Budget Cuts and Bribery

…or budget cuts and coercion, depending on your perspective.

The president’s budget, due for release Tuesday, will spare the two largest drivers of future spending—Medicare and Social Security—leaving trillions in cuts from other programs. That includes discretionary spending cuts to education, housing, environment programs, and foreign aid already laid out by the administration, in addition to new proposed reductions to nondiscretionary spending like food stamps, Medicaid, and federal employee-benefit programs.

What’s going to be ignored in the inevitable hoo-raw over these allegedly terrible cuts to various aspects of our nation’s “safety” net is the truly terrible downside of those aspects.

Foolish

President Donald Trump is willing to talk to the Progressive-Democrats in Congress in order to achieve tax reform, and it might seem like a good idea.  In the present situation, though, it’s a waste of time.

As the Trump administration reached across the aisle on tax reform for the first time Wednesday, Democrats communicated some requests of their own regarding the tax overhaul. Those requests included a middle class tax cut and that the overall bill not be part of a reconciliation package….

Medicaid Cuts?

Some conservative Republican Senators are looking to cut Federal transfers to the States earmarked for those States’ Medicaid programs.  Others are concerned.

[T]he [conservative Senate Republicans’] Medicaid plan could affect many more people and shift significant costs onto hospitals and states.

A Thought on Tax Reform

The Wall Street Journal‘s piece by Laurence Kotlikoff, a Boston University economist, on tax reform had this subhead [emphasis added]:

The House proposal beats Trump’s plan, which is more regressive and would induce huge tax avoidance.

There are a number of questions considered in the article, but the prior question, it seems to me is that tax avoidance bit.  The question of tax avoidance is an interesting non sequitur.  Kotlikoff (or the WSJ‘s headline writer), like too many others, is tacitly assuming Government is entitled [sic] to our money; he is giving not the least particle of thought to the need to establish, first, that Government even needs the money before there can be any tax to be avoided.

Going Soft

Senate pseudo-Republicans are balking at one good item that was contained the House-passed American Health Care Act: repeal of Obamacare’s trillion dollars’ worth of taxes.  These guys actually don’t see the value of that repeal.  Senator Susan Collins (R, ME) is typical:

I don’t see how you can repeal all of the pay-fors…and still meet the goal of providing health-insurance coverage for people who truly need assistance[.]

Aside from the false premise of needing Federal government “pay-fors” as a default position, rather than a last result, the Lady from Maine and her fellows plainly either don’t understand free market principles, or they have no confidence in free markets.

Confusion

The latest whiner pundit to weigh in on President Donald’s tax reform principles, laid out in a concise one-pager.  And yet these pundits pretend to confusion over it.

President Donald Trump’s plan is silent so far on crucial details Americans need to calculate their tax bills, including the personal exemption and the size of the tax brackets.

And

The president’s latest plan for middle-income households…has left tax experts puzzled. That is because his one-page tax outline released in April is silent on essential details, including how the tax code will treat the personal exemption that reduces taxable income depending on family size. It sets tax brackets of 10%, 25%, and 35% without establishing the income levels that divide them.

Little Compelling Evidence?

Greg Ip, in his Monday Wall Street Journal piece on the matter of corporate tax cuts, says that

most of the US’ largest trading partners cut their corporate rates. But their experience offers a reality check. There is little compelling evidence any enjoyed substantially faster growth as a result, and certainly not on the scale of Mr Trump’s ambitions….

He offered some examples:

Britain reduced its corporate rate from 30% in 2007 to 19% now. A 2013 study by the British Treasury predicted the tax cuts since 2010 would eventually boost the level of gross domestic product by 0.6%. That is certainly worth having, but spread out over, say, six years, would boost the growth rate by a barely noticeable 0.1 percentage point.

“We pay a lot to feed the civil servants”

That’s what Zhou Dewen, Zhejiang Private Investment Enterprise Association Director, a business lobbying group in the People’s Republic of China has said.  He, like business representatives anywhere—including here in the US—is right to be concerned.  That concern is compounded by President Donald Trump’s tax proposal.

Now, Chinese officials and executives worry that the tax proposal Mr Trump announced last week will set back China’s global competitiveness and spur companies to invest in America instead of China.

Which is one of the points of Trump’s proposal that, among other things, seeks to drastically lower our usurious business tax rates.

A Tax Code Proposal

Below is the handout given to the NLMSM at Wednesday’s White House daily press briefing, this time hosted by Chief Economic Advisor Gary Cohn and Treasury Secretary Steve Mnuchin for the purpose of discussing President Donald Trump’s tax reform proposal, which was released today via that handout and press briefing.

Also included, as mentioned during the briefing though not on the handout, is a proposed reduction of the peak capital gains tax to 20%, which Cohn and Mnuchin said will stimulate investment—and, I add, stimulate both productivity and new job creation via that increased investment.

Another Reason

…to stop sending Federal funds to any institution in the California University system.

The University of California hid a stash of $175 million in secret funds while its leaders requested more money from the state, an audit released on Tuesday said.

The University of California system is run by Janet Napolitano, the former Secretary of the Department of Homeland Security.  And the same Napolitano who decided returning American veterans could be terrorist material: her history of dishonesty is a long one.