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Thomas J Donegan
Thomas J Donegan
Born January 22, 1958 Graduated 1976 Lawrence County Vo-Tech U.S.Navy, 11/76 - 10/82 Cryptologic Technician M-branch Graduated 1989 Slippery Rock University B.S. Mathematics, minors: Philosophy, History U.S. Government 1990 -2001 Various private sector Electrical/Electronics jobs 2001- present
 

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Posted in Politics

Tax Plans, Deficits, and National Debt

Nov. 22, 2017 6:28 pm
Keywords: None


Treasury Secretary Steve Mnuchin was interviewed by Chris Wallace on Fox News Sunday on 19Nov2017; Mnuchin attempted to explain the Republican Tax plan(http://video.foxnews.com/v/5651797383001/?playlist_id=930909788001#sp=show-clips). Wallace begins by playing a clip of Nancy Pelosi - Democrat & House Minority Leader - asserting the Republican tax plan "gives a scrap tax-cut to the middle-class, throws a banquet for the wealthy - and asks Mnuchin to comment. Mnuchin, of course, does not agree with Pelosi, Mnuchin argues the 'tax plan is to encourage business, thus job growth and it provides a substantial middle-class tax-cut.' Wallace then cites the bi-partisan Joint Committee on Taxation (5 House members and 5 Senate members) to buttress Pelosi's claims, the committee claims "80% of cuts go to Corporations, Businesses and wealthy families." but Mnuchin explains that tax-cuts received by sub-chapter S small and medium-size businesses are being allocated - by the committee - to the wealthy... Wallace persists in attempting to get Mnuchin agree with Pelosi, the Democrats and the class of Politicians that hold to static-scoring of taxation and budgets.

Note that predominantly Democrats, but there are Republicans that embrace static-scoring i.e., projecting tax revenues as if an alteration taxation - which allows workers to keep more of their earnings - will not increase demand for goods and services, produce an expanding economy, and require more people in the work-force; such is the that utilize static-scoring of tax-policy... The static-scoring is favored by many because it is the best argument for the status-quo i.e., it allows senseless, but scary narratives about what dire consequence may occur if Government changes course...

What is scary - for Democrats - is a booming economy! Keeping people dependant upon Government - Obama's forte - is a selling point for Democrat Party relevance, and their cant of concern for the "little guy" (note how the Democratic Party abandoned the middle-class because they thought they could win without the middle-class; so much for their "concern."); it's not about the little guy, it's about appearing to care about the little-guy to obtain power; the little-guy, is their means to their end. It's all about Democrat Party power!

Aside: Static-scoring of a budget and taxation holds that if one reduced a tax rate e.g., dropping a rate from say, for example: 50% to 10%, the static scorer would argue the effect would be an 80% drop in Government revenue i.e., the static-scorer holds that the economy won't expand even though the people would have 40% more of their earnings to purchase goods, services, and to invest - causing an economic boom - such a boom will not happen, instead the GDP will remain essentially the same. A static-score is totally unrealistic, and yet both the Joint Committee on Taxation and "non-partisan" Congressional Budget Office utilize static-scoring to evaluate budgetary policies. Dynamic-scoring projects an expanding economy - requiring more employees (i.e., taxpayers) - from whence greater Government revenue is realized through more people contributing to "paying the bills" and fewer people in need of Government assistance. Stimulating economic growth through reduced tax rates is known as supply-side economics and was successfully employed by both President's John F. Kennedy and Ronald Reagan. Democrats like to cite Reagan's deficits as indication of failure of supply-side economics, but Reagan's plan nearly doubled Government revenue; Tip O'Neil (Democrat Speaker of the House), would not agree to move away from "base-line budgeting" (i.e., an automatic 11% annual increase expenditure for existing Government budgetary items) and reduce the Government program increases from 11% to 5-7% increases, and thus the deficits increased commensurately with Government spending... Reagan sought - unsuccessfully - to have a "line-item" veto be granted him by Congress; it would have allowed Reagan to make cuts to the budget as he thought proper... Such a veto became law under Clinton, but SCOTUS struck it down in 1998; the Courts said: "NO!"

Now returning to the Wallace interview of Mnuchin; Wallace is concerned with the possibility of increased deficits (Note that the doubling of the National Debt - under Obama - didn't seem to worry Wallace or any of the knuckleheads expressing such concerns today), and indicated that there is a projection for an exploding deficit an thus the tax-plan allows cuts for workers to expire after 10 years, but they have made business cuts permanent. Wallace asserts this shows the Republican plan is really about taking care of the rich, and the business owner. Mnuchin rejoined (note paraphrased): 'No Chris, we couldn't make business cuts temporary, because we are - through tax policy - going from worldwide system to a territorial system, and we cannot switch back (i.e., business needs to know future tax policy for planning purposes i.e., how to allocate for the sundry challenges to their business ) an international model.' Wallace persists in intimating Mnuchin isn't being "square" or on the level - tax-cuts for the "common-Joe/Josephine" expire in 2025, but Mnuchin says they will be extended in the future, but Wallace asserts that Mnuchin doesn't know that (i.e., the future), but Wallace - by implication does. Mnuchin, repeats that the budget is 'intended to advance business to grow the economy, create Jobs, create an environment-friendly to business, to increase investment in the American economy and create millions of jobs.' Mnuchin says that he and the Republicans think their plan will work, but if it doesn't (a response to Wallace asking: "What if it doesn't work?"), then the future Congress will act as is necessary... The Wallace asked about the Senate Bill eliminating the individual mandate regarding Obama-Care is a bargaining chip, or real. Mnuchin - and Trump - want the elimination of the individual mandate it to become law, thus it, not a bargaining chip...

Whether Mnuchin, the Republicans, and POTUS Trump enact the tax-plan this year, next year, or not at all, matters some, but eliminating base-line budgeting and static scoring needs to happen, so the discussion and actions, regarding funding of entitlements can take place before National bankruptcy renders such discussions irrelevant...

Thomas J. Donegan

guildma@msn.com

 
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