David Frum is not a conservative

Here:

Ideas are not artifacts, especially the kind of collective ideas we know as ideologies. Conservatives in 1964 opposed civil-rights laws. Conservatives in 1974 opposed tax cuts unless paid for by spending cuts. Conservatives in 1984 opposed same-sex marriage. Conservatives in 1994 opposed trade protectionism. Conservatives in 2004 opposed people who equated the FBI and Soviet Union’s KGB. All those statements of conservative ideology have gone by the boards, and one could easily write a similar list of amended views for liberals.

Conservatism is what conservatives think, say, and do. As conservatives change—as much through the harsh fact of death and birth as by the fluctuations of opinion—so does what it means to be a conservative.

On the contray, conservatives believe in a transcendent moral order populated by eternal truths to which they seek to conform human affairs. Jews, for example, recognize these in the Decalogue, Platonists in the Ideas and Hindus in dharma. Infractions committed against the eternal truths do not change the truths, the infractions change us, sometimes for the better but more often for the worse.

Like the sophists, David Frum has chosen the worse, peddling his opinions in a world composed of mere opinion, as changeable as a pair of pants.

That's not conservatism.

Sum Ting Wong: Low top marginal tax rates since 1986 have NOT delivered

Low top marginal tax rates have NOT delivered since 1986.

The average top marginal rate has been 38% for the last thirty years, 49% lower than the average rate of 75% which prevailed from 1956 until the Reagan tax reform of 1986.

After the reform, stocks have done little better than before, but gross public debt has increased at a rate 21% higher than before, growth of current dollar GDP has plunged by 66%, and growth of household net worth has slowed by 48%.

Where did the gains from the Reagan tax cuts go?

You know the answer. The number of US billionaires has exploded from just 41 in 1987 to 536 in 2015, up 1,207%. The money has gone into the pockets of the few, instead of into investment. From 1960 to 1986 net domestic investment grew 846% whereas in the 30 years since 1986 the metric has grown by only 117%, a contraction of 86% under the more favorable personal income tax regime.

The lesson seems clear.

Higher marginal income tax rates force the wealthy to invest in business and derive their income from investments taxed at the preferred lower long term capital rates. Lower marginal personal income tax rates, however, entice them away from going through all the trouble, in turn depriving the economy of growth, employees of growing incomes and wealth, and the government of revenue.

Like the formerly sound public policy which invented the 30-year mortgage to force people to save for the future in the housing piggy bank, the time has come to reincentivize business owners to invest more in their businesses by making the personal income option less attractive.

Neither Republican tax bill does this. 

  

I don't remember anyone who complains now about deficits complaining about Obama's then

                          revenues...........outlays............deficits

$7.312 trillion worth!

NYT claims 2010 Obama Paygo law would require mandatory spending cuts under the Republican tax bill

From the story here:

The biggest program affected would be Medicare, the health insurance program for older people and the disabled. But the law allows Medicare to take only a relatively small cut: 4 percent. Other programs have no such protection. ... [Paygo] requires that legislation that adds to the federal deficit be paid for with spending cuts, increases in revenue or other offsets.

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.   

Hoorah for CNBC's Jake Novak, who says the real issue in need of reform is spending

Here:

Whether the Republicans pass a tax-reform bill this year, next year, or ever, the real issue in need of reform is spending. Washington has been spending more than it's taking from the taxpayers for so long that it can only think of new ways to take it away. The result is a spending regime that many economists believe is actually a drag on economic growth because it crowds out so much private sector investment and job creation. At some point, government spending ceases to be stimulative and just gets in the way.

Percentage of GDP spent by government at all levels in the US 1898-2016

Since 1979 through 2016, outlays at all levels have doubled on average every 12.3 years, similar to the period 1898 through 1932 when they doubled on average every 11.3 years.

Outlays in the US in between those periods, from 1932 to 1979, at all levels doubled every 7.8 years on average.

The slowdown in outlay doubling times from the end of the Carter administration is no doubt connected to increased Republican governance, but outlays now divert from productive purposes 4.6 times what they did in 1898, the highest ever except for WWII but still higher than during WWI.

Why? Are we at war today?

Virginia's Dave Brat caves to Conservatism Inc, will vote for tax cuts without spending cuts

  

 

Federal spending already is north of 21% of GDP, and government spending at all levels north of 36%. This is taxpayer money diverted from productive purposes, then skimmed to pay the useless intermediaries of The Swamp, and finally distributed for purposes formerly deemed to be the province of individuals but now the responsibility of  The State.

And they wonder why GDP is so low.

Oh, please Allah, send the asteroid Ceres to destroy DC. Our countrymen never will.

Andrew Mellon, we hardly knew thee.

From the story here:

“I will vote for the Senate budget and while I applaud the work that Chairman Black did in our budget committee to begin the process of mandatory spending reforms, at this point, achieving economic growth is the first priority and so I want to keep that train moving,” said Rep. Dave Brat (R-Va.), a member of the conservative House Freedom Caucus. ... Earlier this year, House Freedom Caucus members had been willing to delay committee passage of the House budget on demands that it include instructions to cut more mandatory spending. Now they are signaling acquiescence to the smaller Senate figures. ... Twenty-two conservative economic organizations under the banner of the National Taxpayers Union sent a letter to House members urging that they adopt the Senate budget.

Jack Lew, who presided over an 87% increase in the national debt as Treasury Secretary, is suddenly worried about the debt implications of tax reform

From the election of Obama in 2008 until the election of Trump in 2016, $9.2 trillion were added to the total public debt. We've gone from $10.6 trillion in the hole to $19.8 trillion over the period.

Yet now we hear from Jack Lew in The New York Times here that

"digging a deep hole of debt by cutting taxes will make it harder to pay for other priorities. And when that debt makes deficits skyrocket in the future, policy makers would have to choose between raising taxes and cutting investments and vital benefits. ... Some Republican policy makers suggest they may reject mainstream approaches and assume positive economic effects that go far beyond those normally projected by the budget office and the tax committee. ... Such a reckless move would almost surely produce an explosion of debt."

Actually, the Obama Administration dug a deep hole of debt right off the bat by spending money it didn't have, tacking on $600 billion of spending to Bush's last fiscal year, and then regularizing the increase by avoiding the budget process in favor of continuing resolutions, the Congress' new bipartisan method of fleecing the American people. Deficits skyrocketed contemporaneously, and then Democrat policy makers recklessly passed Obamacare with its spendthrift Medicaid expansion. They didn't have to choose between anything.

The only people more full of horseshit than the Republicans are the Democrat engineers of the Obama economic catastrophe.

Back on the 10th or so we were being told Trump was brillantly clearing the deck for tax reform

Unfortunately the empty deck got filled right back up by DACA blowback and the Graham-Cassidy Senate healthcare reform bill which is now already in trouble.

Raising the debt ceiling and signing a continuing spending resolution were mistakes. You only get just so many opportunities in four years to shape affairs as president.

Trump still doesn't understand how this works.

The price of the latest continuing resolution will probably be a big tax increase

The last time we had a really big continuing resolution, defying "regular order", the Republicans gave away the store in exchange for lifting the export ban on oil.

Exports began in early 2016. The price of West Texas Intermediate crude has actually risen 51.6% since then, from an average of 31.68 in January 2016 to 48.04 in August 2017.

Larry Kudlow thinks Trump is a genius for clearing the deck with the debt ceiling, hurricane emergency funding, continuing resolution deal with the Democrats because now Congress can finally get down to tax reform and pass it before the end of the year.

Watch your wallets, I say. 

Here's how the House and Senate voted to raise the debt ceiling, fund the government for three more months, and provide hurricane relief

The Senate passed the measure 80-17. That story is here.

The House passed the measure 316-90. That story is here.

See how they use a crisis?

The year 2017 will end without a restoration of regular order in the House, where spending is debated and voted on. And I'm betting we'll never see a return to regular order. It'll be more such continuing resolutions as far as the eye can see.

The debt ceiling is an impediment in genuine emergencies, such as funding disaster relief. But there is no excuse for the continuing dearth of fiscal probity.

There is also no excuse for Trump caving on his promise to shut down the government if he doesn't get funding for The Wall. Extending and pretending was more important to him.

And Trump's new pledge to sign DACA legislation only adds to the perception that he was never serious about The Wall in the first place. He just turned on the magnet again on The Great Illegal Immigration Machine.

One picks the best horse one can, but this horse has decided to drink from The Swamp, not drain it. He'll be promptly unrideable, and we'll have to find another.

If Trump has any balls he'll veto any Continuing Resolution which punts The Wall

Story here.

Republicans promised "regular order". We're not getting it.

Do nothing US House begins 5-week vacation after Senate Obamacare repeal failure

Republican Speaker of the House John Boehner once infamously said that Democrat President Obama had the right to set the agenda. But now that we have a Republican president, Republican Speaker Paul Ryan doesn't see it that way.

Slow-walking Trump's agenda isn't just a Democrat goal, it's an establishment goal. Republicans don't want to see it implemented anymore than the Democrats do, which is why Paul Ryan sabotaged Obamacare repeal in the Senate and promptly adjourned. His reassurances that the House wouldn't simply pass what the Senate passed supposedly were not good enough for John McCain.

But John McCain, who everyone knows is going to promptly die anyway, simply took one for the team. "Gee, what a guy. We get to run for reelection saying we voted for repeal and the dopes will believe us". 

Remember the agenda below from Trump? Seven months already have been blown on item 5, yet without success. Election 2018 is just 15 months away, and really 14 because August is a fait accompli. The prospects for getting nothing done by then of what Trump wants accomplished look better and better by the day, and that's just the way the establishment wants it.

   

Next, I will work with Congress to introduce the following broader legislative measures and fight for their passage within the first 100 days of my Administration:

1. Middle Class Tax Relief And Simplification Act.

An economic plan designed to grow the economy 4% per year and create at least 25 million new jobs through massive tax reduction and simplification, in combination with trade reform, regulatory relief, and lifting the restrictions on American energy. The largest tax reductions are for the middle class. A middle-class family with 2 children will get a 35% tax cut. The current number of brackets will be reduced from 7 to 3, and tax forms will likewise be greatly simplified. The business rate will be lowered from 35 to 15 percent, and the trillions of dollars of American corporate money overseas can now be brought back at a 10 percent rate.

2. End The Offshoring Act.

Establishes tariffs to discourage companies from laying off their workers in order to relocate in other countries and ship their products back to the U.S. tax-free.

3. American Energy & Infrastructure Act.

Leverages public-private partnerships, and private investments through tax incentives, to spur $1 trillion in infrastructure investment over 10 years. It is revenue neutral.

4. School Choice And Education Opportunity Act.

Redirects education dollars to give parents the right to send their kid to the public, private, charter, magnet, religious or home school of their choice. Ends common core, brings education supervision to local communities. It expands vocational and technical education, and make 2 and 4-year college more affordable.

5. Repeal and Replace Obamacare Act.

Fully repeals Obamacare and replaces it with Health Savings Accounts, the ability to purchase health insurance across state lines, and lets states manage Medicaid funds. Reforms will also include cutting the red tape at the FDA: there are over 4,000 drugs awaiting approval, and we especially want to speed the approval of life-saving medications.

6. Affordable Childcare and Eldercare Act.

Allows Americans to deduct childcare and elder care from their taxes, incentivizes employers to provide on-side childcare services, and creates tax-free Dependent Care Savings Accounts for both young and elderly dependents, with matching contributions for low-income families.

7. End Illegal Immigration Act.

Fully-funds the construction of a wall on our southern border with the full understanding that the country Mexico will be reimbursing the United States for the full cost of such wall; establishes a 2-year mandatory minimum federal prison sentence for illegally re-entering the U.S. after a previous deportation, and a 5-year mandatory minimum for illegally re-entering for those with felony convictions, multiple misdemeanor convictions or two or more prior deportations; also reforms visa rules to enhance penalties for overstaying and to ensure open jobs are offered to American workers first.

8. Restoring Community Safety Act.

Reduces surging crime, drugs and violence by creating a Task Force On Violent Crime and increasing funding for programs that train and assist local police; increases resources for federal law enforcement agencies and federal prosecutors to dismantle criminal gangs and put violent offenders behind bars.

9. Restoring National Security Act.

Rebuilds our military by eliminating the defense sequester and expanding military investment; provides Veterans with the ability to receive public VA treatment or attend the private doctor of their choice; protects our vital infrastructure from cyber-attack; establishes new screening procedures for immigration to ensure those who are admitted to our country support our people and our values.

10. Clean up Corruption in Washington Act.

Enacts new ethics reforms to Drain the Swamp and reduce the corrupting influence of special interests on our politics.

On November 8th, Americans will be voting for this 100-day plan to restore prosperity to our economy, security to our communities, and honesty to our government.



This is my pledge to you.

What will the next point be on the graph when Trump is done?

Memo to GOP

Not one more dime.

Your fair share in taxes in 2015 was 21.3%: Did you pay it?

How to reform Medicaid before Obamacare is even repealed and save $48.3 billion: Kick out all the illegal aliens

We don't need no stinkin' Medicaid

CIS estimates that 51% of illegal aliens are enrolled in Medicaid, here.

That's 6.12 million illegals receiving Medicaid out of 70 million total receiving Medicaid in 2015.

Medicaid outlays in 2015 came to $552 billion, or $7,886 each. 

Trump isn't fighting to build a wall, in fact he keeps caving

Trump got nothing in the continuing resolution through this fiscal year, and will get even less than he was asking for, if he's lucky, in the next.

Story here.

What a pathetic loser this guy's turning out to be.

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.