William Murchison thinks The Wall was a ridiculous, unserious notion, analogous to Sanders' great, gooey slices of socialist pie in the sky

Here in The American Spectator:

Donald Trump, it could be argued, made the political environment safe for over-the-top declarations, e.g., he was going to wall off Mexico from the United States and make Mexico pay for the wall. I am not sure anyone outside the Trump bedroom ever took such a ridiculous notion seriously. It was an attention-grabber.

Mr. Murchison lives in the afterglow of a Reagan revolution which he thinks makes new schemes like Social Security and Medicare permanently unthinkable to the American people.

There are no lost causes because there are no permanent victories.

Kevin Williamson asserts but does not prove that conservatives have made peace with New Deal economic nationalism

Here.

Williamson simply presupposes that there is a coherent Trump program to sign up for, not to mention that there was a coherent Obama program, neither of which is true. Lots of Republicans have "made peace" with Social Security, but that doesn't mean they have become New Deal ideologues. Williamson ignores their political pragmatism, and Trump's.

The essay is otherwise interesting. He might have added Reagan to his so-called new nationalist "Roosevelt-Obama-Trump model", but not wanting to inflame too much is understandable given his recent history:

"Conservatives have a conflicted view of government. Many who revile FDR as the root of all welfare-statist evil revere Ronald Reagan, who insisted all his life that he was an FDR Democrat whose former party had simply gone insane."

Yes, Reagan was confused. Hence his movement, and Williamson.

That idiot Republican Judd Gregg of New Hampshire thinks Woodrow Wilson changed America for the better

He's also the idiot who wrote the TARP bailout.

And now he's the idiot who blames the Baby Boom for the programs bankrupting America: Social Security and Medicare, which pre-date it and were passed by spendthrift Democrats.

Here.

How to tax the rich and only the rich as originally intended in 1913, and solve a lot of problems

In 1913 when the average Joe made about $800 a year, the first income tax under the 16th Amendment didn't worry him because he didn't pay it and probably thought he never would. The personal exemption for a married couple in the original tax code was $4,000.

Today that $4,000 personal exemption adjusted for inflation using the Consumer Price Index amounts to about $100,000.

Even in 2016 that kind of income is made by fewer than 10% of individual wage earners. Under the original income tax of 1913, 90% today wouldn't have to worry about paying the dreaded income tax either.

Is there a way to return to this golden age of taxation?

I'm here to tell you that I think so, and I say that as a conservative. We could easily simplify the tax code by returning to the status quo which prevailed before the First World War, pay all the bills, abolish Social Security and Medicare taxes, the corporate income tax and all the other little irritating taxes and reduce income inequality in the process. We'd also save a lot of time and money wasted in complying with the tax code's myriad baroque features.

Here's the math.

In 2016 according to the Bureau of Economic Analysis personal income in the United States was $15.9287 trillion.

Social Security's Office of the Chief Actuary tells us that in 2016 there were 163.5 million individual wage earners. If you exempt the first $100,000 of everybody's individual wage income in 2016, including from the rich, you're talking about $6.213 trillion of individual wage income which would be tax-free.

That leaves $9.7157 trillion of personal income left in 2016 to tax, to pay all the bills.

According to The Tax Policy Center, the bills were the total estimated federal outlays of $3.9513 trillion in 2016.

So, the tax is 40.67% (9.7157 X .4067 = 3.9513) on all personal income in excess of $100,000 a year, no itemized deductions, no credits of any kind (this is where they all came from in the first place, because the rich pissed, moaned and complained and bribed the politicians to carve out privileges for them to escape paying).

The rich, all 14.9 million of them, will still have $7.2544 trillion to play with ($1.49 trillion from their first $100K tax-free, just like everybody else, and $5.7644 trillion left over after taxes from the income in excess of $100K).

The rest of us, 148.6 million, won't pay any federal income tax, Social Security or Medicare tax, gasoline tax, or any other kind of federal tax on our $4.723 trillion. The only taxes we'll have to pay will be State and Local Income Taxes, property taxes, sales taxes and the like. Of course rich people will have to pay those too, but that's a problem for all of us and for a different level of politics.

I summarize:

$15.9287 trillion personal income 2016 (BEA)

-  3.9513 trillion federal taxes, all from those making $100,000+ per year @40.67%

-  7.2544 trillion left over for the 14.9 million making $100,000+ per year (top 10%)

-  4.7230 trillion left over for the 148.6 million making less than $100,000 per year (bottom 90%)

___________________________________________________________________

0

And the budget balances.   

America's three middle classes accounted for 56.5% of total 2016 net compensation of $7.627 trillion

The lower classes accounted for only 13.6% of the total net compensation in 2016 and the upper classes for 29.9%.

The three middle classes are composed of almost 74 million individual wage earners in 2016, representing 45.1% of the total 163.5 million receiving W-2s in 2016. There are about 40 million individual wage earners in the lower middle class, about 22 million in the middle middle class, and about 11 million in the upper middle class.

Just over 80 million individual wage earners, about 49.3% of the total, made less than middle class incomes in 2016, that is, less than $30,000 annually.

Just over 9 million individuals made upper class incomes, that is, above $125,000 annually.

The upper class is just 5.6% of the total work force but makes almost $2.3 trillion of the net compensation.

The tax farmers eye the middle income classes because that's where the bulk of the money is to be harvested, about $4.3 trillion in 2016.

The lower classes, again almost half of the wage earners, account for only just over $1 trillion of the net compensation in 2016.

W-2 data isn't the whole story of income in the United States but is probably the most accurate snapshot indicating what's what and who's who for the "Why me, Lord?" question those who struggle for the legal tender ask themselves every April 15 or thereabouts.

Chris Jacobs for The Federalist favors the status quo on Medicaid in exchange for Obamacare repeal

It's uncanny how similar Chris Jacobs' overarching point is to the one we expressed here in June when we said that the status quo ante Obamacare was not the way forward, and that the way forward involves getting a buy-in from moderates and liberals on reform, but not repeal, of the Medicaid expansion in exchange for repeal of Obamacare root and branch.

The difference is in solving the funding problem. Jacobs admits his plan precludes "repealing all of Obamacare’s tax increases." Our idea doesn't, in exchange for a broadly based Medicaid payroll tax to democratize the costs. 50 million participants in the small group and individual markets are bearing the burden of funding "health insurance" for the poor, i.e. Medicaid, through grossly more expensive premiums and deductibles than before Obamacare.

As others have observed, the growth of the uninsured post-Obamacare is in this group because they can't afford it anymore.

The way forward is a compromise which keeps the Medicaid expansion, funds it fairly, retains state control of the program (federalism) just as now, and repeals Obamacare. 

Jacobs, here:

In both the House and the Senate, debate focused on a push-pull between two competing issues: The status of Medicaid expansion in the 31 states that accepted it, and what to do about Obamacare’s regulatory regime. During the spring and summer, congressional leaders attempted messy compromises on each issue, phasing out the higher federal match for Medicaid expansion populations over time, while crafting complex processes allowing states, insurers, or both to waive some—but not all—of Obamacare’s regulatory requirements.

But rather than constructing substantively cumbersome waiver arrangements—the legislative equivalent of a camel being a horse written by committee—Occam’s Razor suggests a simpler, cleaner solution: Preserving the status quo (i.e., the enhanced federal match) on Medicaid expansion in exchange for full repeal of Obamacare’s insurance regulations at the federal level.

A “grand bargain” in this vein would give Senate moderates a clear win on Medicaid expansion, while providing conservatives their desired outcome on Obamacare’s regulations. 

Your mortgage interest deduction is only eighth in the latest list of top things on which government claims it loses revenue

But libertarians especially hate it. Expect more articles telling you it's got to go as tax reform talk heats up in Congress.

Here are the top 20 "tax loss expenditures" for 2016-2020:

1.  Exclusion of employer contributions for health care and insurance: $863 billion

2.  Lower tax rates on dividends and long term capital gains: $678 billion

3.  Income made by controlled foreign corporations: $587 billion

4.  Contributions made to IRAs and 401k plans: $584 billion

5.  Pension plan contributions: $424 billion

6.  Earned Income Tax Credit: $373 billion

7.  Deductions taken for state and local income taxes, sales taxes, property taxes: $369 billion

8.  Deductions taken for mortgage interest on owner occupied homes: $357 billion

9.  Obamacare "subsidies": $327 billion (what a laugh: they raise the cost, give you a subsidy, and count the subsidy as a tax-free gift)

10. Child tax credit: $271 billion

11. Expensing depreciable business property: $248 billion

12. Deductions taken for charitable contributions: $231 billion

13. Social Security benefits: $214 billion

14. Municipal bond income: $195 billion

15. Deductions taken for taxes on real property: $180 billion

16. Capital gains taxes excluded at death: $179 billion

17. Medical expenses and over the counter medications under cafeteria plans: $169 billion

18. Capital gains taxes excluded on sale of principal residence: $166 billion

19. Life insurance proceeds: $128 billion

20. Deduction for income from domestic production activities: $102 billion.

Total revenue the government claims it's "losing" because of its "benevolent" tax policy on these items: $6.645 trillion over five years, or $1.329 trillion annually.

My, how nice of them. 

Ted Cruz concluded Mitch McConnell is a liar in 2015, now Ron Johnson appears to be doing the same

The Ted Cruz incident with McConnell involved the Export-Import Bank (story here).

Now, Ron Johnson is reportedly concluding McConnell committed a breach of trust by privately telling moderate senators that the Medicaid cuts in the healthcare bill won't actually occur, as reported here.

The current Republican bill in the Senate appears dead as four senators in the Republican caucus have said they don't support it. With a 2-seat majority, only 3 defections are tolerable (the tie-breaker vote is cast by the Vice President, Mike Pence).

When all is said and done we might find out that the loss of support is all intentional and orchestrated in order to save the Senate from having to vote on the issue again at all. The nay-sayers may be handsomely rewarded at some future date while getting to please their constituencies.

Remember, Republicans generally don't believe in anything except for what is. In other words, maintaining the status quo is their objective. They are pragmatists who are willing to accept progressive creations once passed, like the income tax, Social Security, Medicare and now Obamacare, and will defend those programs no matter how they became law.

Lighting their hair on fire for anything is completely out of the question, including for the constitution.

The only thing that will save us now is a meteor strike on the Senate chamber while they are all in session.

Have you noticed that all the dumb ass conservatives in talk radio have stopped talking about this number?

And it's not because they have finally come to understand what this number means. No, it's because they have a different president now, and they're not going to beat him over the head with it.

That's all.

Hey Rush, 94.8 million people not working but still eating! Take the food away! Kids in high school and college and retired people on Social Security have no right to eat if they're not working!

Dumb ass.

If Trump wants to win on Obamacare, he should propose a Medicaid tax in exchange for repeal

If Trump wants to win on Obamacare, he should propose a Medicaid tax in exchange for repeal of Obamacare's individual and corporate mandates instead of the stinker bill now being proposed by the Republicans in the Senate.

That way those of us who can obtain real insurance like we did before will obtain it again but at a cheaper cost than now, and those who can't will still have Medicaid, but funded by dead certain payrolls instead of the hodge podge of state and federal funding now.

Because of Obamacare, those who have insurance are subsidizing at enormous expense to themselves those who have become covered since 2009 under the plan, mostly under Medicaid. Medicaid alone has swelled by 25 million people thanks to Obamacare. It's a massive income redistribution scheme from those who have insurance to those who don't, which is manifestly unfair. There are easily 48 million people in this country making less than $15,000 a year who have no skin in this game yet qualify for Medicaid.

The answer, short of returning to the status quo ante where millions are kicked off of Medicaid, is to make more people pay their fair share. This means taxing every dollar of compensation with a Medicaid tax, just like we do with Medicare. The burden should be born by everyone, including those now receiving Medicaid.

Currently we have about 55.5 million enrolled in Medicare, supported by a 1.45% payroll tax. It isn't enough support, but there it is.

Medicaid on the other hand has exploded under Obamacare to coverage of 75 million, but state budgets, like individuals' budgets under Obamacare's outrageously expensive health insurance, are breaking badly under the burden. 33 will fall short of revenue targets in the current fiscal year.

The proportional Medicaid payroll tax rate implied by 75 million program participants is at least 1.95%.

This is Trump's opportunity to put Medicaid on a sounder footing.

Republicans won't like this plan because it involves a new tax, even though many people are already paying this tax to one degree or another depending on their tax obligation in their state of residence. The revenues, insufficient as they are, are already collected at the state level, but variably.

So it's not really a new tax. It's a new collector.

Democrats ought to love this idea, for the obvious reason. It codifies the nation's "obligation" to the poor's healthcare in the form of a tax, just as Medicare codifies the nation's obligation to the elderly's healthcare. With it they can claim Obamacare is still the law of the land in some form.

Pelosi and the House Democrats are well positioned to deliver this in the form of a bill to send to the more evenly divided Senate because Paul Ryan and a coalition of 75 or so liberal Republicans could get it over the goal line, just like they did so many times before in league with the Democrats, making an end run around the House conservatives.

The Senate would go for the bill because it is simply more liberal all around. Democrats there would vote for this, along with liberal Republicans.

Trump needs to get this done and off the table.

We've been arguing about it now in earnest for 8 years already and are just plain sick of it.

Enough already!

Repeal Obamacare root and branch, and institute a Medicaid tax.

Governments often raised funds with lotteries in the past, but how about $7 trillion in FY2017?

I don't think so.

Lotteries started to fall out of favor after 1830, according to the story here, mostly due to corruption. The guys running the things would run off with the dough. So much for the golden age of the past.

Government at all levels in the US will shell out $7.04 trillion in fiscal 2017, 36.5% of GDP.

In 1817 the number was in the neighborhood of $23 million, about 3% of GDP.

The problem with raising revenues today is only a problem because government is too damn big. Spending 3% of GDP today on government at all levels compared with current outlays means they are twelve times the size they should be, $7 trillion instead of $0.6 trillion.

Besides, you couldn't possibly raise enough using lotteries. In fiscal 2014 lottery revenues countrywide barely totaled $70 billion, just 1% of current total outlays.

Every man, woman and child in this country would have to purchase at least $21,757 in lotto tickets this fiscal year in order to fund government at all levels. And that's before any jackpots are paid out, or lottery workers paid.

Or we could just tax everyone that much.

It would be easier and fairer, right?

After all, we're all "equal".

Except 60 million Americans don't make even that much. If government took it all what would they live on?

Hope, no doubt.

On Hannity with Mark Simone, Stephen Moore just said we still have 94 million Americans "of working age" still out of work

There's a statement which is utterly false, and should end Steve Moore's credibility as an economist forever, but it won't.

The metric measures everyone aged 16 and older who is not in the labor force, the vast majority of which are not in the labor force for very good reasons.

For one example, young people in high school, college and graduate school are included in this number. In 2017 they number about 37 million people.

For another, in March 2017 another 45.7 million were over 65 and getting Social Security. In other words, retired.

Together that's nearly 88% of the current 94.4 million "not working".

That leaves 11.7 million "not working", some of whom are disabled receiving Social Security but some disabled are still working, trying to lead productive lives despite their handicaps.

Typically the rest are homemakers, who are trying to make sure their kids aren't rotten like yours.

George Mason University should take away Steve Moore's MA in economics, if you ask me.

And even if you don't.

Middle class according to Pew Research Center is just trying to make everyone feel better

MarketWatch here says that Pew estimates middle class household income for a family of 3 at between about $35,000 and $105,000 for 2011.

To understand how too liberally defined that is, consider that in 2011 almost 60% of individual wage earners made $35,000 or less . . . about 91 million wage earners out of 151 million.

Actually the middle third of all those paycheck earners, 50 million, made between just $15,000 annually and not quite $40,000, the average of which is about $27,500. Make over $40,000 and you were already in the top third of individual wage earners that year.

A couple making $27,500 can survive in this world, but it wouldn't have been able to buy the median priced home of $225,000 in 2011. Just financing that without a down payment, an impossibility, at the average 30-year rate of 4.5% in 2011 would have meant 50% of income going to principal and interest.

Putting 10% down would drop that to 45% of income, still hardly affordable. And who do you know making $27,500 with $22,000 saved for a down payment on a house?

They'd be renting, most likely, and not yet solidly middle class.

In 2016 the average median sales price of a home in the US soared to nearly $314,000, putting the American dream even farther out of reach than ever before for the majority.

Krauthammer thinks Trump might go for single payer in the end, in which case Americans should get it, good and hard

Think of it as socialism with Republican characteristics.

Krauthammer, here:

Obamacare may turn out to be unworkable, indeed doomed, but it is having a profound effect on the zeitgeist: It is universalizing the idea of universal coverage.

Acceptance of its major premise — that no one be denied health care — is more widespread than ever. Even House Speaker Paul Ryan avers that “our goal is to give every American access to quality, affordable health care,” making universality an essential premise of his own reform. And look at how sensitive and defensive Republicans have been about the possibility of people losing coverage in any Obamacare repeal. ...

As Obamacare continues to unravel, it won’t take much for Democrats to abandon that Rube Goldberg wreckage and go for the simplicity and the universality of Medicare-for-all.

Simplicity? Draco's laws were simple. The penalty for every crime was death.

I wonder if Krauthammer has a clue what he's talking about.

Total Medicare outlays in 2015 came to $632 billion.

Total Medicaid outlays in 2015 came to $552 billion country wide (read the Notes).

Total Social Security and Disability outlays in 2015 came to $897.1 billion.

That is a total of $2.0811 trillion from 2015 total net compensation of $7.4158 trillion, or 28%, without even talking about "universal coverage" yet.

Yet all your typical American pays now for this is 10.63%:

6.2% in Social Security tax and 1.45% for Medicare, plus whatever taxes are paid at the state and local level toward Medicaid, which federal law mandates must account for at least 40% of program revenues. So $221 billion from 160.8 million wage earners across the country in 2015 represents another 2.98% paid by them at the state level.

The status quo therefore is funded only 38% by its beneficiaries, at best. I say "at best" because many beneficiaries pay NOTHING because they don't work and never have. But I digress.

So bring about Krauthammer's revolution, for that is what he's talking about, and reset the table as follows.

Total healthcare outlays in the United States in 2015 came to $3.2 trillion. Add in $897.1 billion for Social Security and Disability, and you now have a "universal" obligation bloated to $4.097 trillion, which represents 55% of net compensation that year.

That's your tax.

You've become France, Germany, Denmark or some other Western European paradise which depends on the United States for its defense.

And that's before even talking about funding the $1.2 trillion part of the federal budget which is discretionary, like defending ourselves against that little fat kid playing with hydrogen bombs in North Korea.

Of course there's another chunk of money out there being made in the United States apart from net compensation, about $8 trillion in 2015. The recipients of this income typically pay the lower capital gains tax rates, not the payroll and income tax rates which are for the chumps.

It's a nice little system which isn't paying its fair share for socialism in the United States, even though it is rich guys who typically shout the loudest on behalf of it. They do this because they know it will keep the little guy down, from whom they don't want the competition some day. But tax that system equally to net compensation and you cut that 55% tax in half, to say 27.5%. That, however, means a big fat tax increase on the rich, and on everybody else. I doubt they'll stand for that any more than they open their checkbooks now to make patriotic voluntary donations to the US Treasury.

We live in a fantasy land where no one wants to pay what it costs for anything.

We think we can have our cake and eat it too.

We want infrastructure spending, and a tax cut dammit.

We told you in October 2012 that the income tax makes big government POSSIBLE

Here:

As an invention of progressivism the income tax eventually worked a revolution in government by allowing government to grow to gargantuan size with a ready pool of available cash, stolen by force from the population's income. And it is no coincidence that the first major expenditure financed by the income tax was US entry into The Great War. Not long after which came The Great Depression. If progressive ideas were good ones, no one seems to have paid much heed to the early evidence to the contrary.

Every effort by the people since the introduction of the income tax to obtain deductions, exemptions, credits and other incentives in the tax code should be understood by conservatives as wholesome reactionary, counter-revolutionary, rear-guard opposition to what the income tax represents, but today you can hardly find a conservative who will even entertain the idea of overthrowing the income tax, let alone any other of the so-called "achievements" of the progressive era. In fact, some so-called conservatives have become veritable cheerleaders for the income tax. Rush Limbaugh, for one, can't seem even to imagine an America without one for the first 137 years of its existence. An originalist in name only is he.

The problem with so-called Reagan conservatism, then and now, is that it makes peace with the tax code, just as it does with the social welfare state, including Social Security and especially Medicare. Mitt Romney and Paul Ryan actually campaign on just such a platform of preserving Medicare for future generations. As Reagan compromised in the direction of liberalism in the 1986 tax reform, so will they.

Hillary Clinton's fantasy definition of middle class includes 98.8% of the country

Here, where she says it's anyone making less than $250,000:

Clinton has pledged not to raise taxes on the middle class and reiterated her statement to the reporter, which she defined as any American making less than $250,000.

In 2014 98.8% of individual wage earners made less than $250,000.

Commenter explains Donald Trump to oblivious Marxist at CBS News MoneyWatch who appeals to Richard Hofstadter's passé paranoid style

Here:

IHATEUSERNAMESLIKETHIS April 21, 2016 6:6AM

It's not class resentment.

First you destroyed the way we funded our homes and communities -- the Savings and Loans.

Then you destroyed the ways we collectively bargained -- the unions.

Then you stole the [principal] of the Social Security Trust fund, some 2.7 trillion dollars so it couldn't earn interest and started to act like it was a handout you were giving us.

Then you shipped all the manufacturing jobs to China.

Then you shipped the service jobs to India.

Then you "commoditized" the mortgages on our homes in violation of the long standing "statute of frauds" and put them on the big roulette wheel you call Wall Street.

Then when that scheme failed you bailed out the banks that came up with the fraud and stuck us with the bill to bail them out.

Then you ran the money printing press so fast, so the big roulette wheel could prosper while the rest of us found our money buying less and less.

That is not called class resentment. That is called waking up.

Social Security tax rates have been raised 20 times since 1937, they can be raised again and the world won't end

Obama's poor make an emotional appearance at Iowa Democrat town hall, woman speaks of her shame

From the story here:

SANDERS: I want to hear what it is like if people, know people or themselves, what is it like to live on $12,000 a year, $10,000 a year on Social Security. We’ve got a mic right here? OK. Hold that mic close to you, please.

WOMAN: I’ve been living on probably less than that for a long time, because of disabilities. (Crying) It’s so hard to do anything to pay your bills. You’re ashamed all the time… When you can’t buy presents for your children, it’s really, really, really hard. And I worked 3, 4, 5 jobs sometimes, always minimum wage. I have a degree. I’m divorced, and it’s just, I’m waiting for disability to come through, so my parents have to support me.

Believe it or not, pick any level in $5,000 increments all the way up the income ladder starting at zero and you will see that there is a smaller percentage of Americans making that income in 2014 than in 2007 at every single one, with just a very few exceptions starting after the 99.992 percentile where fewer than 15,000 Americans fight over incomes over $4 million per year. The percentage of people making any given income is smaller in 2014 than in 2007 with the exception of the very highest earners.

Everything has shrunk under Barack Obama, except his ego.

We all have something to be ashamed about, not just the poor. 

The inflation-adjusted price of the average prime slave from 1860 is $44,100, very close to the 2014 raw average US wage of $44,569

The average price of a prime slave from 1860 was about $1,500. Using the consumer price index, that's the equivalent of about $44,100 in 2014. The raw US average wage in 2014 was $44,569 according to the Social Security Administration.

The annual mean price of the labor of a slave from 1860 brought a return on investment of about 12%, and on a month to month basis about 14%.  In 2014, corporate profits before taxes came to 12.7% of GDP.

Total slave population in 1860 is estimated to be 3.95 million,  14.7% of the total white population.

See The Economics of American Negro Slavery by Robert Evans Jr. of MIT (1962), here.