The Republican Tax Cuts Were a Political Failure. What Does That Mean for a Party That Agrees on Little Else? The GOP needs a new theory of government.

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When Republicans passed the Tax Cuts and Jobs Act in December of last year, they expected it to be the centerpiece of their midterm campaign. “This was a promise made. This is a promise kept,” Speaker of the House Paul Ryan said at a news conference celebrating the bill’s passage. “If we can’t sell this to the American people, we ought to go into another line of work,” said Senate Majority Leader Mitch McConnell. Judging by last week’s midterm results, Republicans may need to update their résumés.

The tax law permanently cut corporate tax rates and reduced individual income taxes through the middle of the next decade while increasing the deficit by more than $1 trillion. Republicans initially talked it up, tying it to a wave of corporate bonuses for workers. But the party quickly abandoned that argument in congressional races across the country. Polls found support dwindling, even among Republicans, while the already strong opposition increased among Democrats. A Gallup survey found that a majority of Americans said they saw no increase in their take-home pay.

On election day, voters confirmed their feelings. Not only did they hand control of the House to Democrats, many of whom had run against the law, but exit polls conducted by NBC News showed that 45 percent of voters said the tax law had no impact at all on their household finances, while 22 percent said they had been hurt by it. Just 28 percent said it helped.

There are reasons for these feelings: Although the tax cuts have provided a boost to the economy, they have performed more like a short-term, deficit-financed stimulus than a permanent reorientation toward economic growth and higher wages. Republican claims that the law would prove deficit neutral have not come true. And while it is possible to defend most of the individual components of the tax bill—even Obama administration economists argued for a somewhat lower corporate tax rate—it is more difficult to defend soaring deficits, or the decision to treat individual rate cuts as temporary in order to game congressional budget scoring rules.

Yet even if you believe the law on balance was good, or at least good enough, policy, it’s hard to avoid the conclusion that it was an abject failure as a political gambit—that it failed to connect with a majority of Americans. This presents something of a problem for a party that is united by few other issues and has focused on tax cuts to the exclusion of the rest of a domestic policy agenda. What does the party of tax cuts do when tax cuts no longer sell?

For the moment, at least, the answer turns out to be: Push for more tax cuts.

Even as polling shows that voters were largely indifferent to last year’s tax bill, Republicans have touted dubious follow-ups. House Republicans passed a second round of tax reductions that made the law’s individual rate cuts permanent. As expected, the Senate ignored the bill, but if it passed, it would have increased the original law’s already considerable impact on the deficit. President Donald Trump spent the weeks before the election advertising a new middle-class tax cut that was no more real than the fake Trump steaks he touted on the campaign trail. The Republican Party became enthralled by fantasy tax cuts that would never become law, even as the ones they had already passed were leading them to electoral defeat.

The GOP’s devotion to tax cutting, imaginary or otherwise, is especially notable given that the midterm elections were largely fought on substantive policy grounds. Although Trump’s character and temperament undoubtedly influenced the election, voters were focused on pocketbook issues—jobs, the economy, education, and health care.

Health care, in particular, dominated many races, with Democrats charging that Republicans didn’t support Obamacare’s pre-existing conditions regulations while GOP candidates insisted that they did. In some cases, their claims were defensible in a narrow technical sense, since most Republicans voted for Obamacare repeal bills that kept some but not all of the health law’s pre-existing conditions rules. Even still, their answers were designed to obscure more than to reveal. Republicans obfuscated about their health care ideas because, following the failure of last year’s repeal bill, they don’t really have any.

Yet as it turned out, health care was what voters cared about. CNN’s exit polls found that it was the single most important issue in the election, with 41 percent listing it as their top concern. Health care voters preferred Democrats by a wide margin. It is more than a little ironic that the health law that cost Democrats the House in 2010 probably helped Republicans lose their House majority in 2018.

When the tax law passed year, a senior White House aide contrasted Republicans with Democrats, telling The Daily Beast, “Taxes are our issue. Health care is theirs.” Republicans have almost entirely ceded that policy ground.

To become a vital force in American governance, and to compete in elections that revolve around anything other than immigration or support for the president, Republicans will need to develop clear, easy-to-articulate positions on the array of domestic policy issues that matter most to voters—particularly health care, education, and entitlements—and actually talk about them during campaigns, even, perhaps especially, when the temptation to focus on culture war issues arises.

For Republicans, that will probably mean focusing on reforms that make government programs work more efficiently rather than on new benefits and new programs. It will mean abandoning the current GOP conception of deficit-financed tax cuts as costless handouts to voters in favor of an understanding that taxes are a price we pay for government.

But smart white papers and clever talking points alone won’t be enough. The GOP needs more than a suite of new policy ideas; it needs a general theory of government—an animating idea about what the state is for, what it should do, and how, exactly, it should fund all of those things.

Because if Republicans don’t make an effort, Democrats will. They already are. Not only are the party’s likely 2020 presidential contenders rallying around Medicare for All, whatever that turns out to mean, but they are rolling out big-picture plans to expand a slew of benefits and programs. Republicans have united around opposition to these programs, but have yet to figure out what they stand for instead, which amounts to a defense of the status quo.

Since the Reagan administration, the Republican Party has been in the business of selling tax cuts, but the political effectiveness of that approach now appears to be waning. Which means that McConnell may have inadvertently been right: To compete in today’s most salient political arguments, Republicans will indeed need to find another line of work.

By Peter Suderman/Reason

Posted by The NON-Conformist

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The Fascists Are Coming for Your Social Security and Medicare

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The billionaire fascists are coming for your Social Security, Medicare and Medicaid. And they’re openly bragging about it.

Right after Trump’s election, back in December of 2016, Newt Gingrich openly bragged at the Heritage Foundation that the Trump administration and Republicans in Congress were going to “break out of the Franklin Delano Roosevelt model.” That “model,” of course, created what we today refer to as “the middle class.”

This week Mitch McConnell confirmed Gingrich’s prophecy, using the huge deficits created by Trump’s billionaire tax cuts as an excuse to destroy “entitlement” programs.

“I think it would be safe to say that the single biggest disappointment of my time in Congress has been our failure to address the entitlement issue, and it’s a shame, because now the Democrats are promising Medicare for All,” McConnell told Bloomberg. He added, “[W]e’re talking about Medicare, Social Security and Medicaid.”

These programs, along with free public education and progressive taxation, are the core drivers and maintainers of the American middle class. History shows that without a strong middle class, democracy itself collapses, and fascism is the next step down a long and terrible road.

Ever since the election of Ronald Reagan, Republicans have been working overtime to kneecap institutions that support the American middle class. And, as any working-class family can tell you, the GOP has had some substantial successes, particularly in shifting both income and political power away from voters and toward billionaires and transnational corporations.

More from Thom Hartmann @ Common Dreams

Posted by Libergirl

The End Really Is Near: Here’s a Play-By-Play of the Coming Economic Collapse as Predicted by 5 Economists

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Recoveries generally don’t die of old age. So what’s going to kill ours? Five economists call it like they see it Since June, 2009, the pit of one of the biggest recessions in American history, the U.S. economy has been growing, slowly but steadily. That’s just over nine years of uninterrupted growth.

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Image: YouTube

 

Since June, 2009, the pit of one of the biggest recessions in American history, the U.S. economy has been growing, slowly but steadily. That’s just over nine years of uninterrupted growth. If the good times roll for another year — and most economists expect they will — this expansionary period will go down as the longest ever in American history, surpassing the 120-month-long period during the ‘90s tech boom. But don’t be so quick to pop bubbly and send the confetti raining down. There’s precedence for unprecedented growth: It always ends. The economy, of course, moves in cycles.

And no matter how you slice it, it would seem there’s only so much more climbing before a fall. But what will set off a downturn? How bad will it be? And when will it actually happen? To answer these questions and more, Salon consulted with five economists, three of whom (Peter Schiff, Steve Keen and Dean Baker) predicted the 2008 financial crisis before it hit.

 

— Read on www.alternet.org/end-really-near-heres-play-play-coming-economic-collapse-predicted-5-economists

Posted by The NON-Conformist

In Latest Attempt to Harm Struggling Families, Trump Urges Lawmakers to Push One Million Americans Off Food Stamp Program

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Image: Minnesota.gov

 

With both houses of Congress preparing to merge their two versions of the farm bill, President Donald Trump announced his hope on Thursday that lawmakers will reach an agreement that kicks one million Americans off the Supplemental Nutrition Assistance Program (SNAP), also known as food stamps.

In the House’s version of the farm bill, adults between the ages of 19 and 59 would be required to either work or be enrolled in a job training program 20 hours per week to qualify for assistance.

The Senate did not include work requirements in its bill. Trump’s declaration that the Senate “should go to 51 votes” signaled the White House’s hope that Senate Majority Leader Mitch McConnell (R-Ky.) will abandon the filibuster, making it easier for Republicans to pass a farm bill that would cut down on food stamp recipients.

Work requirements for SNAP benefits are expected to reduce government spending by $20 billion over the next decade. Trump is pushing Congress to pass the measure seven months after passing the GOP tax law, which the Congressional Budget Office (CBO) projects will add nearly $2 trillion to the federal deficit within 10 years.

The Republican Party is currently working to expand on its tax legislation, with the Trump administration willing to bypass Congress in order to cut taxes on capital gains, according to the New York Times.

More from Common Dreams

Posted by Libergirl

 

With No Evidence That #GOPTaxScam Has Benefited Most Americans, Republicans Unveil Plan to Double Down on Corporate Tax Cuts

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“The new line from Republicans in Congress is that Americans are ‘better off’ because of last year’s tax cut, so we have to extend it. Well, some Americans are better off—people like me who are wealthy enough to not need work—but most Americans are still struggling.”
— Read on www.commondreams.org/news/2018/07/24/no-evidence-goptaxscam-has-benefited-most-americans-republicans-unveil-plan-double

Posted by Libergirl

Harley-Davidson to Close Kansas City Plant Citing Trump Tax Cuts Factory workers are catching on the the president’s con.

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Harley-Davidson executives rode into the White House compound nearly one year ago to meet with Donald Trump, who promised a bright future ahead for the motorcycle maker. From that embarrassing speech:

So it’s great to have Harley-Davidson.  What a great, great group of people and what a fantastic job you do.  And thank you for all of the votes you gave me in Wisconsin.  Some people thought that was an upset; I thought we were going to win it.  From the beginning, we thought we were going to win it.

Harley-Davidson is a true American icon, one of the greats.  Your motorcycles have carried American servicemembers in the war—in the wars.  They take care of our police officers.  And I see it so often—whenever I go—whenever there’s a motorcycle group, oftentimes it’s a Harley.  And the sound of that Harley is a little different, I have to tell you.  It’s really good.

So thank you, Harley-Davidson, for building things in America.  And I think you’re going to even expand—I know your business is now doing very well and there’s a lot of spirit right now in the country that you weren’t having so much in the last number of months that you have right now.  You see what’s happening.

[Emphasis added.]

Donald Trump’s predicted Harley-Davidson would expand because the spirits of the nation have been lifted with his triumph over President Obama’s booming legacy economy. Unfortunately for 800 Harley-Davidson employees in the Kansas City area, the Trump con is up and Harley-Davidson is closing the Kansas City assembly plant. From USA Today:

The Milwaukee-based company said its net income fell 82% in its fiscal fourth quarter to $8.3 million, compared with a year earlier. Earnings per share were 5 cents, down from 27 cents a year earlier. Revenue was $1.23 billion, up from $1.11 billion.

The earnings drop came in part because of a charge associated with President Trump’s tax cut and a $29.4 million charge for a voluntary product recall.

Harley-Davidson worldwide retail motorcycle sales fell 6.7% in 2017 compared to 2016. The company’s U.S. sales fell 8.5% and international sales were down 3.9%

Reuters initially reported on the charge:

NET INCOME AND EPS IN QUARTER ADVERSELY IMPACTED BY A $53.1 MILLION INCOME TAX CHARGE RELATED TO ENACTMENT OF 2017 TAX CUTS AND JOBS ACT

Thanks to community member boran2 for pointing out that Harley is simultaneously planning to build an assembly plant in Thailand.

The Kansas City plant closing will cost Harley as much as $200 million through 2019, then result in annual cash savings of $65 million to $75 million after 2020. Levatich declined to say how much production capacity will be reduced. At the same time, the company is building a factory in Thailand that will assemble bikes using components shipped from the U.S.

By Jen Hayden/DailyKos

Posted by The NON-Conformist

Trump and GOP Tax Cut Is Handing Corporations Like Ford a Giant Incentive to Move Offshore Giant corporations got what they wanted out of Republicans on taxes, now they’re lobbying the Trump administration hard to retain their NAFTA privileges.

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Ford hit Michigan and its auto workers with some crappy holiday news. Instead of building a $700 million electric vehicle factory in Michigan as promised in January, Ford will construct the plant in Mexico.

Ford reneged on its promise to Michigan workers just days after the Senate passed a tax plan intended to end levies on corporate profits made at factories offshore – in places like Mexico. News of the letdown also arrived just days before new negotiations on a revised North American Free Trade Agreement (NAFTA) are to begin in Washington, D.C.

Ford and other giant corporations got what they wanted out of Republicans on taxes, dramatically lower levies on domestic profits and total elimination on foreign profits. That makes Mexico an even more attractive manufacturing site for them than NAFTA did. So now they’re lobbying the Trump administration hard to retain the privileges that NAFTA bestowed on them. If they win that argument, they’ll have secured double incentives to offshore.

Trump administration officials don’t sound like they’re buying the corporate line, however. And they shouldn’t. NAFTA has cost Americans nearly a million jobs as thousands of factories migrated to Mexico. As he campaigned, President Trump promised untold numbers of factory workers and their families across the nation’s industrial belt that he would fix or end NAFTA to keep jobs and industry in America. He needs to keep that promise.

That means elimination of the Investor State Dispute Settlement (ISDS) scam that allows corporations to sue governments in secret courts presided over by corporate lawyers when legislatures pass laws corporations don’t like. That means standing strong on the Trump administration demands that the new pact expire in five years if it’s not working and that a substantial portion of automobiles – including Fords – be made in the USA to attain duty-free status. It means strong protection for workers’ right to organize and collectively bargain. It means substantially raising the Mexican minimum wage, which now stands at $4.70. That’s for a day, not an hour.

What it really means is prioritizing the needs of workers over the demands of corporations, something that was not done the first time around by NAFTA negotiators. As it stands now, NAFTA places all of the jeopardy on the shoulders of workers and communities while substantially eliminating normal business risks for corporations.

The jeopardy NAFTA created for workers is that its corporate-friendly provisions prompt employers to close American factories that sustain both workers and communities and move them to Mexico. This exodus of American manufacturing to Mexico has continued apace this year, even as the Trump administration began renegotiating NAFTA, probably because corporations assume they’ll get everything they want in the end. They have, after all, always done so in the past because they are, after all, massive political campaign donors and lobby firm patrons, while hourly workers are not.

Bloomberg reported in October, for example, that firms whose function it is to help corporations move factories from the United States to Mexico had a boom year in 2017, with one reporting it had done more offshoring this year than in any during the previous three decades.

Mexico is alluring because of its dirt-cheap wage rates, the paucity of environmental enforcement and the ISDS scam that lets corporations sue the government if Mexico would regulate in a way some CEO claims would crimp his profits.

The ISDS along with NAFTA’s unlimited lifespan reduce risk for corporations. Normal business decisions in capitalist systems involve some jeopardy. A chemical company could, for example, invest in developing a new pesticide, but then lose when the government bans the product after determining it kills babies as well as bugs.

NAFTA provides corporations with investment protection because it ensures they’ll get their profits even if a government changes regulations. ISDS enables corporations to sue to recoup money the corporations supposedly would have made if the government hadn’t issued new laws or regulations. The corporate-run court can order a country’s citizens to pay tens of millions to the corporation.

Some say this government-financed investment insurance corrupts capitalism. Among the significant people who have is U.S. Trade Representative Robert Lighthizer. He said corporations are insisting the government absolve CEOs of political risk. CEOs are using ISDS as a guarantee rather than buying risk insurance or factoring political risk into economic decisions about whether to move.

Lighthizer said businessmen have literally told him the administration cannot change ISDS because corporations wouldn’t have invested in Mexico without it. “I’m thinking,” he said, “‘Well, then, why is it a good policy of the United States government to encourage investment in Mexico?’”

These are the same corporate honchos who object to a five-year sunset clause for a new NAFTA, he said. They want a free eternal warranty on the provisions of a deal they describe as the world’s greatest. Lighthizer’s response is that if the deal is so great, why would the government choose to end it after five years? What are they really worried about?

The worry may be that those CEOs know NAFTA is great for their bottom line but not for the workers who elected Donald Trump President.

They know NAFTA was drafted by CEOs for CEOs. Its priorities were determined by corporate bigwigs behind doors closed to the public. Corporations designed it at the expense of workers and ordinary citizens, Joseph Stiglitz, the Nobel Prize winning economist, said in an op-ed in the Guardian newspaper this week.

It often seems, he wrote, “that workers, who have seen their wages fall and jobs disappear, are just collateral damage – innocent but unavoidable victims in the inexorable march of economic progress. But there is another interpretation of what has happened: one of the objectives of globalization was to weaken workers’ bargaining power. What corporations wanted was cheaper labor, however they could get it.”

U.S. corporations like Ford got it by writing a trade deal that gave them market-distorting profit protections, then abandoning their dedicated American workers and moving to Mexico where they could pay $4.70 a day and pollute unfettered.

President Trump has threatened to withdraw from NAFTA if his negotiators can’t get new reasonable terms that protect American manufacturing and American workers.

That is right. It’s appropriate that corporations like Ford sustain the actual risk of offshoring rather than workers bearing it all.

By Leo Gerard / AlterNe

Posted by The NON-Confomist

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