1986 was the last year domestic investment exceeded investment abroad, which is why everything REALLY SUCKS here now

NAFTA began with Canada in 1989, was expanded in 1994, China became a WTO member in 2001, but the 1986 tax reform really started the final leg down

Judge Roy Moore loses US Senate bid in Alabama by 20,715 votes, 1.5 points

Judge Roy Moore joins the Todd Akin club.

Republicans got the man they really wanted, Democrat Jones, who will give them the convenient excuse they need for not passing the Trump agenda without having to vote against it.

I sincerely hope more Republicans get what they want in future. They deserve it for not delivering on The Wall, an immigration pause, and tax reform which benefits individuals instead of corporations.

Gene Sperling: Republican tax reform will shift even more corporate profits and jobs abroad

You'd better pray this reform effort fails, for your kids' sake.

In The Atlantic here:

Now that the bill is advancing, it’s clear that things aren’t as bad as many feared. They’re worse. . . .

[T]he tax plan fails when it comes to incentives to shift profits and operations overseas and to curtail the obsession of major multinational companies with international tax arbitrage that has nothing to do with innovation, productivity or job creation. Indeed, the ability to blend income from intangibles and routine profits, and from investment in higher tax nations with tax havens with zero taxes, leads to a worst of all worlds scenario: an even greater corporate focus on international tax minimization through a careful mixture of shifting profits and operations overseas.

If there was one thing the GOP international tax bill was advertised to accomplish, it was that it would favor locating jobs and profits in the United States. It does just the opposite—expanding the degree our tax system tilts the playing field against American taxpayers and American workers.

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. 

  

Recent history shows that recipients of lower top marginal income tax rates haven't invested the money . . . here

The top marginal rate averaged 70% from 1960, 73% shown is from 1956. The investment data starts in 1960.

Individuals and businesses need incentives to invest here in the United States. They won't do it naturally.

Recent tax history shows this to be the case. For decades when top marginal income tax rates were very high before 1986, the most successful in our society plowed money into domestic investment to grow businesses through which they could derive income, which was taxed at lower long term rates than ordinary income which was taxed at very high rates. Not only did they themselves benefit handsomely, but the whole country benefited because people found useful employment and government received tax revenue. It was an arrangement which made America great.

After the 1986 tax reform which lowered top marginal rates, this stopped being true. The record shows a steep fall-off in domestic investment, which is one reason why incomes and jobs have been stagnant and deficits have piled up. 

The other reason, of course, is free-trade, euphemistically called globalization, which made it possible for businesses to invest internationally instead of domestically. This has been a boon to the growth of middle classes in other countries, but not in our own.

It's not very patriotic, is it?

What we need now is government policy which rewards domestic investment, and punishes its export. The best way to do this is to abolish taxation on domestic business completely to attract more of it, and heavily tax foreign business. We should also reinstate the correct mix of high top marginal income tax rates to incentivize business investment, coupled with attractive long term capital gains tax rates as a reward to the true risk-takers.

Needless to say, the Republican shift away from worldwide taxation to territorial taxation in the "reform" is about reducing risk to established business. This is simply going to make matters much worse for the American middle class, as is the obsession with making money the easy way through lower top marginal ordinary income tax rates.

The American character and spirit I once knew appears to be truly dead.

How to know the Senate tax bill SUCKS: John McCain now supports it

From the story here:

"After careful thought and consideration, I have decided to support the Senate tax reform bill," McCain said in a statement. "I believe this legislation, though far from perfect, would enhance American competitiveness, boost the economy, and provide long overdue tax relief for middle class families."

House Republicans won't allow floor amendments to tax reform, will ram it through instead

House Ways and Means Committee Chairman Rep. Kevin Brady, quoted here:

He also said that there would be no House floor amendments to the bill, and that changes would be made in his committee and potentially in a conference with the Senate down the road.

In all seriousness, Republican elimination of personal exemptions is just sleight of hand to raise your taxes

In 2017, the personal exemption is $4,050.

If your little tribe is six, mommy, daddy, and four kids, your personal exemptions add up to $24,300.

Add in the standard deduction for a married couple filing jointly of $12,700 and you are up to $37,000 shielded from taxation. (Itemize deductions instead and you might shield even more, but Republicans are proposing new limits on those, too).

The new Republican tax reform, however, eliminates the personal exemptions and caps all this at the new higher standard deduction of $24,000, thus exposing $13,000 to taxation that wouldn't have been exposed before. And you'll pay at a higher rate in the lowest bracket, too, which has been raised from 10% to 12%.

That's what's really going on here. The only way this benefits families is if those families are small. And, of course, small families implies something else: more immigration.

It's anti-American and anti-family, and in fact, it's inhumane. Taxes were always meant to be personal, and by eliminating personal exemptions for the first time in history the libertarians who wrote this bill are showing their purely materialistic hand.

You aren't a human being to them. You're merely capital.

Don't let them get away with this.

Republican elimination of personal exemptions gives me an idea for truly revolutionary tax reform

In 1913 when the income tax began there was no such thing as the standard deduction. That didn't come along until 1944.

The original income tax was a class tax, a tax on the wealthy, just as was the corporate tax instituted in 1909. From the beginning it came with a personal exemption of $3,000 and if you were married $4,000. Dependent exemptions didn't begin to be added until 1917, starting at $200.

Guess what the personal exemption of $4,000 would be in 2016, adjusted for inflation? $100,000. Times all the individual wage earners in America in 2016 $16.3 trillion would be exempt from taxation. In the third quarter of 2017, personal income in the United States wasn't even $16.5 trillion. 

In other words, the original personal exemptions of the tax code adjusted for inflation would exempt all current personal income from taxation, except for maybe $200 billion.

As far as I'm concerned, the government can have that.

Now that's what I call a tax reform.

Most Americans will be hoodwinked by Republican tax reform because they never do their own taxes

56% use a paid preparer, and 34% use tax software, according to figures reported here.

That means 90% of individual filers really have no idea how the numbers have worked in the past, and therefore they are most likely going to have not the slightest idea how the tax reform will change them.

I'm betting Republicans are counting on this as they try to rush this through by Thanksgiving.

Your goose is cooked, sir.

Republican tax reform includes a sneaky tax increase on itemizers, removing the personal exemption privilege

Josh Barro, here:

Currently, you get to take the personal exemption even if you also itemize deductions, but you get to take the standard deduction only if you forego itemized deductions. Combining these provisions into a single, standard deduction would mean itemizers lose their personal exemption and get nothing back — meaning they'll typically pay tax on an extra $4,050 of income if they're single, or $8,100 if they're married.

The Republican tax reform is evil: It goes after the very young and the very old

Parents of large families no longer get dependent exemptions for their multiple children under the proposed Republican tax reform, thereby exposing more of their income to taxation, income which parents need to raise these future taxpayers. It's almost as if Republicans are trying to discourage giving birth to the future country.

And medical expenses are no longer a thing under the plan. It's mostly elderly people who rely on the deduction of medical expenses to keep solvent in old age, but the deduction also helps others who experience catastrophic medical expenses under high deductible plans or under no plan. It's almost as if Republicans want these people to suffer complete and utter penury because of medical necessity.

For the first time in my Republican life I'm having to consider that Republicans deliberately went after these two groups, the most vulnerable in our society. It's almost unthinkable after all these years that the pro-life party is nothing of the sort.

If stuff like that stays in the plan I'm going to be facing the prospect of having to consider seriously voting for the enemy.

Who knows. Maybe that's what Republicans want. They've become so liberal now maybe they want us to fulfill this very clearly expressed tax reform death wish by throwing them out of office.

Tax reform verdict: Big business likes the plan released today, the broad market just shrugged

The DOW gave a thumbs up . . .

. . . but the broadest measure of the market just shrugged.

Big business gets a tax rate cut to 20%, but pass-throughs only to 25%

Republicans are favoring established big businesses at the expense of smaller and independent businesses. In essence they are protecting the already successful from those who only dream of being as successful. Combine the loss of other deductions being eliminated under the tax reform proposal and pass-through filers will find that their big tax cut is not so big after all. 

"One rate for thee, but another for me".

From the story here:

The bill would lower the top rate for income from "pass-through" businesses from 39.6 percent to 25 percent. These businesses, which include some small businesses, otherwise have their income taxed through the individual code on their owners' returns. But NFIB [National Federation of Independent Business] says that most small businesses wouldn't qualify for the lower rate because of the way the new rate is structured.

Additionally, the bill as a default position would not allow income from personal services businesses, such as law and accounting firms, to be eligible for the 25-percent rate.

Strike Three and You're Out: Both National Associations, of Homebuilders and of Realtors, pull support from House tax plan

Trump looks set to be defeated on tax reform as 2017 winds down, just as he has failed to overturn Obamacare and build The Wall. And considering what the tax reform is looking like, it's just as well.

The tax plan as it stands this weekend eliminates the itemized deductions for mortgage interest and state income taxes, keeping only the deduction for property taxes.

Reported here:

[I]n a sign of the complex balancing act that [House Ways and Means Chairman Kevin] Brady must perform to produce a tax-overhaul bill this week, the property-tax announcement came on the same day that the National Association of Home Builders pulled its support for the legislation. The group’s chief cited concerns that the bill might undermine existing tax breaks that support the housing market. Likewise, a coalition that includes the National Association of Realtors said in an emailed statement that it “will vigorously oppose this plan.” ... It would appear that deductions for state and local income taxes and sales taxes would still be repealed under the planned House bill.

This is all the fault of our so-called conservatives in the US House. They aren't conservatives. They're doctrinaire libertarians who HATE people who want to get married, settle down and buy a house and have children. They view people as CAPITAL, whose value only decreases if it is too difficult to move them around at the whim of GLOBAL BUSINESS. That's why you'll never hear these people target the tax revenue lost to the lower capital gains and dividend tax rates, which are almost TWICE those lost to the mortgage interest deduction. These people are the enemies of localism and are instead the champions of the homogenization of society with its bland sameness everywhere. They are the ones who've shipped our jobs overseas and let in the tens of millions of immigrants who've further reduced our wages and opportunities.

One year from now you'll have another chance to send them packing.

I'll be voting for Mickey Mouse and Donald Duck before voting for a libertarian in 2018.

Told ya: Trump to raise lowest tax bracket from 10% to 12%

Story here:

Top White House and GOP leaders have agreed to raise the lowest individual tax rate from 10 to 12 percent, paired with doubling the standard deduction, 5 senior Republicans tell us.

The standard deduction becomes the football in this scheme. If the doubling survives intact, which is hardly certain, down the line someone can say it must be reduced, without advocating a change in the bracket percentage and voila, you've got a nice little tax increase on the poorest members of society without directly raising taxes.

This ridiculous tinkering with rates and deductions just continues ad infinitum since 1913.

As with the Obamacare repeal efforts, there are no guiding principles informing the tax reform debate.

Mandating health coverage at the federal level is tyrannical, and so is the income tax, quite apart from its deliberate inequalities.

Trump kept insisting on a replacement for Obamacare as well as a system of progressive taxation during his speechifying.

There's no there there. 

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. 

There were lots and lots of articles today about a tax reform bill . . .

. . . as if the Obamacare repeal debacle had never even happened.