor is Wisconsin. Governor Scott Walker slashed the state’s budget and programs in order to make room for millions of dollars of tax cuts for mostly out-of-state billionaires and millionaires. The result was a decrease in demand for goods and services and nearly last in the nation in job creation.

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Knowing the truth can set you free. Knowledge of the forces that constrain you is the first step toward achieving freedom. Great spirits always encounter violent opposition from mediocre and bought off mouths and minds.

So here’s economic myths numbers four and five.

4. Myth: Free trade is good, but only if you’re rich.
Fact: International income redistribution agreements are falsely marketed as free trade agreements. These agreements are perhaps the biggest reason why the 99 percent receive only 66 percent of the income created in the United States nowadays, compared to 8 percent.

5. Myth: The United States is a democracy in which all the people are represented.
Fact: The United States is a plutocracy, which is a government of the rich, by the rich, and for the rich. At times in the past, the USA has had a national government that represented most of the people, but never all of the people. When this has occurred the rich only received 8 percent of national income. Today the rich steal 36 percent of the total national income.

In other words, income distribution is solely linked to political power. Whosoever has the gold makes the rules.

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Why do we have so much inequality of income and wealth today? The Reagan tax cuts unleashed billions of dollars into the political markets on behalf of the rich. The result has been massive corruption in government in all three branches, and both major political parties are now train wrecks of corruption. The result is large numbers of legislation and international income redistribution agreements falsely label trade agreements. These agreements are designed to redistribute income and wealth from the 99 to the 1 percent. That’s why and how the 1 percent steal over 36 percent of the income people produce in the USA yearly, compared to 8 percent in 1980. That’s also why the economy is historically weak.

The Trans Pacific Partnership (TPP) is the latest scam being pushed by the 1 percent through their President Barack Obama, as well as Wall Street Senator’s Ron Wyden, Orrin Hatch and Mitch McConnell. Among other things, the TPP will:

* TPP will give incentives for US corporations to export millions of US jobs. The Federal Reserve estimates that 28 million US jobs were exported between 1990 and 2010.

* TPP will increase US income and wealth inequality. The 1 percent have already taken 95 percent of all income growth in the United States since 2009. When the above jobs were exported, the difference between the old higher US wages and the new lower wages will go straight into the pockets of the 1 percent via higher corporate profits, rising dividends and surging share prices.

* Those lost jobs will no longer be paying the taxes for our infrastructure, social safety nets, schools, fire and police, but those lost jobs will push the stock markets higher.

* TPP will effectively eliminate your voting rights on local and state issues since it will unconstitutionally grant investors of the 0.01 percent special privileges to challenge labeling and health and safety local laws and regulations of the 99 percent, which most people call voter suppression, but in this case it should be called voter elimination,

* TPP will offer new monopolies for Big Pharma to raise medicine prices they charge you (which redistributes income from the 99 to the 1 percent),

* TPP will limit food safety standards (which redistributes and transforms your health into the profits of the 1 percent),

* TPP will block financial regulations aimed at preventing the next financial crisis (which will make it easier for Wall Street to redistribute your income and wealth to the 1 percent).

* TPP will destroy millions of jobs in Latin America (230,000 in the textile industry of El Salvador alone) forcing millions of undocumented immigrants into the United States.

* The result of the above will be to depress wages in both North and South America, all to the benefit of the 1 percent, and all at the expense of the 99 percent.

* And we can’t forget that TPP will increase the already massive US trade deficit with other nations, which is supposed to be a bad thing. The exported jobs will be producing goods overseas rather than here, and then US corporations will export their products from China and Vietnam into the United States, exacerbating the current trade deficit.

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