The White House claims that the Republican tax law Donald Trump signed last week provides “$5.5 trillion in tax cuts, $3.2 trillion, or nearly 60 percent, of which go to families.”
$5.5 trillion?! What the heck? We can debate about how much is going to families and how much is going to rich families, but anybody who has read any headlines over the past two months knows the Trump Tax costs $1.5 trillion. How in the name of Christmas cookies does Trump suddenly explode that dollar figure to $5.5 trillion?
Trump shows only one side of the tax ledger. He counts tax changes that cut taxes and ignores those that will increase taxes.
For example, doubling the standard deduction results in $720 billion less in tax revenues over 10 years, but repealing personal exemptions increases tax revenues by more than $1.2 trillion [Robert Farley, “Fact Check: Trump Claimed Tax Bill Provides $3.2 Trillion in Tax Cuts, But It’s Actually Less Than Half That,” USA Today, updated 2017.12.23].
Wow! That’s like claiming $84,000 (or maybe $169,000) in federal estate tax drove a family into crushing debt without mentioning that at the same time the family received $1.24 million in life insurance benefits.
But wait a minute. If the White House can say the law Trump signed last week enacts $5.5 trillion in tax cuts, we can look at the Joint Committee on Taxation’s breakdown of the budget effects and say, with the same sincerity and good faith, that Donald Trump just imposed $4.0 trillion in new taxes on Americans.
The Trump Tax: four trillion dollars in new taxes, 62% of them imposed on individuals. Thanks, Donald!
Republican math means you get to double count (2X) what you put into the set labeled, “the set we want to double count because it makes us look good.” Anything they want the public to ignore is put into the set with zero value.
Janklow double counted money all the time. Probably the most egregious example was the 1990s change in school aid formula, where the same dollars went simultaneously (in Republican math) to education and to property tax relief. That was some trick, and it fooled a number of folks for 30 years. Teachers and students paid the price for that Republican math.
Same thing happens in Wisconsin with Republican math. We used to think it was just Republican dishonesty, but there really is this thing called Republican math. Really.
If a sales cut for food tax, let us say taxes on triskets or chicken in a biscuits, were to result in $1,000 worth of spending no longer being taxed, that would mean $45 fewer dollars going to the state. And if that $45 all stayed in one person’s pocket (let us assume that there is only one prodigious cracker eater out there this tax cut affected) and that person used it to eat breakfast at a fine eatery which otherwise would not have been eaten, that is $45 into the economy. If that eatery then uses the same $45 to pay a bonus to a particularly good cook around Christmastime, that is $45 the cook would not have had otherwise. And if the cook then buys a new used golf wedge at the Play It Again store, that is $45 the store would not have had. The store, would of course, horde the money up in a bank vault never to be spent again, but those dollars would have been used 3 times. Is this French Math?
Grudz,
A study was done in the early 1990s about how much money and how many jobs were going to be generated for South Dakota’s economy by the heap leach gold mining industry. The modeling was all based on the labor force used in the underground Homestake Mine, and on the assumption that a lot of the supplies and equipment bought by the heap leach miners was going to be bought in South Dakota. Neither of those assumptions was realistic, yet it was used to sell the state on heap leach gold mining.
I did an independent study based on more realistic, but still optimistic assumptions, finding considerably fewer jobs and considerably less economic impact predicted for the mining industry. Larry Mann called it a “poof study.” My “poof study” was far more accurate in its predictions than the study done for the mining industry by the state.
When assumptions are made, as you have done, you have to consider how accurate they are. Your assumptions about the cracker eater may be highly flawed. A rational economic man might choose to find a medical reason why he’s addicted to crackers, and join a 12-step program. He may, then, spend all that money he saved on crackers somewhere else.
In accounting parlance, if credits don’t have to be offset by debits think of the Yuuuuge heights the stock market could rise. Let’s just count income and ignore expenses. Hey, I’ll pay you $10,000 and you pay me $10,000 and we both increased our income by $10,000!
Trump and his administration are the definition of deceitful. They have no shame and almost no scruples. Everything they do is used-car-style marketing.
Or, if you were Larry Mann you’d spend all the cracker money on cigarettes, which are of course taxed at a higher rate than triskets and the funding goes to support good teachers. If people don’t pay taxes, the government can’t pay teachers and teachers can’t buy triskets or cigarettes.
Here’s my math grudz. The federal government raises taxes by $45. Then instead of borrowing $45 from your grandkids, the federal government uses that $45 to pay a forest ranger. That forest ranger then eats at the restaurant using the $45 to pay the bill. The restaurant gives the $45 bonus to the cook who spends it on the used golf club. Same result as you said. The only difference is that the government now has $90 less debt than it would have if it had given a $45 tax cut rather than the $45 tax increase.
And grudz, you know as well as I that Larry Mann would have spent a portion of the money on liquor.
There is not a single South Dakotan that will not benefit from this new tax law. Even Cory, who refuses to disclose how much he would benefit, has run the same calculations many times trying to figure out how to prove “somebody” in South Dakota will be hurt but can’t so he has resorted to discover errors in addition. Good luck
Ah, but the taxpayer of the $45 increase incurred an additional $45 debt, to pay the forest ranger earnings that should have been cut from his salary in the first place. The same $45 swirls around no matter if it is the government collecting it and paying bills or it staying the hands of the tax payer who spends it on biscuits. The money is just a swirling around everywhere.
And forest rangers need to be out there cutting trees and not “rangering.”
Wealthy people who have been around for awhile have accumulated most of what they need. Let’s say that the tax increase was on Warren Buffett who wasn’t going to spend the $45 anyway. It was just going to sit in the drawer of the dresser he bought in 1955 – two twenties dated 1993 and 1997, and a five dated 2004. He won’t miss the money. He forgot it was there. So money that would otherwise not have gone into the economy entered the economy and circulated to everyone’s benefit. Warren Buffett was happy because the tax increase hit him instead of his secretary.
Speaking of disclosure, OldSalt, just how much are you being paid to push the bulloney on taxcuts for the koch bros?
Grudz erroneously assumes the fine eateru doesn’t have to use any of the 45 bucks for overhead, food, etc.
Had the koch bros bought the crackers, the store would have given them a big discount with the store taking a small loss on crackers in hopes of gaining more revenue by advertising the fact the koch bros graced their humble cracker joint.
Timber beasts cut logs. Rangers are supposed to patrol and protect all of the stuff in the environment.
OldSarg: your assumption that all will benefit is wrong. Your assumption that the government only has an input function: taxes are not collected then set on fire by the government — those tax dollars are spent. So on all the programs now and in the future that will be cut – programs that promote the general welfare and promote the security of all Americans – those cuts will be a disadvantge to all Americans.
Were you confused and thought you too were addressing your billionare friends at Mira Lago?
[OS: asked and answered.]
Those affected by Trump’s cuts to federal program will not only increase the state’s unemployment rate, but put workers in the tax bracket of not earning enough to file income taxes. This already exists among working poor that work at minimum wage jobs.
Many seniors living on fixed incomes don’t have to file taxes.
OldSarge, to put it plain and simple, is a liar.
Not everyone in South Dakota benefits from the Trump robbery.
President Bill Clinton, not President Hillary Clinton, had a simple answer when asked how he stabilized and improved the economy.
His one word answer is,
A-R-I-T-H-M-E-T-I-C
Over and over Republicans have proven that by the way they manage our economy, they don’t know much about President Clinton’s one word answer to the economy.
Mr. mike, who is from Iowa, does not understand that here in South Dakota, the greatest state, the eateruistic fellows take some of the $45 they make from breakfast and in my case give a full-on $45 bonus to the cook but in other cases pay $2 to the landlord for rent, $1 to the city for taxes, $2 to the spice shop for peppers, $10 to the light company using wind power instead of nuclear, $8 to the paper towel people in Mr. Pay’s home state of Wisconsin, $12 to the union thugs lurking outside in the alley with pipe wrenches, $4.50 to his cultish church, and then stuffs the rest into his own maw by spending it at the local tavern on a beer and a burger served by a flat-bellied young gal from Wyoming.
Is South Dakota arithmetic different in Iowa?
Grudz just fell into the wingnut math trap of spending that 45 dollars twice.
Grudz, do yerself a favor. Drumpf is mad as hell at Attorney Perjurer Sessions for leaving the senate at Drumpf’s request to become Attorney Perjurer. It is because Sessions did leave the senate that Drumpf is now blaming Sessions for the loss of Alabama’s wingnut senate seat.
Take a chance and apply for the AG’s job. You and Drumpf would make matching bookends.And forty five bucks at Drumpf’s cheapest restaurants might get you a tater sans gravy-maybe.
A Rat In The House May Eat The Ice Cream. Nope, they are the same Roger. Happy Holidays Roger and the rest of the knuckleheads on here.
Drumpf has given me the most holiday humor ever. He may get a civil war started in Merry Olde England as many in the government are practically begging Prince Harry not to invite Obama to his wedding. They believe that will set Drumpf off and sour relations with the US.
Prince Harry is not part of the government and can pretty much invite whomever he wants, Drumpf be damned.
Mr. mike, I am trying to cipher through all of your Iowa name calling, but what is Perjurer Sessions going on? And in your slobbering rage, you have overlooked that if I am a bookend for Mr. Trump, I get free breakfasts. Even in Iowa where the bacon is fatty and sliced thin.
Mr. C, there is French math, which is different, but then there is American math. A subset of American math is the Iowa flavor, in which you twitch and call out names as you recite your arithmetic, spouting rudeness at every turn. Even Minnesota math is friendly.
French math is the result of not understanding or liking real math. Americans that insist on using French math should move to France where it maybe more useful.
mfi, I wish I could share the humor you find in Trump, but it is impossible when you look at all the destruction he has and will cause
Happy Holidays, Trump hates that, to you and your family, mfi.
Cory, what is the impact ON YOU? Tell use all how it impacts you. How much more money are you making Cory?
Personally, I will have another $3,714/year based upon the calculators.
Don’t just claim you have “found” a calculator. Tell us how much you are going to benefit. Come on Cory, tell us the truth.
Every existing person who files taxes in South Dakota will benefit from this new tax law. Not a one of you can possibly prove you do not benefit. NOT A ONE OF YOU!
Why would Cory provide his income and taxes to anonymous Russian troll?
Roger were you part of the empowerment zone?
OS is now pressing the Trumpist tactic, shouting a lie so loudly and repeatedly that he thinks it becomes fact. He’s trying to flip the burden of proof to make us prove a negative. He has to prove his claim by showing that every person in this state benefits. He can’t. My link above shows he’s wrong.
Absent evidence, he tries to turn the debate into personal insult, calling me a liar. OS lies: I provided more thorough, evidence-based analysis of the original House version of the tax plan when it came out in November specific to my personal family income situation. Anyone interested in discussion moreadvanced than OS’s cheap and lazy insults can apply the information presented in that post two months ago to the new parameters of the enacted conference report.
National debt increases from 92% of GDP now to 97% of GDP by 2027 and 117% of GDP by 2037. As a nation we lose our capacity to deficit-spend when we really need to, in cases of war and economic crisis. We have less wiggle room for investments in national priorities. Every South Dakotan suffers from that added burden.
Like Trump, OS only looks at a narrow slice of the big picture. OS probably thinks he just got $5.5 trillion in tax cuts. He ignores the $4.0 trillion in new taxes Trump just signed into law. And 62.4% of those tax increases fall on individuals. Wow.
It takes $14.12 per hour to pay rent for a two bedroom in South Dakota according to a current report from Business Insider. I think making minimum wages of $15.00 an hour is a way better deal than a $300.00 tax cut. But that is actual working class math speaking. This is just a smokescreen while the roypublicans steal the Social Security from us.
I’m still a numerous of one, eh Grudz?
Roger, the humor shines through if you can imagine Drumpf as Wile E. Coyote.
Dallas News has the flow through charts about how Russian money has gone to the roypublicans by the hundreds of millions to corrupt it further. As we have seen in the lockstep tax cut march that helps Russians with their capital gains way more than Americans with their teeny tiny tax cuts. Here is how it works for South Dakota roypublicans as well as the rest of the roypublicans across the country. https://www.dallasnews.com/opinion/commentary/2017/12/15/putins-proxies-helped-funnel-millions-gop-campaigns
As noted, this corrupt money not only goes to national roypublicans it also goes to state roypublicans all courtesy of a hostile Russian military takeover.
The point of my example above is not to say that the government can spend Warren Buffett’s $45 better than he can. The point is that the wealthy special interests have succeeded in slanting the tax code such that Warren Buffett’s effective tax rate is far lower as a percentage of income than that of his secretary. So besides the fact that he can afford to pay the $45 without any pain whatsoever, increasing Warren Buffett’s taxes by $45 would take the country a small distance back toward equalizing the tax rates of the wealthy Mr. Buffett and his less well off secretary who can’t afford to have lobbyists write the tax code in her favor.
And increasing Mr. Buffett’s taxes by $45 would also reduce the deficit rather than expanding the deficit as the Republicans have now succeeded in doing.
Unfortunately in addition to expanding the deficit, The Trumpanomics tax plan slants the tax code even more in favor of Mr. Buffett – and Mr. Trump – than it was before the Republican Party messed with it. Those big money donors and their lobbyists got their way again, much to the chagrin of Warren Buffett – that son of a Republican Congressman – who nonetheless believes that the tax code should not be slanted so much in his favor. There is no notion of “the common good” within the Republican Party any more.
Your point is well taken Mr. Rorschach, what is even more to that point is the fact that many small business owners as well as their employees are going to be stiffed with this giveaway to the rich. Here is why you should call your accountant to see the screwing you are going to be getting https://twitter.com/subodhchandra/status/943105714561650689 These are not isolated cases either and they are not from some out of the way liberal states, they are here in South Dakota just like they are in Connecticut. This is bad law plain and simple, that was poorly written with the only idea to make the rich richer. You already know who is to blame for this as they are currently in office show them the door and then kick their behinds through it.
On Sept. 13 Trump said:
“The rich will not be gaining at all with this plan. We are looking for the middle class and we are looking for jobs — jobs being the economy.”
Now Trump has changed his story:
President Trump kicked off his holiday weekend at Mar-a-Lago Friday night at a dinner where he told friends, “You all just got a lot richer,” referencing the sweeping tax overhaul he signed into law hours earlier.
https://www.cbsnews.com/news/trump-mar-a-lago-christmas-trip/
If the difference is in definitions rather than math, we might have miss judged this. 1.5 trillion in debt growth is not the same as 1.5 trillion in tax cuts. If a tax cut brings a little growth in the economy and profits go up a little so that there is an increase in (just to pick a number) .5 trillion in more revenue from more profits and 2 trillion in tax cuts, then it would come out to 1.5 trillion in debt growth.
Reagan did not know that this would not eventually balance until after he was elected so he later raised taxes. But by then he had wrecked the system bad enough that he could not balance it himself but Bill Clinton did balance it. Bill raised taxes. Reagan started the kick the can down the road policy and Clinton proved it could be fixed. Republicans have not to this point figured that our yet.