On the campaign trail, Trump promised a litany of achievements he would make in the first 100 days of his presidency, if he was elected. Among them were killing the Trans Pacific Partnership agreement, rolling back Obama’s actions on climate change, appointing a Supreme Court Justice to replace Scalia, labeling China a currency manipulator and taking punitive action against them on trade, building the wall, repealing and replacing Obamacare, and passing a trillion-dollar infrastructure program and huge tax cuts.
He literally put these pledges in writing, calling them his 100-day “contract” with voters. Now, with the 100-day mark rapidly approaching, the White House is trying desperately to spin Trump’s effectiveness as a president, claiming huge progress in delivering his pledges to the public, or at least that portion of the public that wanted him in office.
That 100-day list is starting to look more like a “to do” list, with perhaps only about 10 of his 38 pledges having seen any progress whatsoever. Yes, the TPP is toast. Yes, we have a suitably anti-consumer Justice set to coddle the powerful and crap on the public for what will likely be a long tenure on the bench – I’m talking dog years long. Obama’s climate actions will be under attack for the foreseeable future, of course, given Scott Pruitt’s status as the climate-denier-in-chief at the EPA, and an attack on Dodd-Frank financial regulations meant to prevent another financial meltdown is under way.
But almost all of Trump’s legislative priorities have stalled or seen no action. Repeal and replacement of Obamacare was a bust that didn’t even go to a vote, because it was lacking support from the party that proposed it and controls both chambers of Congress. Go figure. To be frank, most of the items Trump has delivered on already are on executive orders, many of which have essentially no legal effect and are more in the nature of vague, toothless directives. Any big lifts will require Congressional action, and it seems that Trump has been unable to navigate the various factions of his own fractious party, let alone figuring out how to deal with Democratic opposition.
In the crosshairs, now that the 100-day mark is nigh, is a push for tax reform. This will be a true test of Trump’s effectiveness as a president – or his lack thereof.
Although he could very well try to truly revamp the tax code, with a combination of targeted cuts and increases so as to make the bill fiscally responsible in some measure, he is by all accounts going to try to go the traditional Republican route and simply try to move forward with a series of drastic tax cuts, offset by no new revenue, which will likely explode the budget deficit. Think of the Reagan tax cuts on steroids.
He has proposed cutting the corporate tax rate from 35 percent to 15 percent – a move that the nonpartisan tax Policy Center believes will cause the deficit to rise by 2.4 trillion dollars over the next decade – literally enough to pay for his infrastructure promises twice. Secretary Treasury Steve Mnuchin said of the Trump proposal that he was confident that Trump would arrive at a plan that would “pay for itself” with increased productivity.
This should make any intelligent person with an inkling of knowledge about supply-side economics groan with frustration. Every time that the Republicans propose or pass a tax cut for the rich, they say it will stimulate the economy so much that the added economic activity and revenue will make up more than enough tax revenue to make cuts pay for themselves. These Republican schemes always “pay for themselves” based on assumptions about growth that never occurs. I’ve already written a lengthy analysis of this issue on this blog. Go ahead and read it, I’ll wait.
This never works. It’s voodoo economics.
All of the talking points surrounding the Trump plan are demonstrably false. Whereas the White House says that we have one of the highest corporate tax rates in the world, the fact is that very few corporations actually pay at the top rate of 35 percent. After deductions and tax credits, the typical corporation pays an effective tax rate of 27.9 percent. The average rate of corporate taxation in advanced nations is around 27.7 percent. We’re right in there. All a massive cut will do is starve the country of revenue, making it hard to do all the things that government needs to do to maintain the quality of life we have now.
Since none of the Trump team is in any position, knowledge-wise or policy-wise, to draft meaningful tax reform, you can bet that task will be outsourced, and that any eventual bill will have Paul Ryan’s fingerprints all over it. And in typical Ryan fashion, you can bet that the 2.4 trillion it will cost to give the elite that tax cut will be paid for, if at all, by huge cuts in programs for the poor, or effective tax increases on the middle class. Republicans are already looking at predictably shitty ways of doing this, such as eliminating pre-contribution tax breaks on 401k contributions, or elimination of the tax deduction for home mortgage interest. Both will result in the great majority of working Americans busting their asses just to pay their bills paying for more needless tax cuts for the rich, who are already masters of tax avoidance.
The promise that there will be enough new revenue to make up for the cost of these welfare programs for the ultra-rich is, to put it as kindly as possible, fucking bullshit of the worst order. Ronald Reagan and George W. Bush both cut taxes, and both ended their presidencies with huge budget deficits. Supply side economics doesn’t deliver that way, and we know this from experience. Over and over again. Can you guys please come up with some other way to sell us the same poison you’ve fed us over and over?
Oh, right. The White House says corporations will use the extra profits they get from the tax cut to invest in more capacity and jobs. Yeah, that’s not going to happen either. When you boost corporate revenues through tax cuts, that doesn’t cause consumers to go out and buy more goods and services that kick up demand and result in new jobs. Never has. What’s going to happen is that they will simply use that money to repurchase their outstanding stock on the market, or swallow up other companies, to raise their own stock prices. Corporations are not in business to give back. They are in business to take.
It’s up to us to keep them from taking it all. This is not the way to go, and you should be screaming it at your legislators.