My analysis of Trump’s recently announced proposed tax cuts, as latest iteration of Neoliberal tax cut policy since 1981. How it will continue to redistribute income from wage earner households ($38,000-$91,000), to corporations, non-corporate businesses, investors, and 1% wealthiest households. How the neoliberal ‘tax cut shell game’ is played from Reagan to Trump.
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SHOW ANNOUNCEMENT
Dr. Rasmus dissects the Trump tax proposal of this past week, crafted by Goldman Sachs investment bankers, Steve Mnuchin (Treasury Secretary) and Gary Cohn (head of economic council). Rasmus explains how it is the latest in a long line of neoliberal tax proposals since 1981, which are designed to shift income to businesses, investors and wealthy households at the expense of wage earners. Once again wealthy investors, households, corporations and non-corporate businesses all gain at the expense of wage earners with annual incomes of $38 to $91,000. Rasmus explains how tax cuts are a foundation of neoliberal policy–along with defense-war spending hikes, social program cuts, and the ‘twin deficits’ solution to financing government debt. Tax cutting from Reagan to Obama to Trump are summarized. The major elements of corporate and non-corporate business income that will benefit from the Trump plan are summarized, including benefits that will accrue to the wealthiest households and businesses as a result of the elimination of estate and AMT taxes, retention of carried interest and preferential capital gains, new cuts in top end corporate and personal nominal tax rates, Trump’s proposal to end the territorial taxation, to allow multinational corps to repatriation $2.6 trillion at special rates, big cuts in business income pass through, etc . (Next week: Financial Asset Bubbles Again Growing—What Could Happen).
I suggest that the Trump “Plan”, as described, is inane, at best, and will not pass.
I, strongly, offer the following:
EQUITABLE TAX RECONFIGURATION-PLUS
Would create >4% GDP growth and 4-6 million jobs per year:
Congress and the Administration are contemplating tax changes. Sadly, it appears that both may be led by ignorance, bias, and axes to grind which is a losing formula for We, the People.
There should be a discussion regarding the concepts of evolutionary versus revolutionary changes. There is substantially greater risk of problematic and unintended consequences
when employing revolutionary changes.
It is being promoted by “talking heads” and politicians that a reduction of the corporate tax rate from 35% to 20% would create jobs. The jobs created would be insignificant, thus that promotion is nonsense, at best. Yes, it would offer greater profits for corporations, which would benefit stockholders. That would reflect very limited economic benefits, which would be further reduced by the hit to our national debt.
The main catalyst to enable businesses to increase sales and profits is energized consumers.
What effect upon consumers would a permanent income tax credit equal to 100% of the Social Security taxes paid on the first $40,000 of income? The maximum credit would be $2,480 per year ($206.67 per month).
The effect upon consumers would be substantial, thus benefiting business sales and profits, i.e., the old “two birds with one stone”.
The funding of this tax credit would come from the elimination of the “ceiling” upon which Social Security taxes are levied and by making all other types of income subject to SS tax, without limitations.
An additional “adjustment” to Social Security should be a ten percent increase to SS recipients.
Since our economics would be greatly stimulated, a different method of controlling the pace of the economy would be initiated. A separate withholding would be established and would be controlled by the Federal Reserve Board. The Fed, on a monthly basis, would publish a factor (a % of gross pay) which would cause a reduction or increase in net pay, thus affecting the strength of our economics, immediately.
Interest rates would be market based, i.e., the Fed would not control rates via Discount and Federal Funds rates.
PLUS:
1. Eliminate the anti-trust exemption for unions – http://writerbeat.com/articles/7399-TRADE-AND-SERVICE-UNIONS
2. Reverse all minimum wage laws – http://writerbeat.com/articles/11328-THE-CONCEPT-OF-ldquo-MINIMUM-WAGE-rdquo-IS-A-CANCER-TO-OUR-NATION-S-ECONOMICS-SINCE-IT-TENDS-TO-CREATE-A-PERMANENT-UNDERCLASS-AND-
mz
mikiesmoky@aol.com
04/21/17