Trump wants credit

The tax bill that gives the vast majority of its benefits to the rich and corporations has passed and President Trump is worried he won’t get the credit:

President Trump signed the most consequential tax legislation in three decades on Friday, even as he complained that he has not been given credit for his administration’s accomplishments during a turbulent first year.

In typical Trump fashion, he cared more about appearances than the actual thing:

There was some discussion in Congress and at the White House that Trump should consider delaying the signing until early 2018 as a way to delay automatic spending cuts that could have been triggered by the tax cuts.

In addition, some companies said that delay would give them more time to adjust to the major changes that the new tax code will mean for their businesses.
However, once Congress reached a deal this week to avoid the possibility of the spending cuts, White House officials signaled that Trump wanted to sign the bill into law as soon as possible.

Also in typical Trump fashion he only wants the credit for the good stuff:

Gary D. Cohn, the director of the White House’s National Economic Council, said Wednesday the administration tried more than two dozen times to eliminate the carried interest loophole and that, as recently as this week, Trump asked why it was not gone.
Cohn, a former top Goldman Sachs executive, said opposition from lobbyists and lawmakers on Capitol Hill was intense and that the best that could be done was to extend the “holding period” for investments that qualify for the tax break to three years from one.
“The president strongly believes, and he ran on this, that carried interest is a loophole,” Cohn said at an event sponsored by Axios.

He was powerless to do anything, but he should get credit for the bill anyway.

The bill contains many things that have been shown to be bad for the economy, such as:

Kansas eliminated state taxes on pass-through income in 2012, and the outcome was not what backers had expected.
In the three years after the law took effect in Kansas, the number of residents claiming pass-through income jumped 20 percent. As a result, the state lost $200 million to $300 million in tax revenue a year, according to estimates by The Tax Foundation, with most of the gains going to wealthy business owners, some of whom simply restructured existing companies to take advantage of the lower rates. Facing a budget crisis, Kansas lawmakers repealed the tax cut earlier this year.

So, no problem Mr. Trump, we will give you all the credit for this awful bill.

Republican Tax Cuts

So the Republicans have passed their Tax Cuts for the rich bill in the Senate and it’s everything you have come to expect in a Republican bill:

With the Senate split 52 to 48, Republicans barely had votes to spare. But the bill’s passage was made possible by a near-complete Republican embrace of the idea that about $1.5 trillion of tax cuts will pay for themselves, by producing enough economic growth and additional federal revenue to offset their costs to the Treasury.

That belief was contradicted by several studies, including one from Congress’s official economic scorekeeper, which Republicans dismissed as overly pessimistic.

Mr. McConnell waved off any deficit concerns. “I’m totally confident this is a revenue-neutral bill,” he said. “I think it’s going to be a revenue producer.”

Ignore Senate rules: check; ignore facts: check; help the wealthy: check. And look at the actual bill which was made public about two hours before voting began (of course lobbyists helped write the thing so had it long before that) and included pages such as (click to see the pdf):

Doc1

Kevin Drum lists some the things added to get some votes:

The senator from Texas is getting a break for private (i.e., mostly Christian) school tuition. The senator from Kentucky won passage of a provision allowing car dealers to deduct interest paid on loans to stock showrooms. The senator from Missouri, whose son is a lobbyist for MillerCoors, scored a provision that cuts taxes on imported beer and liquor. The senator from Georgia, home of Delta Airlines, got a provision that penalizes foreign airlines. This is all being done via handwritten notes at the last second, and the result is that about $600 billion of taxing and spending has been redirected within 24 hours without a single hearing.

Congratulations Republicans, you have passed a horrible bill.

Donald Trump is a sick joke

So the pick to be the interim leader at the Consumer Financial Protection Bureau is:

Richard Cordray, the Obama-appointed leader of the bureau, abruptly announced he would leave the job at the close of business, a week earlier than anticipated. He followed up with a letter naming his chief of staff, Leandra English, as the agency’s deputy director.

The White House retaliated, saying that the budget director, Mick Mulvaney, who once characterized the consumer protection bureau as a “sad, sick joke,” would be running the agency.

Mulvaney tries the usual lies:

“I believe Americans deserve a C.F.P.B. that seeks to protect them while ensuring free and fair markets for all consumers,” he said in a statement. “Financial services are the engine of American democratic capitalism, and we need to let it work.”

Grab your wallet when a Republican says they want to protect the consumer. Mulvaney doesn’t like the CPFB:

Mr. Mulvaney, who as a Republican congressman from South Carolina was a co-sponsor of legislation to shut down the consumer bureau, had been widely anticipated.

Really doesn’t like it:

‘‘The place is a wonderful example of how a bureaucracy will function if it has no accountability to anybody,’’ he told the Credit Union Times in 2014. ‘‘It turns up being a joke in a sick, sad kind of way.’’

This is a typical Trump appointment, he wants to get rid of the agency he has been assigned to run. I’m assuming the courts will have to weigh in on this, hopefully we get to keep someone who wants to keep the CFPB for a little while longer.

Republican tax cuts

Hey, it seems that Donald Trump’s tax ‘proposal’ (basically one page of notes) has been analyzed. Take a look:

A new analysis by the Tax Policy Center finds that the tax cuts included in the Trump administration’s outline for tax reform released in April could cut federal revenues by as much as $7.8 trillion over 10 years, and that the benefits would go almost exclusively to the top 5 percent of earners.

Even if the plan included some very large tax hikes to offset the cuts (like doing away with personal exemptions and other common deductions) and taking into account effect on economic growth, the cost still comes to $3.4 trillion over 10 years.

The revenue raisers also serve to make Trump’s plan even more regressive. If you just look at the tax cuts he’s proposing, 60.9 percent of the benefits go to the top 1 percent of Americans. That’s a pretty astonishing tilt toward the rich. But if you look at the combined effects of the cuts and the revenue raisers, 76.3 percent of the benefits go to the top 1 percent, and 94.8 percent go to the top 5 percent.

Trump’s proposal gives the vast majority of the tax cuts to the rich and blows a hole in the budget? I’m stunned. Or the opposite of that.

Renewable energy helps the economy

So Trump is taking the US out of the Paris agreement and still won’t say that he believes in global warming:

Environmental Protection Agency Administrator Scott Pruitt was asked the same question over and over and over again during a Friday briefing with reporters: Does President Trump still believe global warming is a hoax?

And each time, Pruitt refused to answer with a ‘‘yes’’ or a ‘‘no,’’ telling reporters that as he and the president discussed exiting the Paris climate deal, the topic of climate change never came up.

‘‘All the discussions that we had through the last several weeks have been focused on one singular issue: Is Paris good or not for this country?’’ Pruitt said when asked the question a first time. ‘‘That’s the discussions I’ve had with the president. So, that’s been my focus.’’

Trump has long been skeptical of climate change, despite vast scientific evidence showing that human activity has contributed to the problem, and has repeatedly suggested that it is a ‘‘hoax.’’ A Vox analysis found that Trump has tweeted such skepticism at least 115 times since 2011, describing global warming as ‘‘mythical,’’ ‘‘nonexistent,’’ ‘‘fictional,’’ an ‘‘expensive hoax’’ and ‘‘bulls—.’’

Let’s look at the economics:

Trump sees this move as a way to help stoke the nation’s coal industry. But coal’s importance is expected to dwindle anyway. New England’s largest coal plant, the Brayton Point complex in Somerset, closed for good this week. The main reason: It simply couldn’t compete with cheaper natural gas-fired plants.

Nearly 66,000 people work in the coal industry nationwide, compared to roughly 100,000 clean-energy jobs in Massachusetts alone.

Trump is already trying to take an ax to renewable energy programs. The president proposed a 69 percent cut to the Office of Energy Efficiency and Renewable Energy, which funds advances in everything from automobiles to wind power.

More troubling for Massachusetts: Trump proposed eliminating the “ARPA-E” program, which subsidizes high-tech energy research. Massachusetts has been the second largest beneficiary of ARPA-E grants after California, with more than $150 million flowing into the state since the program’s inception in 2009.

The US under Trump is reducing its funding for the part of the energy sector that is growing faster than any other. Maybe there’s still time to bring back the buggy whip industry.

Wellness programs don’t really work … except for employers

I’m a little slow on this but it seems companies really want to get genetic information on employees:

A little-noticed bill moving through Congress would allow companies to require employees to undergo genetic testing or risk paying a penalty of thousands of dollars, and would let employers see that genetic and other health information.

Employers got virtually everything they wanted for their workplace wellness programs during the Obama administration. The ACA allowed them to charge employees 30 percent, and possibly 50 percent, more for health insurance if they declined to participate in the “voluntary” programs, which typically include cholesterol and other screenings; health questionnaires that ask about personal habits, including plans to get pregnant; and sometimes weight loss and smoking cessation classes. And in rules that Obama’s Equal Employment Opportunity Commission issued last year, a workplace wellness program counts as “voluntary” even if workers have to pay thousands of dollars more in premiums and deductibles if they don’t participate.

That doesn’t sound very good but at least it helps the health of employees:

Rigorous studies by researchers not tied to the $8 billion wellness industry have shown that the programs improve employee health little if at all. An industry group recently concluded that they save so little on medical costs that, on average, the programs lose money. But employers continue to embrace them, partly as a way to shift more health care costs to workers, including by penalizing them financially.

and from here:

The so-called “Safeway Amendment” was added to the ACA. Now, if you fail, or refuse to take part in, your employer’s “voluntary” wellness test, it can increase your premium by 30 percent — or, if you’re a smoker who refuses to quit, by 50 percent.

There is no evidence that this new rule produced a significant drop in America’s health-care costs. And that isn’t terribly surprising — since Burd’s column was composed almost entirely of lies.

“[A] review of Safeway documents and interviews with company officials show that the company did not keep health-care costs flat for four years, the Washington Postreported in January 2010. “Those costs did drop in 2006 — by 12.5 percent. That was when the company overhauled its benefits … the decline did not have anything to do with tying employees’ premiums to test results. That element of Safeway’s benefits plan was not implemented until 2009.”

In other words, Safeway reduced costs for a single year by raising its employees’ deductibles. It didn’t save money by encouraging its workers to lead healthier lives — it saved money by making its workers pay a larger portion of their health-care costs.

Gee, it doesn’t help the employees but does help the employers. What a shock. And it gets better:

The privacy concerns also arise from how workplace wellness programs work. Employers, especially large ones, generally hire outside companies to run them. These companies are largely unregulated, and they are allowed to see genetic test results with employee names.

They sometimes sell the health information they collect from employees. As a result, employees get unexpected pitches for everything from weight-loss programs to running shoes, thanks to countless strangers poring over their health and genetic information.

So, to summarize, Obama and Congress were convinced to put a provision into the ACA that did basically shifted costs from the employer to the employee for little or no health benefits and now the GOP wants to expand that provision. You have to love it.

But it helps the rich

It seems the Trump administration is contemplating a tax break so corporations will repatriate cash:

Drug makers are promising to create tens of thousands of American jobs if President Donald Trump follows through on his promise to give them a big tax break if they “repatriate” cash they’ve stashed overseas.

The article points to a Senate report: repatriatingoffshorefundsreportoct202011wexhibitsfinal. Here are the conclusions in the executive summary:

1. U.S. Jobs Lost Rather Than Gained. After repatriating over $150 billion under the 2004 American Jobs Creation Act (AJCA), the top 15 repatriating corporations reduced their overall U.S. workforce by 20,931 jobs, while broad-based studies of all 840 repatriating corporations found no evidence that repatriated funds increased overall U.S. employment.
2. Research and Development Expenditures Did Not Accelerate. After repatriating over $150 billion, the 15 top repatriating corporations showed slight decreases in the pace of their U.S. research and development expenditures, while broad-based studies of all 840 repatriating corporations found no evidence that repatriation funds increased overall U.S. research and development outlays.
3. Stock Repurchases Increased After Repatriation. Despite a prohibition on using repatriated funds for stock repurchases, the top 15 repatriating corporations accelerated their spending on stock buybacks after repatriation, increasing them 16% from 2004 to 2005, and 38% from 2005 to 2006, while a broad-based study of all 840 repatriating corporations estimated that each extra dollar of repatriated cash was associated with an increase of between 60 and 92 cents in payouts to shareholders.
4. Executive Compensation Increased After Repatriation. Despite a prohibition on using repatriated funds for executive compensation, after repatriating over $150 billion, annual compensation for the top five executives at the top 15 repatriating corporations jumped 27% from 2004 to 2005, and another 30%, from 2005 to 2006, with ten of the corporations issuing restricted stock awards of $1 million or more to senior executives.
5. Only a Narrow Sector of Multinationals Benefited. Repatriation primarily benefited a narrow slice of the American economy, returning about $140 billion in repatriated dollars to multinational corporations in the pharmaceutical and technology industries, while providing no benefit to domestic firms that chose not to engage in offshore operations or investments.
6. Most Repatriated Funds Flowed from Tax Havens. Funds were repatriated primarily from low tax or tax haven jurisdictions; seven of the surveyed corporations repatriated between 90% and 100% of their funds from tax havens.
7. Offshore Funds Increased After 2004 Repatriation. Since the 2004 AJCA repatriation, the corporations that repatriated substantial sums have built up their 5 offshore funds at a greater rate than before the AJCA, evidence that repatriation has encouraged the shifting of more corporate dollars and investments offshore.
8. More than $2 Trillion in Cash Assets Now Held by U.S. Corporations. In 2011, U.S. corporations have record domestic cash assets of around $2 trillion, indicating that that the availability of cash is not constraining hiring or domestic investment decisions and that allowing corporations to repatriate more cash would be an ineffective way to spur new jobs.
9. Repatriation is a Failed Tax Policy. The 2004 repatriation cost the U.S. Treasury an estimated net revenue loss of $3.3 billion over ten years, produced no appreciable increase in U.S. jobs or research investments, and led to U.S. corporations directing more funds offshore.

So it worked very well for the rich. I can see why the Trump administration would be for it.

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