THE GRIFTERS: Party Of Liars — GOP Tax Plan Proposes To Loot America For the Rich, Limit Government Services For Everyone Else, & Leave Future Generations To Pay The Price — Not Surprisingly, They Lie About It And Assume That Non-Fat-Cat Supporters Are Too Dumb Or Biased to Figure It Out! — Fact Checker Gives GOP Politicos Coveted “Four Pinocchios!”

https://www.washingtonpost.com/news/fact-checker/wp/2017/09/29/trump-aides-sell-tax-plan-with-pinocchio-laden-claims/

Glenn Kessler writes for the “Fact Checker” in the Washington Post.

The wealthy are not getting a tax cut under our plan.”
— Gary Cohn, director of the White House Economic Council, in an interview on ABC’s “Good Morning America,” Sept. 28, 2017

“The numbers are about a trillion and a half to the baseline. But more importantly, it’s a trillion dollars to policy, which is the right way of looking at it. We think there will be $2 trillion of growth. So we think this tax plan will cut down the deficits by a trillion dollars.”
— Treasury Secretary Steve Mnuchin, in an interview on Fox News, Sept. 28

In selling President Trump’s tax plan, his aides have resorted to making strikingly misleading statements to defend it.

At the moment, there are few details about the tax plan, only broad strokes. That makes it easier for the administration to make big claims as analysts scramble to try to make sense of the plan’s possible impact. That will be much harder once an actual tax bill is written and the details can be analyzed in depth.

In the meantime, we have a pair of Four-Pinocchio claims that are worth highlighting.

 

‘The wealthy are not getting a tax cut under our plan’

The Trump tax plan drops the top bracket from 39.6 to 35 percent, and allows for the possibility of a 25 percent top rate through a pass-through entity. It presumably would also eliminate a 3.8 percent Obamacare tax on investment income that hits only upper-income taxpayers.

So, on its face, this is a ridiculous statement to make for any plan that includes reductions in tax rates. That’s because federal income taxes are paid mostly by the wealthy. So when you cut income tax rates, it results in lots of dollars for the wealthiest taxpayers.

According to Treasury Department data, the top 10 percent of income earners in 2016 paid 80 percent of individual income taxes. The top 20 percent paid 94.8 percent. The top 0.1 percent paid an astonishing 24.5 percent of taxes.

In 2014, the latest year Internal Revenue Service data is available, just the top 400 taxpayers — with $127 billion of income — paid $29.4 billion in income taxes, or more than 2 percent of all income taxes. That’s more than the bottom 70 percent of taxpayers combined.

 

In other words, the vast majority of American taxpayers pay little or nothing in income taxes; they instead mostly pay payroll taxes such as Social Security and Medicare. So it really strains credulity for administration officials such as Cohn to say the wealthy will not get a tax cut.

The wealthy pay most of the taxes, so unless the tax plan specifically leaves them untouched — which Trump’s plan does not — they will get big tax cuts. This is why distributional tables often look so lopsided when tax rates are reduced. The administration has suggested that another, higher rate level might be added, presumably so the distributional tables won’t look so ugly, but right now the plan calls for a significant reduction in the top rate.

Besides a reduction in the top tax rate, the tax plan would eliminate the alternative minimum tax (AMT). That in theory should be a boon for the wealthy as well, although it increasingly has snared families in the upper middle class, especially if they live in high-tax states or have many children.

 

The administration has called for eliminating the itemized deduction for state and local taxes, as well as the personal/dependent exemptions, which are key add-ons when calculating the AMT. (If those items were eliminated from the AMT, the number of tax filers facing the AMT would drop by 95 percent, according to the Joint Committee of Taxation.)

So it’s possible that for many people it would be a wash, or even a net loser, depending on whether a tax filer lives in a state with high taxes. According to JCT, the AMT is paid by 36 percent of returns with income of between $200,000 and $500,000, nearly 55 percent between $500,000 and $1 million, and nearly 18 percent above $1 million.

Still, in 2014, the top 400 taxpayers paid nearly $700 million because of the alternative minimum tax, nearly 2.5 percent of the total. The one recent tax return of President Trump that has leaked — for 2005 — shows his tax bill increased $31 million because of the AMT.

Finally, the tax plan calls for eliminating the estate tax, although it is unclear on whether any tax would be required when someone dies. Currently, the estate tax is estimated to affect only about 5,500 estates out of nearly 3 million estates because as much as $11 million can be shielded from taxation.

 

In theory, assets would be subject to capital gains tax instead, which could actually affect more people, but that has not been specified in the administration’s tax outline. If the administration also eliminates the gift tax and does not tax capital gains at death, some income earned by the wealthy may never be taxed.

“We strongly believe the final tax bill will not cut taxes for the wealthy as a class — but there is no way to solve for every single individual in the country,” a White House official said.

‘We think this tax plan will cut down the deficits by a trillion dollars’

Mnuchin made this statement in response to an observation that the nonpartisan Committee for a Responsible Federal Budget has estimated the tax plan would reduce revenue by $2.2 trillion over 10 years. (Including additional interest on the debt, CRFB estimated the deficit would increase by $2.7 trillion.) He argued that instead there would be an additional $2 trillion in revenue from economic growth, resulting in a $1 trillion reduction in the deficit.

Cohn, briefing reporters at the White House a few hours later, offered a different estimate: “We know that 1 percent change in GDP will add $3 trillion back. So if they’re right, we’re only going to pay down $800 billion of the deficit. I’ll live with a $800 billion paydown.”

It’s a little odd that Mnuchin is anticipating $2 trillion in revenue and Cohn is anticipating $3 trillion in revenue. But these are both very rosy estimates of the impact of a tax cut in economic growth. No serious economist believes that a tax cut boosts economic growth so much that the tax cut pays for itself.

The Congressional Budget Office, under Douglas Holtz-Eakin, a Republican, in 2005 estimated that a 10 percent reduction in federal income tax rates would have macroeconomic feedbacks of between 15 and 30 percent. In other words, a $1 trillion tax cut might yield $150 billion to $300 billion in additional revenue. That still means a reduction in revenue of as much as $700 billion.

“The big problem is that there is no fully specified plan,” Holtz-Eakin said. “Without one, you can’t gauge the growth or know the budget cost. I’m broadly sympathetic to the framework, but it is a start, not the finish.”

As Holtz-Eakin put it earlier this year in an opinion column for The Washington Post: “Proposing trillions of dollars in tax cuts and then casually asserting that such a plan would ‘pay for itself with growth’ … is detached from empirical reality.”

Indeed, contrary to popular perception, even Ronald Reagan predicted revenue would fall as a result of his big 1981 tax cut that reduced tax rates. That is shown in Reagan administration and Congressional Budget Office scores of the Reagan tax plan reproduced in a 2011 article for Tax Notes by Bruce Bartlett, who helped craft the 1981 tax cut as a congressional aide at the time. The estimates turned out to be wrong because the 1981-1982 recession was deeper than expected and inflation fell more rapidly than expected, so Reagan boosted taxes just one year after his tax cut.

William A. Niskanen, chairman of Reagan’s Council of Economic Advisors, co-wrote a paper in 1996 that defended Reagan’s economic record but also said it was “an enduring myth” that Reagan officials believed tax cuts would pay for themselves. “This was nonsense from day one, because the credible evidence overwhelmingly indicates that revenue feedbacks from tax cuts is 35 cents per dollar, at most,” Niskanen wrote, noting that “the Reagan administration never assumed that the tax cuts would pay for themselves.”

A Treasury Department study on the impact of tax bills since 1940, first released in 2006 and later updated, found that the 1981 tax cut reduced revenue by $208 billion in its first four years. George W. Bush’s 2001 tax cut — also a rate cut — led to a revenue loss of $91 billion, over four years, the Treasury paper calculated. (The figures are rendered in constant 2012 dollars.)

Both the Reagan and Bush tax cuts came during periods of economic stress, which is certainly not the case now. So there is less room now for a big swing upward in the economy, especially with the country’s aging workforce.

The Treasury Department did not respond to a query for an explanation of Mnuchin’s math. But frankly it is irresponsible for a treasury secretary to claim a certain amount of growth or revenue without even producing the details of a plan, as the details determine the impact on the economy.

The Pinocchio Test

Though the details of the tax plan are sparse, both Cohn and Mnuchin made statements that are simply false. Of course the wealthy will do well under the tax cut, even if certain deductions are eliminated, and it’s silly to pretend otherwise. And it’s a fantasy to claim that the tax cut will pay for itself — and even reduce the deficit — especially in an economy that already has low unemployment and a booming stock market.

Four 🤥

The wealthy are not getting a tax cut under our plan.”
— Gary Cohn, director of the White House Economic Council, in an interview on ABC’s “Good Morning America,” Sept. 28, 2017

“The numbers are about a trillion and a half to the baseline. But more importantly, it’s a trillion dollars to policy, which is the right way of looking at it. We think there will be $2 trillion of growth. So we think this tax plan will cut down the deficits by a trillion dollars.”
— Treasury Secretary Steve Mnuchin, in an interview on Fox News, Sept. 28

In selling President Trump’s tax plan, his aides have resorted to making strikingly misleading statements to defend it.

At the moment, there are few details about the tax plan, only broad strokes. That makes it easier for the administration to make big claims as analysts scramble to try to make sense of the plan’s possible impact. That will be much harder once an actual tax bill is written and the details can be analyzed in depth.

In the meantime, we have a pair of Four-Pinocchio claims that are worth highlighting.

 

‘The wealthy are not getting a tax cut under our plan’

The Trump tax plan drops the top bracket from 39.6 to 35 percent, and allows for the possibility of a 25 percent top rate through a pass-through entity. It presumably would also eliminate a 3.8 percent Obamacare tax on investment income that hits only upper-income taxpayers.

So, on its face, this is a ridiculous statement to make for any plan that includes reductions in tax rates. That’s because federal income taxes are paid mostly by the wealthy. So when you cut income tax rates, it results in lots of dollars for the wealthiest taxpayers.

According to Treasury Department data, the top 10 percent of income earners in 2016 paid 80 percent of individual income taxes. The top 20 percent paid 94.8 percent. The top 0.1 percent paid an astonishing 24.5 percent of taxes.

In 2014, the latest year Internal Revenue Service data is available, just the top 400 taxpayers — with $127 billion of income — paid $29.4 billion in income taxes, or more than 2 percent of all income taxes. That’s more than the bottom 70 percent of taxpayers combined.

 

In other words, the vast majority of American taxpayers pay little or nothing in income taxes; they instead mostly pay payroll taxes such as Social Security and Medicare. So it really strains credulity for administration officials such as Cohn to say the wealthy will not get a tax cut.

The wealthy pay most of the taxes, so unless the tax plan specifically leaves them untouched — which Trump’s plan does not — they will get big tax cuts. This is why distributional tables often look so lopsided when tax rates are reduced. The administration has suggested that another, higher rate level might be added, presumably so the distributional tables won’t look so ugly, but right now the plan calls for a significant reduction in the top rate.

Besides a reduction in the top tax rate, the tax plan would eliminate the alternative minimum tax (AMT). That in theory should be a boon for the wealthy as well, although it increasingly has snared families in the upper middle class, especially if they live in high-tax states or have many children.

 

The administration has called for eliminating the itemized deduction for state and local taxes, as well as the personal/dependent exemptions, which are key add-ons when calculating the AMT. (If those items were eliminated from the AMT, the number of tax filers facing the AMT would drop by 95 percent, according to the Joint Committee of Taxation.)

So it’s possible that for many people it would be a wash, or even a net loser, depending on whether a tax filer lives in a state with high taxes. According to JCT, the AMT is paid by 36 percent of returns with income of between $200,000 and $500,000, nearly 55 percent between $500,000 and $1 million, and nearly 18 percent above $1 million.

Still, in 2014, the top 400 taxpayers paid nearly $700 million because of the alternative minimum tax, nearly 2.5 percent of the total. The one recent tax return of President Trump that has leaked — for 2005 — shows his tax bill increased $31 million because of the AMT.

Finally, the tax plan calls for eliminating the estate tax, although it is unclear on whether any tax would be required when someone dies. Currently, the estate tax is estimated to affect only about 5,500 estates out of nearly 3 million estates because as much as $11 million can be shielded from taxation.

 

In theory, assets would be subject to capital gains tax instead, which could actually affect more people, but that has not been specified in the administration’s tax outline. If the administration also eliminates the gift tax and does not tax capital gains at death, some income earned by the wealthy may never be taxed.

“We strongly believe the final tax bill will not cut taxes for the wealthy as a class — but there is no way to solve for every single individual in the country,” a White House official said.

‘We think this tax plan will cut down the deficits by a trillion dollars’

Mnuchin made this statement in response to an observation that the nonpartisan Committee for a Responsible Federal Budget has estimated the tax plan would reduce revenue by $2.2 trillion over 10 years. (Including additional interest on the debt, CRFB estimated the deficit would increase by $2.7 trillion.) He argued that instead there would be an additional $2 trillion in revenue from economic growth, resulting in a $1 trillion reduction in the deficit.

Cohn, briefing reporters at the White House a few hours later, offered a different estimate: “We know that 1 percent change in GDP will add $3 trillion back. So if they’re right, we’re only going to pay down $800 billion of the deficit. I’ll live with a $800 billion paydown.”

It’s a little odd that Mnuchin is anticipating $2 trillion in revenue and Cohn is anticipating $3 trillion in revenue. But these are both very rosy estimates of the impact of a tax cut in economic growth. No serious economist believes that a tax cut boosts economic growth so much that the tax cut pays for itself.

The Congressional Budget Office, under Douglas Holtz-Eakin, a Republican, in 2005 estimated that a 10 percent reduction in federal income tax rates would have macroeconomic feedbacks of between 15 and 30 percent. In other words, a $1 trillion tax cut might yield $150 billion to $300 billion in additional revenue. That still means a reduction in revenue of as much as $700 billion.

“The big problem is that there is no fully specified plan,” Holtz-Eakin said. “Without one, you can’t gauge the growth or know the budget cost. I’m broadly sympathetic to the framework, but it is a start, not the finish.”

As Holtz-Eakin put it earlier this year in an opinion column for The Washington Post: “Proposing trillions of dollars in tax cuts and then casually asserting that such a plan would ‘pay for itself with growth’ … is detached from empirical reality.”

Indeed, contrary to popular perception, even Ronald Reagan predicted revenue would fall as a result of his big 1981 tax cut that reduced tax rates. That is shown in Reagan administration and Congressional Budget Office scores of the Reagan tax plan reproduced in a 2011 article for Tax Notes by Bruce Bartlett, who helped craft the 1981 tax cut as a congressional aide at the time. The estimates turned out to be wrong because the 1981-1982 recession was deeper than expected and inflation fell more rapidly than expected, so Reagan boosted taxes just one year after his tax cut.

William A. Niskanen, chairman of Reagan’s Council of Economic Advisors, co-wrote a paper in 1996 that defended Reagan’s economic record but also said it was “an enduring myth” that Reagan officials believed tax cuts would pay for themselves. “This was nonsense from day one, because the credible evidence overwhelmingly indicates that revenue feedbacks from tax cuts is 35 cents per dollar, at most,” Niskanen wrote, noting that “the Reagan administration never assumed that the tax cuts would pay for themselves.”

A Treasury Department study on the impact of tax bills since 1940, first released in 2006 and later updated, found that the 1981 tax cut reduced revenue by $208 billion in its first four years. George W. Bush’s 2001 tax cut — also a rate cut — led to a revenue loss of $91 billion, over four years, the Treasury paper calculated. (The figures are rendered in constant 2012 dollars.)

Both the Reagan and Bush tax cuts came during periods of economic stress, which is certainly not the case now. So there is less room now for a big swing upward in the economy, especially with the country’s aging workforce.

The Treasury Department did not respond to a query for an explanation of Mnuchin’s math. But frankly it is irresponsible for a treasury secretary to claim a certain amount of growth or revenue without even producing the details of a plan, as the details determine the impact on the economy.

The Pinocchio Test

Though the details of the tax plan are sparse, both Cohn and Mnuchin made statements that are simply false. Of course the wealthy will do well under the tax cut, even if certain deductions are eliminated, and it’s silly to pretend otherwise. And it’s a fantasy to claim that the tax cut will pay for itself — and even reduce the deficit — especially in an economy that already has low unemployment and a booming stock market.

Four 🤥 🤥 🤥 🤥

********************************************

Four Pinocchios is getting into “Jeff Sessions’s territory!”

But, I can see that they were richly deserved. I watched Steve “Munchkin” Mnuchkin on “Meet the Press” with Churck Todd this AM.  It was appalling!

Munchkin lied about Puerto Rico, lied about the tax plan, and then lied and tried to cover up his own responsibility for trying to get a “freebie” at taxpayer expense for his honeymoon. The idea that there was any “national security” reason for the Munchkin keeping in touch with the White House is preposterous.

Indeed the very idea that Munchkin would have any role in national security other than making sure the checks don’t bounce is prima facie ridiculous. And, if he did, that’s what secure facilities in the CIA part of the nearest U.S. Embassy are for. Or for that matter, that’s what subordinates in the Trasure Department are for. Gotta believe that every once and awhile spooks have to make secure communications with Washington.

When confronted by Todd with his obvious lies and cover-ups, Munchkin just kept on spewing whoppers. Finally, Todd gave up, thanked him, and let the record speak for itself.

PWS

10-01-17

 

 

NEWSWEEK: Gonzo Apocalypto’s Next Targets: The 1st Amendment & Reporters — Truth-Challenged Press Conference Assails “Leakers!”

http://www.newsweek.com/sessions-leaks-trump-fired-fake-news-media-cnn-mueller-comey-obama-golf-646838?spMailingID=2132659&spUserID=MzQ4OTU2OTQxNTES1&spJobID=850160461&spReportId=ODUwMTYwNDYxS0

Jeff Stein reports:

“Another day, another Donald Trump show. The president was absent from the elaborate press conference that Attorney General Jeff sessions held at the Justice Department on Friday to showcase the administration’s intent to crack down on leaks.

But his looming presence was palpable. The president reportedly often watches and critiques the TV performance of his officials.

“This culture of leaking must stop,” Sessions said, echoing Trump’s increasingly bitter tweets.

Flanking Sessions were Deputy Attorney General Rod Rosenstein, the Director of National Intelligence, Daniel Coats and William Evanina, head of the little-known National Counterintelligence and Security Center.

“Conspicuously absent,” The Washington Post noted, “were representatives for the FBI, which generally investigates leaks.” Rosenstein said the new FBI Director, Christopher Wray, wasn’t there because he had just started his job this week.

Unlikely. Wray’s office is just a short walk across Pennsylvania Avenue from the Justice Department. If Wray were unavailable, plenty of other top FBI officials certainly were. Under a president obsessed with how his officials come across on television, the exclusion of them seemed deliberate.

. . . . .

The tableau presented by Sessions, who is struggling to hold on to his job after weeks of withering criticism from Trump for recusing himself from the Russia investigation, seemed designed to suggest to the president’s political base that other, more trusted security agencies would play a prominent role in the leak investigation.

Not going to happen. As opposed to what the TV pictures might suggest, U.S. intelligence agencies are barred from criminal investigations of leaks (although they conduct their own internal probes).  

“Only the FBI has jurisdiction to conduct that type of investigation,” Robert L. Dietz, who has held senior legal positions at the CIA, NSA, the National Geo-Spatial Agency and the Defense Department, tells Newsweek. “Indeed, the entire intel establishment has no authority over leaks.”

. . . .

Historically, critics of leak investigations, including government officials, have called them “a fool’s errand.” They can often lead right back to the offices of the White House or cabinet official who demanded them.

But Sessions added a dark element to his Friday announcement, suggesting he might start issuing subpoenas to reporters. The secret monitoring of media organizations could well accompany such investigations, history shows.

Press freedom organizations denounced the idea. The Reporters Committee for Freedom of the Press said it would “strongly oppose” a revision of Obama administration guidelines generally prohibiting such subpoenas. It also announced it had set up a toll-free hotline for reporters to call for legal advice if they got a subpoena.

Most leaks involving controversial Trump administration policies and its in-fighting and chaos have not included classified information. But some national security officials, both Democrats and Republicans, said Thursday they were shocked by the leaks of complete transcripts of Trump’s private telephone conversations with the president of Mexico and prime minister of Australia. Both transcripts revealed Trump saying things in stark contrast to his public positions. He had denounced previous reports characterizing the calls—accurately, as it turned out—as “fake news.” Sessions indicated he was going to get to the bottom of who leaked the transcripts.

But far from being investigated and punished, whistleblowers should be recognized as playing an important role in a democracy, says Danielle Brian, executive director of the Project on Government Oversight, a Washington, D.C. nongovernmental organization. Leak probes, she said, can stumble onto rightful efforts to expose crimes by government officials.

“Whistleblowers are the nation’s first line of defense against fraud, waste, abuse and illegality within the federal government,” Brian told The Washington Post. “The last thing this administration wants to do is to deter whistleblowing in an effort to stymie leaks.”

*************************************************

Notable that Sessions’s so-called “press conference” (is it really a “press conference” if you don’t take questions from the press?) was actually a performance aimed at reassuring President Trump that he was “on message” after being accused (falsely) by the President of being “weak on leaks.”

There is one major disclosure of classified information that should concern all Americans: Trump’s cavalier offering of sensitive documents to the Russians, who are not our friends or allies. Other than that, most of the “leaked” information consists of what NBC’s Chuck Todd would call “water cooler stuff” that more likely than not was “leaked” by members of Trump’s own “inner circle” as part of the never ending “palace intrigues” and “power struggles” surrounding the West Wing. While it’s easy to understand why truth could be embarrassing to Trump and his minions, its not by any means a threat to national security. No, the biggest REAL thereat to our national security remains President Trump himself.

PWS

08-07-17

BREAKING: DHS Secretary John Kelly Finds Readmission Of LPRs In The “National Interest” — Text Of Statement Below

STATEMENT BY SECRETARY JOHN KELLY ON THE ENTRY OF LAWFUL PERMANENT RESIDENTS INTO THE UNITED STATES

WASHINGTON – In applying the provisions of the president’s executive order, I hereby deem the entry of lawful permanent residents to be in the national interest.

Accordingly, absent the receipt of significant derogatory information indicating a serious threat to public safety and welfare, lawful permanent resident status will be a dispositive factor in our case-by-case determinations.

*******************************

According to Chuck Todd on “Meet The Press” this AM, the DHS opposed the inclusion of “green card holders” in the EO, but their objections apparently were ignored by the Trump WH staff who did the drafting (without much thought or consultation, it appears).

I must admit to hoping that Gen. Kelly at DHS and Gen. Mattis at DOD would be the “adults in the room” on some of these issues. The problem might be that they aren’t “in  the room” when the decisions are made.

With guys like Steve Bannon, Kris Kobach and Stephen Miller, with well- established track records of poor judgement and divisiveness (and that’s putting it charitably) mis-advising Trump on immigration, it’s likely to be an uphill climb for anyone purporting to be the voice of reason and sound judgment. And, I’m certainly not trying to give Trump a pass here; he selected and empowered this  team of  spectacularly unqualified senior advisors.

PWS

01/29/17