Let's be forthright about the tax cuts

I was taking stock of finances the other day and calculated that I have paid about $1500 less in taxes compared to this point last year. By the end of the year it could amount to a $2000 difference. I expect to earn within a few % either side of $100k this year.

$2000. Thanks GOP. It is difficult to say that this aspect of things is bad. However, I feel like media outlets like FOX aggressively seek to limit the conversation to this one single point. “The average American taxpayer is paying $x less in taxes! That’s good for you, end of story, end of discussion, nothing more to see here!” This thread is not intended to gripe about what I think of as “the GOP Propaganda Machine,” but I can’t ignore it in this conversation. Cherry picking is de riguer, from FOX, from GOP Congress critters, from seemingly everyone who promotes the GOP. Any attempt to examine the true bigger picture gets strenuously beaten back, deflected away from, labeled as “liberal” something-or-other- a whole toolbox of rhetorical techniques are deployed to distract attention away from deeper analysis of this one bullet point. This is my personal view, and if it is wrong I hope you will convince me otherwise.

Because, as much as I like to have an extra for-real $2000 to spend every year, I am terribly uneasy about the latest round of tax cuts. At a time of general national economic well-being, the country is amassing $1 trillion a year in debt. I don’t think this is a result of fairly comfortable people like me having $2000 in tax relief, I think it is largely due to people who make 10x or 100x or even 1000x more than I do, receiving much larger tax cuts as a share of their income. Why? I think it has nothing whatsoever to do with establishing justice, attending to the general welfare, achieving domestic tranquility- I think it is entirely because this claque of wealthy people donated to GOP candidates with instructions to cut taxes for the wealthy, regardless of the consequences. I think the will of the people has been subverted. I believe US government is not functioning as designed where this point is concerned- I believe it has been corrupted and captured by the wealthy for their own interests, to all of the rest of our eventual harm.

Point 1- The GOP lies bald facedly to justify the tax cuts. Steve Mnuchin said, “Not only will these tax cuts pay for themselves, they will reduce the debt.” This was obviously hogwash before the fact, and the results confirm this. What you never hear out of the GOP Propaganda Machine is that, for GOP officials to look the public in the eye and simply lie about such consequential matters is to say, “Fuck you, American public. We do Not represent you as is our sworn Constitutional duty, we are appendages of the wealthy and there is nothing you can do about it. Look elsewhere than your government if you want a voice.”

Point 2- The corporate tax cuts are overwhelmingly being used to fund stock buybacks and not to hire new workers or to generally grow businesses in a way that builds wealth for the public at large. Yes, there were some celebrated employee bonuses announced after the tax cuts, mostly one-time $1000 payouts, but how much do these bonuses amount to? The public is funding these tax cuts to the tune of $1 trillion a year, and the return on that in the form of increased pay and bonuses is- what? I don’t think it amounts to even 1% of the value of the tax cuts. My position is that the GOP Propaganda Machine would have us believe that the corporate tax cuts are being funnelled to workers to the benefit of all, when in reality it makes the ultra wealthy even wealthier while leaving the rest of us a few crumbs. I believe the true message out of the GOP is, " Fuck you, American public. We are openly robbing you to benefit our wealthy sponsors, and if you think you have a voice in your own government, you are a sucker and a rube."

Point 3- The consequences of the tax cuts will be far worse than the benefits for people like me. This final point is the real thrust of this debate. I cannot see how $1 trillion deficits are justified under the current circumstances. We are not in a crisis we need stimulating out of, but rather the general economic placidity is hiding, for now, the eventual consequences of this huge amassing of debt.

Me, I am 45 years old. If there is going to be a bear market or even a crash, my outlook is to just keep plugging away with my 401k anyway since by the time I retire, the current economic cycle will have come and gone and more or less won’t matter. If I were retiring Right Now, the stock market boost from these tax cuts would be a big help- anyone with stock investments is better off, for now. But how long can that last?

Consider- Baby Boomers are retiring, thousands a day. Selling their retirement accounts for cash puts downward pressure on the stock market. At the same time, increasing debt levels drive up interest rates, which also puts downward pressure on the market. When Treasury yields compete first with dividends, and eventually with growth returns, how can they fail to divert money away from stocks? I can’t see how Boomer retirement plus rising interest rates can eventually result in anything other than a bear market, at best.

I see it as a massive scheme. As the debt rises to $20 trillion, maybe $30 trillion and beyond, well, ask yourself, who has the money to buy $30 trillion in bonds? It isn’t me with my extra $2000 in tax cuts, it is the already super wealthy. As interest rates rise, the public obligation to bondholders will surpass $1 trillion PER YEAR in interest payments alone, payments from the public to mosly super wealthy bondholders.

>>>This is a long post, so let me repeat that. As interest rates rise, the public obligation to bondholders will surpass $1 trillion PER YEAR in interest payments alone, payments from the public to mostly super wealthy bondholders.

How will we endure an additional $1+ trillion in public liabilities? It is straight out of the GOP playbook: eliminate Social Security and Medicare. To fund massive public payments to the already super wealthy. And we come full-circle to my current $2000 tax cut. For $2000 a year, I believe I am going to be forced to forfeit benefits that far, far exceed that. Social Security alone amounts to close to $2000- a MONTH. Medicare? Who knows, but I do know that I will no longer have employer provided health insurance after I retire, and private insurance after Medicare is gone will cost a helluva lot more than $2000 per year. I won’t come out ahead- the consequences of these tax cuts will be a Huge liability.

Me, you, all of us are expected to be too stupid to notice. I believe the translation of the GOP tax cuts into English amounts to, “Fuck you, American public. We have captured your government, we have suppressed your voice, and soon we will be transferring your benefits to our wealthy benefactors. Because they paid us to. You are all too much of a crowd of rubes to do anything but swallow the lie and get robbed. Vote GOP, suckers.”

What, you mean the republican party isn’t pushing tax cuts (primarily for the super-rich) because it’s sound macroeconomic policy?

Now would be an excellent time for various anglophone countries to open their borders to any and all skilled Americans interested in living there.

The economy is booming, and the deficit is going up very substantially. Of course the tax cuts cannot pay for themselves.


As you say, just wait until the next downturn - it probably isn’t that far off - and we will see how much the debt is affected by the tax cuts.

But I don’t think there’s any deeper master plan here. Trump and congressional Republicans are incapable of planning a buffet, to say nothing of fiscal policy several years down the road. They are the party of instant gratification: you’ll find them all eating raw pancake batter because they have no value for the actual goodness of eating real pancakes. It just takes too long.

Are you aware that the withholding tables under the new tax law are reportedly under-withholding for many people. You may be in for a surprise next April.

I’d give you a link, but somehow editing here is not working right for me at all to allow me to cut and paste.

I was not aware of that. Nice- smoke and mirrors on top if lies.

What does that mean for people like me when the downturn starts? We were ten bucks short on rent, if it wasn’t for the neighbor I don’t know what we would do.

I guess my question is when is this downturn coming do you think? What is going to cause it? The bank my wife used to work for is predicting a downturn within 6 to 18 months from now, but it’s kind of vague at least to me what causes it. They are in full prep mode for I though. They are a medium sized regional bank.

Try this calculator to get a pretty good estimate of your taxes. http://taxplancalculator.com

I don’t know - you could be fine. Or you could have your hours cut, or lose your job entirely.

If anyone knows when it is coming, they are probably lying - either to themselves or you. But economies just don’t expand forever, and ours has been expanding for about nine years now.

I disagree with this kind of under-estimation of the GOP. For example, this whole jack-up-the-deficit plan goes back to Reagan. FOX had its genesis in the aftermath of Nixon’s resignation- there was a theory that the media then was just “too liberal” and if there had been more pro-GOP media coverage, things may have turned out differently. What were they going to promote? It isn’t illegal when the president does it? He’s a crook but also a really nice guy? I don’t know, it isn’t my theory, but various interests ran with it and the result is FOX news itself. That’s almost 50 years in the making. Limbaugh has also been spewing inaccurate, propagandistic hate for decades.

And the GOP revealed themselves during the Obama administration, if it wasn’t already obvious before that. Remember, during the financial crisis, how they obstructed stimulus and other solutions because they were in such a tizzy over the deficit? Obama cared about the deficit, too, but the Only solution the GOP will allow is “entitlement reform”, their word for cutting or eliminating Social Security and Medicare. To them, that’s what the debt is* for*, any other solution gets tarred as “liberal” or “socialist” or what-have-you. These views come from my own observations, plus a little Krugman:

I’ll grant you that Trump is mostly incompetent, but by and large I think the GOP has a long-term plan.

When? I don’t know. Me and your bank are not the only ones who think it is coming, though. SeeGoldman Bear-Market Risk Indicator at Highest Since 1969: Chart

What will cause it? Depends if we are talking about a recession or a bear market. I think a bear market will be driven by at least two things: a wave of retirees selling their holdings and rising Treasury yields. Think about it: a 3% sure-thing yield from a bond is nice, but while stocks continue to go up, a lot of people are willing to take their chances for a bigger return on stocks. But what about at 5%? 7%? The higher the sure-thing yield on bonds, the more people are attracted to them and away from the stock market. And yields are all but guaranteed to rise- with the current explosion in deficits the government has to issue many more bonds, which puts upward pressure on the yield to attract buyers.

Who knows if there will be a turn in the business cycle that leads to a recession. Maybe a crash in China, maybe all these fires and hurricanes will have an effect, maybe people will just lose confidence and stop spending money. There are a couple of factors already baked in though, so a big surprise might be enough to tip the balance.

Another important question to ask when you hear talk about how the average taxpayer got a tax cut is who that average taxpayer is. It’s really easy to rig the figures with an average. Give one guy a million dollar tax cut and raise taxes ten thousand dollars for ninety-nine other people. Then report that you gave everyone a hundred dollar tax cut - on average.

Sure, forty years ago Republicans could think their way out of a wet paper bag. Sixty years ago, too.

People like Trump, Jim Jordan, Steve King, etc. are barely above Ruprecht-levels of needing a cork on their fork to avoid severe injury to themselves. They aren’t Bobby Fischer, they are Forrest Gump, achieving office despite no qualifications.

That’s quite different than people like Gingrich, DeLay, Rove, and so on who are actually politically erudite and quite dangerous.

If you read you’re own cite it shows revenue is up, not down: Federal spending rose by 7%, outpacing revenue gains of 1%.

We’re taking in record revenue: The U.S. took in $510 billion in receipts in April and spent $296 billion, leaving the Treasury with a record monthly surplus of $214 billion. The prior record, set in April 2001, was about $190 billion.

The last president doubled the deficit of every President before him COMBINED.

[The economy is booming, and the deficit is going up very substantially. Of course the tax cuts cannot pay for themselves. https://www.google.com/amp/s/www.bloomberg.com/amp/news/articles/2018-09-13/u-s-budget-deficit-swells-to-898-billion-topping-forecast](

If you read you’re own cite it shows revenue is up, not down: Federal spending rose by 7%, outpacing revenue gains of 1%. We’re taking in record revenue: The U.S. took in $510 billion in receipts in April and spent $296 billion, leaving the Treasury with a record monthly surplus of $214 billion. The prior record, set in April 2001, was about $190 billion.

The last president doubled the deficit of every President before him COMBINED. Let me refresh your memory of what Obama said about his predecessors’ debt increase: It’s irresponsible, it’s unpatriotic"]Let me refresh your memory of what Obama said about his predecessors’ debt increase: It’s irresponsible, it’s unpatriotic

I don’t think that cite proves your point. The first line of that cherry says

and it goes on to say

Revenue is still on track to increase. Cite

We don’t have a tax revenue problem, we have a tax spending problem. It’s being driving by a series of stop-gap budget approvals instead of going through the full budget process.

The conspiracy theorist in me thinks the GOP fully expects to lose in 2020 and hence is timing these tax cuts so as to trigger a recession quite soon after a Democrat assumes the presidency in Jan. 2021, which will crater that Democrat’s approval and pave the way for a Republican return to the White House in 2024.

The GOP wouldn’t mind a recession itself as long as the timing is right.

Well, I’m not going to make $100k this year. I’m not in the money. I’m a warehouse worker who makes just about as much as it takes to pay my bills. I have no 401k, I own no stocks. My insurance (through work) is prohibitively expensive for the lowest possible coverage, which is no fun when you’re 53 and you’re starting to fall apart, and I’ll probably have to pay more in taxes next year because I can no longer claim my federal taxes on my state return. So, fuck the GOP and their “tax reform,” I hope they all choke on their fucking caviar.

Er, the other way around …

Oh my. I thought we’ve rebutted this error before. I see why the Board’s motto is “It’s taking longer than we thought.” :slight_smile:

Let me first ask Magiver if he remembers the great Y2K crisis; the way key software all over the planet suddenly stopped working on 1 January, 2000? (Bear with me; I know the thread isn’t about Y2K — give me more credit than that.)

You don’t remember that catastrophe? That’s because it didn’t happen.

Nathan Muir provides a hint about how that crisis was averted.

And do you remember the staggering Depression that lasted from 2008 to 2017, with bank closings and the stock market taking decades to recover? No? That didn’t happen either. Instead a massive stimulus was passed led by GWB (though naturally the spending occurred during Obama’s term). It took only six years for the stock market to set a new all-time record. Under Obama the stock market either Tripled or Quadrupled depending on which average you use. That’s Tripled and Quadrupled with a T and a Q respectively.

Most laughable of all was how the R’s characterized the “Obama Stimulus.” At R insistence, almost $1 trillion of the package took the form of tax cuts but — although every tax cut is as sweet as honey to the R’s — even the tax-cut had to be lumped with Obama’s dastardly Islamo-socialist stimulus to make it appear onerous. :slight_smile: :smack:

Do facts matter? Look at this chart to see that, despite the Bush financial panic of 2008, deficits decreased almost every year of Obama’s terms; and have increased in every Trump year.

Fighting ignorance is hard work, and that’s my contribution for now. If someone wants to contest the facts, please first tell us whether your elementary school math course was based on “Common Core” or something else.

So… What, it’s not okay when Obama does it, but somehow Trump does it even worse, it’s fine? This thread, last I checked, is about the tax cuts implemented by the Trump administration. If you’d like to talk about the Obama administration’s deficits, may I recommend your own thread? :slight_smile: