Even Larry Kudlow Agrees: GOP Tax Reform Bill is NOT Tax Reform
The GOP tax reform is pretty bad. And it’s not tax reform-as it isn’t deficit neutral. These are facts that we’ve all been talking about. But what’s news here is that even Larry Kudlow agrees:
“One of President Donald Trump’s top outside economic advisers says the individual side of the GOP tax plan never should have happened and threatens to “hurt a lot of different people.”
This is a big divergence with the official GOP position that the fake tax reform bill helps everyone and hurts no one.
Larry Kudlow is going rogue.
“The individual side of this is maybe not the worst thing I’ve ever seen,” said Larry Kudlow, a prominent economic commentator and former adviser to President Ronald Reagan, in the latest POLITICO Money podcast. “But when you end the state and local deduction, because rates are still relatively high, you are going to hurt a lot of different people. So the internal logic was not good and this is not a true tax reform bill.”
Not the worst thing. That’s ringing praise on the individual side. It’s especially not the worst thing if you’re rich.
But as he notes, ending the state and local deduction is going to raise the taxes of millions of non wealthy people.
“Kudlow, who helped design the corporate tax cuts that are the centerpiece of the GOP effort, said the rest of the bill will lift growth and fatten paychecks even if it means higher short-term deficits.”
“The sickest part of our tax system is the business side because of international competitive reasons and because of America’s prohibitively high tax rates,” he said. “Profits have been coming in rather well over the last 10 years. But the money is going offshore and that’s really hurt not only investment, it’s also hurt wages.”
This is a fallacy. The reason wages are low is not because of corporate tax rates: indeed corporations are sitting on record amounts of cash. The real reason is because of: automation.
Which is why the Mike Sax for Congress NY2 campaign-I’m Mike Sax-is calling for a new New Deal with a mandate to raise wages.
Back to Kudlow:
“Kudlow said he believes the corporate side of the tax plan can raise the U.S. growth rate to 3 or 4 percent even though many budget models suggest the growth impact will be much lower.”
“But he acknowledged that it’s a risk, adding that the Obama administration tried a spending approach to stimulating the economy and now it’s the GOP’s turn to try supply-side tax cuts.”
“Just give us a chance and in three or four years, if it doesn’t work, it doesn’t work; we all go back to the drawing board. I get that. But it’s our turn,” he said.
Sure burn the house down. We’ll get to rebuilding in three or four years.
As for Obama spending all this money that’s something of a myth itself, alas. Yes, there was the initial stimulus which wasn’t large enough.
One of the arguments advanced against a bigger plan was that it wasn't politically feasible, because Democrats didn't (yet) have 60 Senators. But looking at what Republicans are doing with reconciliation, and only 52 Senators, that now seems silly 2/
— Paul Krugman (@paulkrugman) November 25, 2017
Yes, ufortunatley Obama always played for a GOP buy in that never came in eight years. Despite this, even in September-October of 2016 he was looking for a buy in on Russian interference. He actually asked Mitch McConnell of all people for this.
The stimulus wasn’t big enough. It still helped quite a bit but was not wholly sufficient. Then after the GOP came in, it was austerity time. There were no deficits from these years.
In early 2013, the unemployment rate was 8 percent, the economy clearly needed fiscal stimulus, but the news media were obsessed with the supposed danger of budget deficits 1/ https://t.co/o1fvN9T3P3 pic.twitter.com/nmN98VOYth
— Paul Krugman (@paulkrugman) November 28, 2017
As for the stimulative benefits of supply side corporate tax cuts this is another zombie idea which never dies.
This is a really useful summary. No serious estimate produces anything close to the extra growth that would make tax cuts pay for themselves https://t.co/a7tQKyEQIC
— Paul Krugman (@paulkrugman) November 27, 2017
P.S. I’m Mike Sax, I’m running for Congress in the NY 2nd District and I’m a Hillary Clinton Democrat.
Meeting her recently was one of the biggest honors in my life to stand next to such a fine public servant and trailblazer. She seemed to like our Impeachment Train campaign t shirts too!
Think of the shirt as a one time investment in restoring legitimacy to this country.
And please donate so we can compete with Peter King’s $4 million. I know no lobbyists or millionaires like Peter King. Small donations are the engine of the Mike Sax NY2 campaign. Together we can do it. Because we must.