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

 

 

THE LIARS ON THE HILL: Spurred By Trump’s Example, GOP Legislators and Politicos In Washington Have Taken Outright Lying And Knowingly Spreading False Narratives To A New Level

Dave Leonhardt writes in “Opinion Today” at the NYT:

“First, health care: Here’s a giveway about how bad the new Senate health care bill is: Bill Cassidy, one of its authors, keeps trying to sell it by telling untruths.
“The relatively new phenomenon of just ‘up is down’ lying about your bill’s impacts is jarring,” says Loren Adler of the USC-Brookings-Schaeffer Initiative on Health Policy.
Most egregiously, Cassidy is claiming that the bill would not ultimately deprive sick people of health insurance. That’s false, as NPR calmly explained when Cassidy said otherwise.
In fact, the bill — known as Graham-Cassidy — would free states to remove insurance protections for people with pre-existing conditions. Without those protections, insurers could price such people out of the market.

If you get cancer (or even have a family history of it) or your child is born with a birth defect — among many, many other health issues — you could find yourself unable to buy insurance. Without insurance, you could be denied crucial treatments. In a tangible way, Graham-Cassidy would harm millions of Americans.
Aviva Aron-Dine and Sarah Kliff have both written good explainers on this issue. As Kliff notes, “There is literally no analysis” to support Cassidy’s claim that the bill would expand the number of insured.
Jimmy Kimmel, the country’s most unexpected health wonk, has urged Cassidy to stop “jamming this horrible bill down our throats.”

Insurers came out against the bill yesterday, joining doctors, hospitals, AARP, patient advocates, multiple governors and others.
Meanwhile, Republican leaders are trying to win the vote of Lisa Murkowski — one of three Republican senators who voted against a previous Obamacare repeal bill, in July — by funneling money to Alaska.
In the least surprising development of all, President Trump is now repeating Cassidy’s falsehoods.
The last word on health care this morning goes to Nicholas Bagley of the University of Michigan. “Graham-Cassidy is a brazen effort to block any level of government, state or federal, from achieving near-universal coverage,” he writes. “That’s what the debate is about. Everything else is just noise.”

Read Leonhardt’s entire piece with working links to his sources and citations at this link:

https://www.nytimes.com/newsletters/2017/09/21/opinion-today?nlid=79213886

 

And Leonhardt is by no means the only one blowing the whistle on the GOP’s latest War on America. Among many others, the Washington Post’s “Fact Checker” awarded Senator Cassidy “Three Pinocchios” for his false claims about coverage:

“Regular readers of The Fact Checker know that the burden of proof falls on the person making the claim. Cassidy has provided little evidence to support his claim of more coverage, except that innovation would flourish and help bring down costs and expand coverage. That’s certainly possible, but it would be more plausible if his proposal did not slash funding to such an extent.

Kimmel’s claim that 30 million fewer Americans will have insurance may be a high-end estimate. But already, in 2019, CBO calculations suggest at least 15 million fewer Americans would have insurance once the individual and employer mandates are repealed. Much of that decline might be by choice, but Cassidy insists the gap will be filled and then exceeded in 10 years. Unlike Cassidy, no prominent health-care analyst is willing to venture a guess on coverage levels — but the consensus is that his funding formula makes his claim all but impossible to achieve.

Given the lack of coverage estimates by the CBO or other health-care experts, Cassidy’s claim does not quite rise to Four Pinocchios. But it certainly merits a Three.

Three Pinocchios”

Here’s a link to the complete analysis by the Post’s Glenn Kessler:

https://www.washingtonpost.com/news/fact-checker/wp/2017/09/21/sen-cassidys-rebuttal-to-jimmy-kimmel-more-people-will-have-coverage/

Wow! Three Pinocchios is getting into Trump, Sessions, Miller territory!

PWS

09-21-17

🤥 🤥🤥

 

 

 

Miller Gets Four Pinocchios For Lies About Voter Fraud On ABC!

https://www.washingtonpost.com/news/fact-checker/wp/2017/02/12/stephen-millers-bushels-of-pinocchios-for-false-voter-fraud-claims/?hpid=hp_rhp-more-top-stories_no-name%3Ahomepage%2Fstory&utm_term=.80854c52eafd

The Post Fact Checker Glenn Kessler says:

“The Pinocchio Test

George [Stephanopoulos] is right. The White House continues to provide zero evidence to back up its claims of voter fraud. Officials instead retreat to the same bogus talking points that have been repeatedly shown to be false.

It’s pretty ridiculous to cite research in a way that even the researcher says is inappropriate, and yet Miller keeps saying 14 percent of noncitizens are registered to vote. The Republican governor of New Hampshire has admitted that he was wrong to say buses of illegal voters voted in the election, and yet Miller shamelessly suggests that is the case. Miller cites a supposed expert on voter fraud, Kobach, who has been mocked for failing to prove his own claims of voter fraud. Miller also repeats a claim about people being registered to vote in two states, even though that is not an example of voter fraud.

Miller earns Four Pinocchios — over and over again.

Four Pinocchios”

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

Wow! Most impressive for a 31-year-old whiz kid whose been in his first White House job for about three weeks. Usually, you have to be in the White House much longer to learn how to lie on national TV like that.

PWS

02/12/17