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Economics Discuss New GOP tax cuts would add $3.8 trillion to deficit, says report at the Political Forums; Don't worry, THIS time it'll super-stimulate the economy and magically shrink the deficit, and all the companies will immediately come ...

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Old 09-13-2018, 08:21 PM
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Default New GOP tax cuts would add $3.8 trillion to deficit, says report

Don't worry, THIS time it'll super-stimulate the economy and magically shrink the deficit, and all the companies will immediately come back and make stuff here.



Republicans are horrendously bad when it comes to the federal budget.

Quote:
A second round of GOP tax cuts would add $3.8 trillion to the federal deficit over the next two decades, according to a report released this week by the Urban-Brookings Tax Policy Center.

A bill that the House Ways and Means Committee approved Thursday, "Protecting Family and Small Business Tax Cuts Act of 2018," would reduce federal revenue by $631 billion from FY 2019-28 and an additional $3.15 trillion between FY 2029-38, the group estimated.

The bill, released by Rep. Kevin Brady (R-Texas), chairman of the House Ways and Means Committee, would extend individual income and estate tax provisions in the 2017 Republican tax bill, the Tax Cut and Jobs Act.

The report from the Tax Policy Center, which is led by a former tax official from the Obama administration, states that about two-thirds of taxpayers would get a tax cut, while about 9 percent would get a tax hike from the bill. Higher-income households, it says, on average would receive larger average tax cuts as a percentage of after-tax income.

The provisions in the 2017 tax law are not set to expire until 2025 regardless, which explains the lower estimate for revenue lost in the first 10-year period.

While Republicans have argued the new tax bill would boost the economy, the report estimates its effects would be minimal. It estimates the bill would increase gross domestic product by about 0.5 percent in 2026, 0.4 percent in 2028 and 0.1 percent in 2038.

By imposing lower tax rates on labor and capital income, the bill would increase incentives for working and saving, the Tax Policy Center found. This feedback loop would increase revenue by a cumulative $71 billion over the first decade analyzed and $157 billion over the second.

The Joint Committee on Taxation also estimates $631 billion in revenue would be lost under the bill in the next decade, but has not made predictions past then.

In addition to approving legislation on Thursday to make the 2017 tax law's individual cuts permanent, the Ways and Means committee also advanced measures focused on incentivizing savings and encouraging business innovation.

The University of Pennsylvania's Penn Wharton Budget Model on Thursday released an analysis that found that, together, the three bills would lose $614 billion in revenue over the next 10 years and would reduce revenue by about $3.8 billion by 2040.

The group estimates that by 2040, the package would reduce gross domestic product by between 0.6 percent and 0.9 percent. It argued that the economic benefits of the tax changes are outweighed by the negative effects of additional debt.


http://thehill.com/policy/finance/do...s-would-add-38
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Old 09-13-2018, 10:51 PM
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Default Re: New GOP tax cuts would add $3.8 trillion to deficit, says report

*sigh*...

ONCE AGAIN, increased longterm revenue is not factored in, making this a glaring lie of omission...

The ADDITIONAL trillions into the economy will create a larger pool of income for the government as time goes by...

From a previous post...

Quote:
Originally Posted by cnredd View Post
Economics 101 says that the tax cuts will hit early, but once the markets start using those tax cuts to reinvest, the returns will be greater a year or two from now..

If you buy a dump truck in 2018 for $80,000, and that truck creates $50,000 worth of added revenue in 2018, you'll see a $30,000 loss off the bat...

...but that same truck creates $50,000 worth of added revenue in 2019, too...The truck is now paid off and you're $20,000 ahead...

...and then that same truck creates $50,000 worth of added revenue in 2020...Now you're the full $50,000 ahead...

$30,000 loss...$20,000 ahead...$50,000 ahead...

That's how it works...
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Old 09-14-2018, 12:00 AM
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Default Re: New GOP tax cuts would add $3.8 trillion to deficit, says report

Additional revenues generated through the tax cuts were already factored in, unfortunately they do not offset the losses.

Quote:
While Republicans have argued the new tax bill would boost the economy, the report estimates its effects would be minimal. It estimates the bill would increase gross domestic product by about 0.5 percent in 2026, 0.4 percent in 2028 and 0.1 percent in 2038.

By imposing lower tax rates on labor and capital income, the bill would increase incentives for working and saving, the Tax Policy Center found. This feedback loop would increase revenue by a cumulative $71 billion over the first decade analyzed and $157 billion over the second.
This does not make up for the $3.8 trillion loss over the next two decades, not by a long shot.

Quote:
Originally Posted by cnredd View Post
Duh...

Economics 101 says that the tax cuts will hit early, but once the markets start using those tax cuts to reinvest, the returns will be greater a year or two from now..

If you buy a dump truck in 2018 for $80,000, and that truck creates $50,000 worth of added revenue in 2018, you'll see a $30,000 loss off the bat...

...but that same truck creates $50,000 worth of added revenue in 2019, too...The truck is now paid off and you're $20,000 ahead...

...and then that same truck creates $50,000 worth of added revenue in 2020...Now you're the full $50,000 ahead...

$30,000 loss...$20,000 ahead...$50,000 ahead...

That's how it works...
This is presuming the dump truck will generate revenues so great it'll quickly both pay off the debt incurred by the investment and bring in profits. Unfortunately in part due to the first round of tax cuts making revenue growth take a hit, it already looks like we'll be back to $1 trillion deficits either this year or next year. These tax cuts will need to work at lot of wizardry in the future in order for it to be worth it.

Also this wasn't necessary at all.

The economy didn't need some extra gamble on a dump truck. Before the first round of tax cuts we were already experiencing steady growth, a bullish stock market, unemployment and underemployment in decline, and a booming job market with the longest streak of monthly job growth EVER. There wasn't a need for a temporary stimulus through tax cuts.

I really hope we're not at these deficit levels when the next downturn starts, otherwise it's going to be painful.
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Old 09-14-2018, 12:41 AM
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Default Re: New GOP tax cuts would add $3.8 trillion to deficit, says report

Quote:
Originally Posted by WallyWager View Post
Additional revenues generated through the tax cuts were already factored in, unfortunately they do not offset the losses.



This does not make up for the $3.8 trillion loss over the next two decades, not by a long shot.



This is presuming the dump truck will generate revenues so great it'll quickly both pay off the debt incurred by the investment and bring in profits. Unfortunately in part due to the first round of tax cuts making revenue growth take a hit, it already looks like we'll be back to $1 trillion deficits either this year or next year. These tax cuts will need to work at lot of wizardry in the future in order for it to be worth it.

Also this wasn't necessary at all.

The economy didn't need some extra gamble on a dump truck. Before the first round of tax cuts we were already experiencing steady growth, a bullish stock market, unemployment and underemployment in decline, and a booming job market with the longest streak of monthly job growth EVER. There wasn't a need for a temporary stimulus through tax cuts.

I really hope we're not at these deficit levels when the next downturn starts, otherwise it's going to be painful.
As I stated yesterday, revenue STILL grew...1%, which is not a lot, but it didn't "take a hit"...That logic only works for those who believe it's the government's money to begin with and Trump is just "allowing" the public to get some of it BACK...
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Old 09-14-2018, 06:15 AM
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Default Re: New GOP tax cuts would add $3.8 trillion to deficit, says report

I see that Wally abandoned the other thread on this subject as he was proven wrong there. Now he is still arguing the same failed logic to say that going forward, the tax cuts will negatively affect the economy.

I'll post my response in this thread also:

Quote:
Supply-Side Economics: Democrats scoffed at Republicans who said the Trump tax cuts would at least partially pay for themselves through higher economic growth. But it looks like the GOP had it right all along, as revenues climb.

The latest monthly budget report from the nonpartisan Congressional Budget Office finds that revenues from federal income taxes were $76 billion higher in the first half of this year, compared with the first half of 2017. That's a 9% jump, even though the lower income tax withholding schedules went into effect in February.

The CBO says the gain "largely reflects increases in wages and salaries."

For the fiscal year as a whole — which started last October — all federal revenues are up by $31 billion. That's a 1.2% in increase over last year, the CBO says.

The Treasury Department, which issues a separate monthly report, says it expects federal revenues will continue to exceed last year's for the rest of the 2018 fiscal year.
More at the link
https://www.investors.com/politics/e...onomic-growth/

So tell us how increasing the amount of money collected by the Fed Gov't is contributing to the deficit.
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Old 09-14-2018, 11:43 AM
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Default Re: New GOP tax cuts would add $3.8 trillion to deficit, says report

The issue of taxes, revenue, deficits and debt is a difficult issue marred by Pols, Presidents and those who provide money for their elections. Budgets are plans, and plans need to be reviewed over the term of the budgets life.

[Until Trump showed up in the White House, I always advocated POTUS ought to be provided the line-item veto, as do many State Governors. I still believe it to be a good idea, but not until Trump leaves office. I doubt we will make a fourth mistake, Arnold in CA., Jesse in Minn., and Trump; all totally inexperienced in governance and all proof that the Peter Principle has merit]

But I digress.

Notwithstanding the politics of budgeting and the SC ruling on the line-item veto, a process needs to be established wherein the party or parties who establish a budget are held accountable by the voters.

The problems being the difficulty in something so massive as the Federal Budget, and the squabble for each Senator to get their share of the Pork for their State, and each member of the H. or Rep. do get pork for their district. And than their are the Governors, Mayors and lobbyists.

It's time to limit the cooks.

All of this leads to this question for the reader:

Q. Who, what and how do we establish a budget without the clutter of demands from so many; who gets to establish the priorities, and who gets the blue pen before the vote in Congress
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Old 09-14-2018, 12:04 PM
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Default Re: New GOP tax cuts would add $3.8 trillion to deficit, says report

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Originally Posted by Wry Catcher View Post
The issue of taxes, revenue, deficits and debt is a difficult issue marred by Pols, Presidents and those who provide money for their elections. Budgets are plans, and plans need to be reviewed over the term of the budgets life.

[Until Trump showed up in the White House, I always advocated POTUS ought to be provided the line-item veto, as do many State Governors. I still believe it to be a good idea, but not until Trump leaves office. I doubt we will make a fourth mistake, Arnold in CA., Jesse in Minn., and Trump; all totally inexperienced in governance and all proof that the Peter Principle has merit]
The line-item veto was already passed and signed into law, and THEN the Supreme Court ruled it unconstitutional...

Quote:
Presidents of the United States have repeatedly asked the Congress to give them a line-item veto power. According to Louis Fisher in The Politics of Shared Power, Ronald Reagan said to Congress in his 1986 State of the Union address, "Tonight I ask you to give me what forty-three governors have: Give me a line-item veto this year. Give me the authority to veto waste, and I'll take the responsibility, I'll make the cuts, I'll take the heat." Bill Clinton echoed the request in his State of the Union address in 1995. Congress attempted to grant this power to the president by the Line Item Veto Act of 1996 to control "pork barrel spending", but in 1998 the U.S. Supreme Court ruled the act to be unconstitutional in a 6-3 decision in Clinton v. City of New York. The court found that exercise of the line-item veto is tantamount to a unilateral amendment or repeal by the executive of only parts of statutes authorizing federal spending, and therefore violated the Presentment Clause of the United States Constitution. Thus a federal line-item veto, at least in this particular formulation, would only be possible through a constitutional amendment. Prior to that ruling, President Clinton applied the line-item veto to the federal budget 82 times
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Old 09-14-2018, 12:23 PM
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Default Re: New GOP tax cuts would add $3.8 trillion to deficit, says report

Quote:
Originally Posted by cnredd View Post
The line-item veto was already passed and signed into law, and THEN the Supreme Court ruled it unconstitutional...
That was clear in my post.

The question I posted should be considered as alternatives to how budgets are currently formed.

I'll venture an example, the 10th Amendment might be used to allow for a national Referendum for the People to provide a guideline (not compulsory) to those who will have input into a future budget.

It would be a form of direct democracy, though as stated not have the power of law. Using a web page will allow the people to express their concerns, algorithms can weed them down to less than a dozen (I guess), which could be used in debates among those seeking their nominations to elected federal office (President, V President, Senate & H of Rep)
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Old 09-14-2018, 12:33 PM
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Default Re: New GOP tax cuts would add $3.8 trillion to deficit, says report

Quote:
Originally Posted by Wry Catcher View Post
That was clear in my post.

The question I posted should be considered as alternatives to how budgets are currently formed.

I'll venture an example, the 10th Amendment might be used to allow for a national Referendum for the People to provide a guideline (not compulsory) to those who will have input into a future budget.

It would be a form of direct democracy, though as stated not have the power of law. Using a web page will allow the people to express their concerns, algorithms can weed them down to less than a dozen (I guess), which could be used in debates among those seeking their nominations to elected federal office (President, V President, Senate & H of Rep)
I've always believed in the "not compulsory"...

A president could put a red-line through certain parts of a bill and say "I will NOT sign this bill...If Congress goes back and passes a bill after removing what I've crossed out, I would sign THAT bill."...

The problem is that bills (usually) contain stuff that is deemed "sooooo important" that the president signs it anyway...with all of the stuff that should not be in there included...

Every president has done this before....Trump even did it earlier this year...

Trump signs $1.3 trillion spending bill into law despite being 'unhappy' about it
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Old 09-15-2018, 08:46 AM
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Default Re: New GOP tax cuts would add $3.8 trillion to deficit, says report

Quote:
Originally Posted by Wry Catcher View Post
That was clear in my post.

The question I posted should be considered as alternatives to how budgets are currently formed.

I'll venture an example, the 10th Amendment might be used to allow for a national Referendum for the People to provide a guideline (not compulsory) to those who will have input into a future budget.

It would be a form of direct democracy, though as stated not have the power of law. Using a web page will allow the people to express their concerns, algorithms can weed them down to less than a dozen (I guess), which could be used in debates among those seeking their nominations to elected federal office (President, V President, Senate & H of Rep)
The founders anticipated the dangers of direct democracy when they gave us a republic in the Constitution. Amending it to have Senators directly elected was a major step towards undermining the republic with the chaos of direct democracy. Taking the power of the purse away from Congress in favor of some overseer funneling down the candidates for appropriations would be another mistake.

Instead of a popularity contest for taxpayer dollars subject to secret algorithms like those deployed by Facebook and Google why not force Congress to practice basic fiscal responsibility with a balanced budget amendment? In one form or another it's a principle adopted by all states except socialist loving Vermont. Just like responsible families do Congress would have to make hard choices from competing interests. This way nobody has their right to petition government for redress of grievances subsumed by essentially a public opinion poll.
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