It is like the baby Bush tax cut all over again. Baby Bush claimed that vast-majority of his tax cut went to the middle class. This sounds good to the uninformed but as always figures don’t lie but liars do figure. The Bush tax cuts, like the Trump tax cuts, were supposed to stimulate the economy but in the ten-year life of the Bush tax cuts all they did was add $1.35 trillion to the national debt and spark the biggest recession in history. The Trump tax cuts and the Bush tax cuts are similar with a few differences. Bush cut the taxes on the highest bracket from 39.6% to 35% while Trump cut the same bracket from 39.6% to 37% but they both agreed on one thing the taxes on the middle class would not be cut by one dime the bottom tax bracket remained at 10% in both. Trump did cut the next tax bracket from 15% to 12% for couples making up to a $100,000 but Bush however did not cut this bracket and it remained at 15%. What we know is that the Bush tax stimulus was an expensive failure the $1.35 trillion added to the deficit helped elected the Tea Party who raved about the budget deficit and then turned around and voted for the very same thing that drove the deficit up in the first place.
The federal deficit was only $908 billion in 1980 before Regan took office. By the time Regan left office the debt $2.603 trillion. This is how trickle down economic works it nearly tripled the national debt. Every time the Republicans do this this is what happens.
Now Trump is showing how he made his money by taking the suckers. Trump is actually telling families look what I did for you I doubled the child care credit from $1,000 to $2,000. However he fails to tell them that he took a $4050 personal exemption for each and every child away from them. To be a conman you have to be very brazen to convince the suckers that $1,000 is a lot more than $4,050. There are conmen that make a very good living doing this. Was it P. T. Barnum that said there is a sucker born every day? In this case it looks likes hundreds of millions were born on this day. You need only remember that according to Trump that although taxes had been cut by $5.5 trillion that unfortunately in order to get that figure down to $1.5 trillion taxes had to be raised on others by $4 trillion. We know for a fact that the taxes weren’t raised by $4 trillion on the rich the question then becomes are you one of those who will be paying higher taxes to give the rich $1.5 trillion tax cut. Unfortunately you will not know until you do your taxes in 2019. One thing for sure somebody will pay that $4 trillion.
If the Republican tax scam had been a straight up tax cut it would be one thing but it is not, the Republican tax scam increases taxes by $4 trillion. The Republican tax scam is more like a shell game and the public has no idea what is actually under the shells. I don’t have any trouble seeing the $5.5 trillion in tax cuts. The 20% tax free money going to everyone who owns a business will account for a good portion of that over 10 years. Imagine be guaranteed 20% of your income tax free regardless of how much you make. But the problem I am having is what is under the shells I just haven’t seen enough tax hikes to amount to $4 trillion in fact there are not hardly any tax increases this $4 trillion in tax increases is achieved almost entirely by eliminating tax deductions used by the middle class.
I went back to reread the Internet article, “26 Ways GOP’s Tax Reform Will Affect Your Wallet” and I had not quite finished it and one way was the “kiddie tax” children who live at home and are claimed on their parent’s tax form will be taxed at 38%. These are children up to 24 years old. Under the old tax law children income was taxed at the tax rate of their parents. Which would be 10% for many middle-class children are now going to have to pay 38%. When I was going college, I mowed a number of lawns, worked construction and at a gas station. I could not claim myself as long as I was claimed as a dependent on my parents’ taxes and my money was mostly spending money and tuition. Under the Republican tax scam millionaires will not pay a dime in taxes on the first 20% of their income and students will pay 38% in just federal taxes on their income. Once state and local taxes are added they will take home less than half. In the brave new Trump world the children will pay taxes at a higher tax rate than any billionaire. What is wrong with this picture? I guess if you tax a 100 million teenagers at 38% you can give 400 billionaires 20% of their income tax free.
One thing you learn when you negotiate contracts is don’t fall for the bonus trap. Employers would much rather give bonuses than pay raises. A bonus is a one-time lump sum payment while a pay raise is added to your base pay and collected every year. Wal Mart move to raise the starting salary to $11 (after 90 days training) was not a move to raise the wages of Wal Mart employees other than beginners because Wal Mart’s competitors had already raised wages last fall and many other states had mandated higher minimum wages than Wal Mart was paying. In order to avoid giving pay raises to older employees are being given bonuses. While employees with over 20 years will be given a $1,000 bonus this does not raise their base pay.
Wal-Mart’s raising the starting salary up to $11 is being heralded as being the result of the Republican tax scam showing that companies plan to share their tax savings, but Wal Mart gives raises to employees each and every year they are with the company based on how they perform. The fact that Wal Mart is giving pay raises is not being driven by the Republican tax scam. My wife worked at Wal Mart for eight years and received a pay raise each and every year. There maybe an argument for the bonuses though, but the bonuses are a one-time proposition but remember the businesses got a massive tax cut from 35% to 21% and are trying a public relations stunt to tie the two together in the public’s mind. Reagan’s tax cuts for the rich were so unpopular with the public that they were partially repealed after he left office and the same for baby Bush’s tax cuts. The businesses realize that their massive tax cuts will also likely be repealed when the Republicans are voted out of office even though the Republicans tried to make them “permanent.”
Other businesses, at the end of last year, made a big deal of bonuses and pay raises trying to act as if they were caused by the tax cuts which had not even started but what they failed to say was that these same companies normally gave bonuses and pay raises at that time of the year every year. Some bonuses handed out at that time of year were termed Christmas bonuses and in some case exceeded the yearly salary, but they are not new this year. Right now, the Republican/Business alliance is trying to manipulate the public. The new calculations are out to determine how much tax will be withheld from your pay check. The Treasury Secretary, Steve Mnuchin is telling the public not to trust your employer’s calculation and figure it yourself as you will be responsible for the taxes at the end of the year. Mnuchin says that 90% of the people will get a tax cut but that means that 10% is going to have to pay that $4 trillion tax increase. There are some pieces of the puzzle missing.
Rush Slimbaugh was going on and on about the Wal Mart bonuses today on his show. He was saying how much the employees will appreciate the tax cuts on those bonuses. The trouble is Rush got a big tax cut but those working at Wal Mart didn’t. The 10% tax bracket was not cut. Ninety percent of Wal Mart employees did not get a tax cut. Rush is either ignorant or he just can’t imagine that some people make less than $44,000 a year. In fact, in Huntington the average house hold income is less than $30,000. There is the increase in standard deduction but if you have a couple of children the loss of 4 personal exemptions $4,050 will completely wipe out any tax savings on the standard deduction. Several of the people residing in Huntington work at Wal Mart but they will pay the same amount of taxes on the bonuses this year or next. Rush is imagining that tax cut.
What is published about the Wal Mart bonuses is that they are $1,000 but only employees with over twenty years of service will get that amount. Wal Mart employees with less than two years will get only a $200 bonus only 54 cents a day. The $1,000 bonuses are only for career employees usually those in management. The bonuses are graduated in between those extremes with employees with 10-14 years of service getting a $400 bonus.
That was not what was bothering Slimbaugh was worried that blogosphere had seen through the attempt to pull the wool over the public eyes. Evidently many on the Internet were point out this was an attempt to deceive the public by making it look like the tax cuts were responsible for the bonuses instead of an attempt to justify the tax cuts. If Wal Mart had wanted to show that the tax cuts were responsible they would have granted bigger pay raises instead of bonuses, so they would go on instead of a one-time bonus. The only pay raises granted were for new employees most of which were being mandated by minimum wage laws anyway. Wal Mart should have put their money where their mouth is instead of a public relation trick to get their Republicans friends reelected because they gave them and their rich friends a $5.5 trillion tax cut.
Trump had no trouble touting a $5.5 trillion tax cut to the farmers but failed to mention the $4 trillion tax increase achieved by cutting out personal exemptions and eliminating popular middle-class tax deductions. We can all do the math even if Trump doesn’t want to brag about his $4 trillion in tax increases. The Republicans increased the deficit by the maximum they were allowed which was $1.5 trillion so the math would be $5.5 trillion - $1.5 trillion = $4 trillion in tax raises.
The Republican strategy seems to be to concentrate the tax cut in the hands of the richest 1% while spreading the tax increases out by eliminating deductions for diverse groups. Spreading out the $4 trillion increase is not likely to cause organized opposition because it will not affect everyone, and the groups affected are so diverse. The simplest way for the Republicans to raise the taxes $4 trillion would have been to double the lowest tax bracket to 20% which is what they would have liked to have done but there would have been a public outcry. The Republicans still made their $4 trillion in tax increases, but they are hidden in the elimination of tax deductions. If the Republicans had said they were going to raise the taxes on the middle class to give massive tax cuts to the richest 1%, the public would have been against it but that is exactly what they did.
One popular tax deduction allowed for the deduction of moving expense for job related moves. This deduction could be claimed by those who itemized taxes as well as those who didn’t. It has been eliminated except for those in the military. The beauty of eliminating this deduction is that it will only affect a small part of the population each year. It may be several years down the road before this exemption is needed. The tax cuts for the middle class are only temporary but the eliminations of deductions are no doubt permanent. The cuts for the businesses are permanent.
The other day I got an e-mail asking my opinion about the monetary system and whether it needs to exist. Our monetary system is currently in a state flux with some businesses no longer accepting cash. Electronic transfer will likely replace cash in the not too distant future but there will always need to be medium of exchange so that one man might exchange his labor for another man’s labor. In primitive cultures it was possible to trade one man’s goods for another but as society got more complex that had to change. Matter of fact the existence of money made our society more complex because in essence it allowed people to vote with their dollars as to what a society will produce. Communal farms have worked for small groups usually associated with a religious group but would never work for much larger groups.
The United States has created an aristocracy based on wealth which is the polar opposite of the communal farm. Both are extremes and we must strike a path somewhere in the middle. The belief that if the rich have all the wealth of a country they will be benevolent father figures who will take care of the “little people” belies the principal that self-interest is a primary determining factor. There is equation that predicts the end of any society. There will be a violent revolution in any society where the richest 5% has managed to get control of 99% of the wealth. The United States has cut the taxes for the ungodly greedy four times in the last thirty years pushing America a long way toward that goal. Money is power, and that money is being used by the rich to control our government. The more money the ungodly greedy get the more money the ungodly greedy use to control government and get even more money. History teaches us that the ungodly greedy never stop until after they have caused a revolution. During the French Revolution the rich were put on a spit and roasted over and open fire and fed to their wives. No matter how many times it happens the ungodly greedy can’t help themselves they do it again and again.
One has to wonder whether the Republicans will use the ploy that Trump used at his meeting with the Farmers stating that the actual cut in taxes for the rich was not $1.5 trillion but $5.5 trillion. If the Republicans running for office chose to follow this strategy there is no way that they can avoid telling the public that they raised the taxes on the middle-class by $4 trillion by eliminating personal exemptions and other deductions. If Trump has held anymore public meetings to crow about how big his tax cut is I doubt that he continues to use that $5.5 trillion figure. The downside of the argument is far more damaging than the upside of using figures that are so big that most of the public can’t grasp anyway.
The Republican tax scam allows the government to continuing use the 2017 tables for tax deductions. The old tables used for tax deductions were based on the number of personal deductions claimed on the W-4 forms. Since all the personal exemptions were eliminated under the tax scam no one has a clue as to how to come up with a working deduction table. One thing sure is there will be some horrendous mistakes made and they will not show up until 2019.
If you wanted to make this country far worse than what it is how would you go about it? I would make the cost of ignorance tax deductible and that is exactly what the Republicans did. Taxpayers are allowed to take $10,000 a year tax free to pay for K-12 education in private or religious schools. Religious schools teach children today the equivalent of teaching the earth is flat in the 17th century. The Republicans did away with a lot of deductions to create a tax deduction for ignorance.
In answer to an-email about the Federal Reserve, it was extremely controversial at the time it was created and remains somewhat today. Many people think that the Federal Reserve is a department of the Federal government because it can literally create money when in fact it is an organization of powerful private banks. The Federal Reserve can decide how much money should be in circulation and either take some out circulation or put more money in circulation. The more money in circulation drives the value of money down while lowering the money supply tends to make the value increase. The power the Federal government retained is appointing the head of the Federal Reserve. This does give a lot of power to private banks who stand to profit from the rulings of the Federal Reserve. One of the most important powers of the Federal Reserve is to set the interest rates that banks charge each other for loans.
I don’t know that I would call it a scam, but it is open to abuses. The fact that the Federal government abdicated parts of its power to the to Federal Reserve may in the end have been a bad thing on the other hand giving politicians the power to set interest rates would create a different set of problems. A sitting president would always want to see low interest rates to spur the economy under his watch but would be very reluctant to raise interest rates when inflation got out of hand. No system is perfect and there are several ways to accomplish the same goals.
I have been reading “Fire and Fury” and the most interesting antidote I found so far was how Trump treated his friends. Trump was always trying to screw his friends but especially their wives. Trump had come with an ingenious way of doing just that. Trump would call a male friend into his office and strike up a conversation about his friend’s sexual exploits with a girl friend or professional ladies of the night but unbeknown to his friend Trump had called the man’s wife before he came into Trump’s office and she was listening over the speaker phone. Of course, Trump was hoping for a revenge f*** and maybe he got a few but what I am wondering is why somebody didn’t kill him. In Trump circle of friends, a divorce was a million-dollar problem. That is one of the lowest most despicable things I have ever heard of, but it more than accurately describes Trump’s character or lack thereof.
It looks like Trump did not get his Christmas present this year after all. His attorney, Ty Cobb, had promised trump that Russian collusion probe would be over but now according to recent court filings it looks like Mueller is in it for the long term. Neither George Papadopoulos nor Flynn have been sentenced and it looks like there is no hurry to sentence them. This is important because once the Feds sentences them they will no longer have any leverage over Flynn and Papadopoulos. Flynn has an update set for Feb 1 in Federal court but there is nothing set for Papadopoulos.
Bannon was called before the House Intelligence Committee about Trump Jr meeting with the Russians a meeting that Bannon has called treasonous in the new book “Fire and Fury.” Bannon has not denied that he did in fact say that. It looks like Bannon will be questioned by Mueller also. Bannon tried to assert executive privilege on questions before Trump was president. Bannon is the ultimate insider and I doubt there is anything significant that Bannon doesn’t know. I recently finished a book called “The Devil’s Bargain” that detailed Bannon’s life. I have never seen so many switch backs in a man’s life. Bannon joined the navy with hopes of saving the world only to become disillusioned because the all-volunteer military. Bannon spent seven years as a naval officer only to go back to school and become a Goldman-Sacks banker. Then Bannon goes to Hollywood and starts making documentary movies with the hopes of helping Sarah Palin run for president. Then a stint in Japan running a video company that sold achievement rewards for World Warcraft. This gave Bannon a connection to a large group of online gamers whose concept of reality was a good deal different then the mainstream.
There is a psychological principal that people tend to be consistent. Bannon was in the navy in the late 70s and 80s when the Soviet Union was the ultimate enemy. This is why Bannon would see Donald Jr meeting with the Russian as treasonous. If Bannon is consistent he will expose anyone in the Trump administration that is working with the Russians. Trump has destroyed Bannon over calling his son’s actions treasonous he has nothing left to lose. In the end Bannon will be consistent with his navy ideals and let the chips fall where they may.