Trump

Trump’s Tax Plan Is Aimed At the 2018 and 2020 Elections, Not U.S. Competitiveness

President Trump wants to cut the tax rate for all American businesses to 15 percent, and damn the deficit. If you believe him, any damage from higher deficits will be minor compared to the benefits for US competitiveness, economic efficiency, and tax fairness. The truth is, those claims are nonsense; and the real agenda here is the 2018 and 2020 elections. Without substantial new stimulus, the GOP will likely face voters in 2018 with a very weak economy – and tax cuts, especially for business, are the only form of stimulus most Republicans will tolerate. Moreover, if everything falls into place, just right, deep tax cuts for businesses could spur enough additional capital spending to help Trump survive the 2020 election.

Let’s review the economic case for major tax relief for American companies. It’s undeniable that the current corporate tax is inefficient – but does it actually make U.S. businesses less competitive? The truth is, there’s no evidence of any such effects. In fact, the post-tax returns on business investments are higher in the United States than in any advanced country except Australia, and the productivity of businesses is also higher here than in any advanced country except Norway and Luxembourg.

The critics are right that the 35 percent marginal tax rate on corporate profits is higher than in most countries. But as the data on comparative post-tax returns suggest, that marginal tax rate has less impact on investment and jobs than the “effective tax rate,” which is the actual percentage of net profits that businesses pay. On that score, the GAO reports that U.S. businesses pay an average effective tax rate of just 14 percent, which tells us that U.S. businesses get to use special provisions that protect 60 percent of their profits from tax (14 percent = 40 percent of 35 percent).

Tax experts are certainly correct that a corporate tax plan that closed special provisions and used the additional revenues to lower the 35 percent tax rate would make the overall economy a little more efficient. But lowering the rate alone while leaving most of those provisions in place would have almost no impact on the economy’s efficiency – and the political point of Trump’s plan depends on not paying to lower the tax rate.

Finally, would a 15 percent tax rate on hundreds of billions of dollars in business profits help most Americans, as the White House insists, since 52 percent of us own stock in U.S. corporations directly or through mutual funds? The data show that most shareholders would gain very little, because with 91 percent of all U.S. stock held by the top 10 percent, most shareholders own very little stock.

Moreover, the proposed 15 percent tax rate would cover not only public corporations but also all privately-held businesses whose profits are currently taxed at the personal tax rate of their owners. So, Trump’s plan would slash taxes not only for public corporations from Goldman Sachs to McDonald’s, but also for every partnership of doctors or lawyers, every hedge fund and private equity fund, and every huge family business from Koch Industries and Bechtel, to the Trump Organization.

There is no doubt that the President’s tax plan would provide enormous windfalls for the richest people in the country. Beyond that, it may or may not sustain growth through the next two elections, since even the best conservative economists commonly overstate the benefits of cutting tax rates. But the truth is, there aren’t many other options that a Republican Congress would accept.

This post was originally published on Dr. Shapiro's blog.

 

Column: Dems should put Russia, corruption and tax returns on agenda w/Trump

Today, US News and World Report published Simon's latest column,“Standing Firm.” In the column Simon recommends that in the coming negotiations with President Trump on a wide variety of issues – including the budget, debt ceiling, infrastructure, improving the Affordable Care Act and even matters of war and peace – Democrats should add three more important issues to the agenda:

1. Full presidential cooperation with the various probes into Russian interference in U.S. politics.
2. Commonplace financial transparency - release of tax returns, public audit of Trump's holdings.
3. Cessation of presidential use of his private businesses for matters of state.

To continue reading, please refer to the US News link. You can Simon's previous US News columns here.

Column: The RNC’s Russia Problem

Friends,

Today US News published Simon's latest column,“The RNC's Russia Problem: The RNC Should Take The Lead In Preventing Future Interference In Our Elections.”

An excerpt –

"The main purpose of the two congressional investigations into the Russian campaign to interfere in America's electoral process is to prevent such a campaign from ever happening again. There are legitimate reasons to be concerned about future reoccurrences. Just today, Facebook closed 30,000 accounts in France, ones it determined were spreading misinformation in the run up to the French election. So these malevolent efforts by foreign governments to interfere in the democratic processes of important Western powers continue and remain a serious threat to sovereignty and security of the United States.

As policymakers forge an appropriate response to this ongoing threat, the Republican National Committee has a particularly important role to play in future efforts to protect this part of America's homeland. For as we've learned in recent weeks, the RNC was at the center of two of the most important components of the Russian campaign – the penetration of Trump's campaign by the Russian government, and the normalization and use of Russian disinformation."

To continue reading, please refer to the US News link. You can Simon's previous US News columns here.

Be sure to also read Simon's statement on Secretary of State Tillerson's meetings with Putin and Lavrov as well as his statement on the White House and Department of Homeland Security to release their plan to protect US elections from future interference by foreign powers.

Simon's New Weekly Column in US News and World Report

Simon is writing a weekly guest column for US News & World Report. You can find previous versions here and below. (Updated Friday 10/6/17)

US News & World Report Columns

Make ACA Sign-Ups an Annual Civic Ritual, US News & World Report, 10/6/17. Simon makes the case that our nation's elected officials and other responsible community leaders should make signing people up for health insurance an annual event, helping blunt Trump's malevolent cuts in marketing the ACA. 

Stand Firm: Democrats should ask for 3 major things in their coming negotiations with Trump, US News & World Report, 4/20/17. Democrats should put Russia, corruption and tax returns on agenda with Trump. 

The RNC's Russia Problem: The RNC Should Take The Lead In Preventing Future Inference In Our Election Campaigns, US News & World Report, 4/14/17. The RNC helped Russia interfere in our elections. It should now take the lead in making sure it never happens again.

The Age of Innocence: Trump's Fantasy World Crashes Hard Into The Real One, Simon Rosenberg, US News & World report, 4/7/17. Simon argues that Trump's Syria contortions are an example of his fantasy world crashing hard into the real one.

5 Ways Trump Could Stop Obama's Expansion, Simon Rosenberg, US News & World Report, 3/23/17. Simon warns that Trump’s economic policies are more likely than not to derail the long Obama expansion.

Why the Return of WikiLeaks Is a Problem for Trump, Simon Rosenberg, US News & World Report, 3/9/17. The return of Wikileaks this week is a reminder that the Russian campaign against the US is ongoing, not something that happened last summer.  Investigations looking into Russia must take this into account. 

The 'Shackles' Are Off, Simon Rosenberg, US News & World Report, 3/3/17. Simon considers the dangers of Trump's new immigration policies for all Americans not just immigrants.

Steve Bannon, Meet Russell Pearce, US News & World report, 2/21/17. Simon examines how the blowback to Trump's immigration plan could be significant and cause lasting damage to his Presidency.

Has Trump Already Abandoned the Fight Against the Islamic State?, US News & World Report, 2/7/17. In his recent column, Simon wonders if Trump undestands how much his own actions are undermining the fight against IS.

Drawing the Line with Trump, US News & World Report, 1/31/17. In his column, Simon argues that Democrats need to abandon traditional responses to the Trump Presidency, and set new rules of engagement.

The End of Pax Americana?, US News & World Report, 1/26/17. In his column, Simon argues that Trump is signaling a retreat to the very kind of politics – nationalism, protectionism, racism and xenophobia – that brought about actual carnage in much of the world in the 1930s and 1940s.

Chin Up, Democrats, US News & World Report, 1/20/17. In his column, Simon argues that Democrats should have pride in their historic accomplishments and optimism about the future of their politics.

An Independent Audit of Trump's Companies Is Now Necessary, US News & World Report, 1/12/17. In his column, Simon argues that Trump's plan to keep all of his holdings establishes new far weaker norms, encourages public corruption, creates many new terror targets, and exposes the US to exploitation by foreign governments.

The Pernicious Politics of Oil - On Trump's embrace of petro-politics, US News & World Report, 12/16/16. In his column, Simon does a deep dive on why Trump 's embrace of plutocratic petro-politics should be worrisome to liberals everywhere.

Rediscovering the Democrats' North Star, US News & World Report, 12/9/16. In his column, Simon offers some thoughts on the path forward.

Trouble Ahead - 4 Scandals That Could Alter the Trump Presidency, US News & World Report, 12/1/16. In this column, Simon looks at four looming scandals that could alter the trajectory of the Trump Presidency - unprecedented levels of public corruption, collusion with Russia to alter the outcome of the election, the FBI's late intervention and Melania's immigration troubles.

The West Is On The Ballot, Simon Rosenberg, US News & World Report, 11/4/16. In the column Simon argues that Trump isn't running just against Clinton, he's also running against what America has become and the world it has built.

The GOP Should Be Worried About Texas, Simon Rosenberg, US News & World Report, 10/27/16. Demographic trends show the state is on the precipice of going from red to blue.

Why Democrats Dominate, Simon Rosenberg, US News & World Report, 10/20/16. Perhaps the most important political story of the past generation is transformation of Democratic Party into a successful governing party with popular leaders well regarded by the American people.

Calling all Patriots, Simon Rosenberg, US News & World Report, 10/13/16. While in a reflective mood about the future, their nominee and party, Simon suggests two other activities Republicans should swiftly denounce and distance themselves from.

How America Prospers in a Global Age, Simon Rosenberg, US News & World Report, 10/6/16. In this op-ed Simon make the case that America has prospered in this new age of globalization, but only with the right policies.

NDN Calls on WH/DHS To Release Their Plans for Protecting US Elections from Foreign Interference

Today, the advocacy organization NDN is formally calling on the Trump Administration to release its plans for preventing another Russia style attack on our electoral systems in the 2018 election cycle.

Russia’s interference in our elections in 2016 was among the most serious attacks on the homeland of the United States in recent decades, perhaps in all of American history. The success of the operation will certainly encourage Russia, and perhaps other foreign actors, to try again. Foreign actors will be further encouraged if the American President and his Administration continue to discount the threat, and are not doing all that is required to keep America and its electoral system safe. To deter such activity, and to hopefully to prevent its reoccurrence, the Administration must take steps in the coming days to assure the American people they have a plan and are acting upon it.

This is not some far off issue. Special elections for the House of Representatives have begun this month, and there are primary and general elections in several states in 2017 that are already underway. Systems for monitoring foreign activity and creating real time communication with the DNC, RNC and possibly affected campaigns should have already been put in place by the Trump Administration. It is time for the President to act.

Congressional leaders of both parties should be demanding a clear plan from the Administration. The Chairs of the DNC and RNC should work together this time to create systems for monitoring and sharing information. And this time, the Republican Party should commit to the American people that it will not knowingly use stolen materials and disinformation spread by a foreign power to influence an American election, as it did in 2016. This is not a partisan issue, but an American one, and it is time for the Trump Administration to lead an ambitious, bi-partisan, well-staffed and well-funded effort to prevent foreign interference in our elections.

We hope others will join our call, and encourage the Administration to act without delay.

Trump's Great Betrayal

A new statement from NDN’s Simon Rosenberg:

“Candidate Donald Trump promised every day Americans his Administration would fight for them. Two months into his Presidency it is clear he has no intention of following through on his promise. These early months of the Trump Presidency could become known as “The Great Betrayal.”

Fair? Let’s take three simple examples:

Health Care – Candidate Trump promised health reform that would cover everybody, lower costs and not cut programs like Medicare and Medicaid. The House GOP health care bill he has endorsed and promoted would dramatically increase the number of uninsured (25m, 7% of US population); would increase costs for everybody, particularly for older people; and would savagely cut Medicaid. His plan would make tens of millions of those people he pledged to fight for sicker and poorer, while giving hundreds of billions of new tax cuts to wealthy people like those he hangs out each weekend at Mar-a-Lago.

Few proposals in American history could do as much harm to working people as the health care plan championed by Donald Trump these past few weeks. It is literally the opposite of what he promised he would do.

His Budget – The partial budget document Trump released last week would make massive cuts in education and job training, transportation and infrastructure, simple environmental protections and many other programs critical for working people to live good and decent lives. Whether working people would get a tax break for all of this is unclear as he hasn’t released a complete budget. But if his budget follows the strategy of his health care plan expect the benefits to flow to those already wealthy with little left for those struggling to get by.

His Staff – Despite his campaign rhetoric, the Trump Administration led by the wealthiest collection of Americans to every lead an American Administration in the modern era of American politics, and perhaps ever. It is full of Wall Streeters, including 5 former executives of Goldman Sachs. Working class champions are as hard to find in the early Trump Administration as those immigration documents of Melania’s he promised back in August.

Based on what he has done in his first months in the White House, it is now clear that Donald Trump lied to the American people about his intentions as President. Rather than championing the working man, Donald Trump has backed proposals that would transfer hundreds of billions of dollars from every day Americans to those already wealthy and well off. It is an astonishing and historic betrayal of the people he promised to serve, leaving tens of millions sicker and poorer and even more with reduced life opportunities. Donald Trump hasn’t shown respect to those he pledged to fight for, he has shown them hostility and contempt. He is far more venal Robber Baron than virtuous populist, far more Calvin Coolidge than Andrew Jackson, far more an oligarch than a man of the people.

I am positing for others to debate that no President in American history as veered as far from the core promises and message of his campaign as Trump has in his first few months. It is Trumpian in its scale, something that I hope becomes known as “The Great Betrayal.”

Column: 5 Ways Trump Could Stop Obama's Expansion

In his new US News column,“5 Ways Trump Could Stop Obama's Expansion,” Simon warns that Trump’s economic policies are more likely than not to derail the long Obama expansion.

According to Simon, there are 5 steps Trump is taking that are likely to weaken growth and hasten a recession:

• Labor market disruptions
• Loss of tourism
• Making America sicker and poorer
• The weakening of the global trade system
• A reckless budget

An excerpt from "5 Ways Trump Could Stop Obama's Expansion" –

"If the president's plans provide huge tax benefits to those already well off – as Bush's did – and create massive deficits, the net result will harm the U.S. economy and the nation's fiscal integrity. The hugely regressive nature of the Trump-Ryan health care bill is a sign of where the GOP is going, and it should worry everyone concerned about a strong, healthy American economy.

So, growth or recession? If the president just kept current economic policies in place, the U.S. would probably be headed for a few more years of growth, possibly even strong growth. But the president isn't keeping those policies in place, and I worry that what he is trying to do will in aggregate threaten our economy more than help it grow.

Our president has made a good living catering to wealthy Americans and foreigners. While that strategy may have worked as a private business, the American people and their economy can prosper only if the tide is lifting all boats, not just those docked at Mar-a-Lago. And that just isn't where America is headed now. So count me as worried about our economic prospects, and the ability of Trump to sustain a long and durable expansion left for him by his predecessor."

To continue reading, please refer to the US News link. You can Simon's previous US News columns here.

For more of NDN's work on the Democrats and Republicans' stewardship of the US economy, please review our memo, "In A New Global Age, Democrats Have Been Far Better for the US Economy, Deficits, and Incomes."

"The President Didn't Release A Budget Today" - Statement from Simon Rosenberg

“The President did not release a budget today. Budgets have income and expenditures, surpluses and deficits. This document had none of that. It only detailed the expenditure side of a small portion of the overall budget, which we will apparently not see for another two months. That it has taken the Trump Administration so long to come up with this partial proposal, and is so far behind in producing the traditional document we use to run our nation, should be a concern for all Americans. Being months late on budget blueprints and attacking the government’s system for tracking the economic impact of budgets and legislation (the CBO) is not something global markets and investors traditionally reward.

One reason it is taking so long for this White House to produce a budget is that it is almost certainly proving impossible to translate the President’s promises into a budget that will pass a fiscal laugh test. President Trump has promised to radically reduce revenue to the federal government, while significantly increasing DOD, DHS and VA spending and not touching Medicare, Medicaid and Social Security. Even with the draconian cuts in domestic programs the Administration offered today it is reasonable to assume that the Administration’s budget, if we are to ever see it, will propose historic increases in the federal deficit and no proven strategy for growth. The last Republican President also significantly reduced revenue and increased defense spending. It brought us a Great Recession, income decline and a ten-fold increase in the annual deficit. Why this strategy will work for President Trump when it didn’t work for President Bush is something that needs some discussion in the days ahead.

Finally, it should be noted that over the last generation of American politics it has been Democrats who have presided over job growth, rising incomes, lower annual deficits and soaring stock markets. During this time two consecutive Republican Presidents brought us recessions, income decline and higher annual deficits. When it comes to the strategy for how to make economies grow and lower deficits the public should be looking to the Democrats and not to the Party of Trump.”

- Simon Rosenberg, President, NDN

For more on the performance of the two parties since the end of the Cold War see this recent memo from NDN.

Column: Why the Return of WikiLeaks Is a Problem for Trump

In his new US News column,“Why the Return of WikiLeaks Is a Problem for Trump,” Simon argues that the new WikiLeaks release reminds us the campaign Russia is waging against the West and the US is an ongoing effort, not something that happened in the past.

An excerpt from "Why the Return of WikiLeaks Is a Problem for Trump" 

"The new Wikileaks release of sensitive CIA documents about its cyber capabilities is many things, but perhaps most importantly it is a reminder that the campaign Russia is waging against the West and the United States is an ongoing effort, not something that happened in the past.

Not only does this new release involve Wikileaks, the main outlet for Russia's stolen materials from the Clinton campaign and the DNC, but a big part of the new dump provides previously undisclosed information about the CIA's Center for Cyber Intelligence, the unit assigned by President Obama to respond to Russia's interference in our politics last summer.

In a normal time, Russia's re-emergence would be considered the greatest security threat to America and our traditional allies. But the Trump administration has been remarkably silent on the issue. Despite tweeting on issues ranging from the ratings of his old television show to Ivanka's businesses, the new president has not once gone to Twitter to condemn any of these Russian aggressions. Nor has he even acknowledged that Russia intervened in our politics last year (let alone condemned it) or authorized a collective response to its ongoing efforts to disrupt the politics of our most important allies in Europe.

Consider that not only has Russia taken unprecedented aggression in the homeland of the United States, but it is, right now, waging similar cyber/disinformation campaigns inside of many of our most important European allies. It has escalated its activities in Eastern Ukraine. It has broken a 30-year-old nuclear treaty with the United States, deploying new offensive nuclear capacity that threatens Europe. It has propped up the Assad regime in Syria, helping prolong the civil war there and keeping the destabilizing flow of refugees into Europe. And it is even expanding its activities in places like Afghanistan and Libya."

To continue reading, please refer to the US News link. You can Simon's previous US News columns here.
 

Memo: In A New Global Age, Democrats Have Been Far Better for the US Economy, Deficits and Incomes (Updated)

Overview – With the debate in Washington soon to turn to budget and economic matters, we have updated and are releasing a memo we first produced in 2016. This short memo looks at the economic performance of the two American political parties when in the White House since the end of the Cold War.

We use 1989 as a starting point for comparison because when it comes to the American and global economies, the collapse of Communism and the non-aligned movement ushered in a new, truly global economic era, one very different from the one that came before. It is thus fair to see how the two parties have adapted to the enormous changes this new era has offered, and whether their policies have helped America prosper or struggle as we and the world changed.

As you will see from the following analysis, the contrast between the performance of the Democrats and Republicans in this new economic era is stark: 2 GOP Presidencies brought recessions, job loss, higher annual deficits, and struggle for workers; the 2 Democratic Presidencies brought recovery and growth, job and income gains, and lower annual deficits.

Based on these findings it is fair to assert that over the past generation the Democratic Party has been far more effective at crafting effective responses to a new economic era than the Republican Party. This case is bolstered, of course, when recalling the GOP’s spirited predictions of economic calamity when opposing both the 1993 Clinton economic plan and budget and the 2009/2010 Obama stimulus and “job-killing” Affordable Care Act. The Republicans have gotten it wrong now in four consecutive Presidencies.

While it will not be the subject of this short memo, our findings raise questions about whether the characterizations of the US economy as one not producing income and wage gains either over 40 years or over the past 15 years are accurate. It would appear that a more accurate description of the US economy in recent years is that with smart policies, Americans can prosper even in a more challenging and competitive global age.

We hope that commentators and policy makers keep the findings of this memo in mind as the Republicans roll out their budget and economic plans in the coming weeks. The Party’s track record on economic matters in this new age of globalization is not something that should inspire confidence in voters looking for plans that create jobs, raise wages and lower the annual deficit. It has been the other Party that has done that.

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