Trump's tax plan

[Allybeboba]

Some of us have been paying attention:

http://web.archive.org/web/201701010...cies/tax-plan/

As people do like to say, he has broken many of his campaign promises. What makes us think he will stick this particular plan?

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Well, to be Devil's Advocate, Trump has broken just about every campaign policy.
It'll probably be much worse.

Worse is a matter of opinion I suppose.
We will just have to wait and see. That is what I am going to do.

[Glorious Leader]

This is working out great for Kansas!
Oh, you guys haven't been paying attention to what happens when the unified GOP enacts these policies?

This is extremely important. Sam brownback and kansas is the republican model for the country.

[Ghostpanther]

Time has proven, again and again and again (since this is not the first time trickle down has been tried) that this doesn't work.

"Well maybe this time it will" is kind of a silly opinion to have when it's never worked before.

In your opinion or the ones you like to read about. I was a adult during the Reagan years, working full time as a middle class worker and things were pretty damn good.

[Shadowferal]

The Reagan years aren't proof.
At all.

(Or was that the point?)

[Ghostpanther]

The Reagan years aren't proof.
At all.

(Or was that the point?)

They are saying tax cuts for the rich do not benefit the lower workers. It worked during the Reagan years. And then was not working so good under Bush Sr. because he raised taxes. lol. Clinton did well during his 8 year term however and the economy was good.

[Kyriani]

We shall see. I think it will work out for the best. But, time proves all things.

It's been 30+ years of trickle down... how much more time does it need to finally start working?

[Ghostpanther]

It's been 30+ years of trickle down... how much more time does it need to finally start working?

It worked great for me when I was a middle class worker during the 8 years Reagan was President.

[Lenonis]

It worked great for me when I was a middle class worker during the 8 years Reagan was President.

There is a reason anecdotal evidence is discounted.

[Felya]

As people do like to say, he has broken many of his campaign promises. What makes us think he will stick this particular plan?

Because ignoring what Trump campaigned on, because you believe he is lying. Is sort of the definition of bias...

[Ghostpanther]

There is a reason anecdotal evidence is discounted.

But it still matters to the one it affects. It is bit like the odds are you will never have a car accident which results in a injury. If and when you do, the odds do not mean shit. What parts of the Reagan years where bad for the majority of the workers in the US due to tax cuts?

[Draco-Onis]

But it still matters to the one it affects. It is bit like the odds are you will never have a car accident which results in a injury. If and when you do, the odds do not mean shit. What parts of the Reagan years where bad for the majority of the workers in the US due to tax cuts?

Reagan reversed course and was behind one of the biggest tax increases in history, when he saw the deficit increase greatly he changed his mind.

[Ghostpanther]

Reagan reversed course and was behind one of the biggest tax increases in history, when he saw the deficit increase greatly he changed his mind.

When? I just read this article http://www.econlib.org/library/Enc1/Reaganomics.html and it said Reagan strongly resisted any tax increases. Bush SR however did raise taxes when he was President. Maybe I missed a part.

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Except it doesn't, because you're using it to apply to a broad spectrum of people who may not have had it the same.

Reagan definitely added jobs during his term, but we're 20 years later now. Income inequality is far greater than it was under Reagan, and some of Reagan's policies are a direct cause of that. Clinton managed to have a surplus, reducing the debt (which Reagan had doubled in an equal time period with those same policies you mentioned) instead of raising it, by RAISING the tax rate on high income earners.

In our current economy, lowering taxes on high income earners is going to HURT. Because there is a large majority of high income earners, and low income earners don't even make percentages of what they make. Reagan didn't have that situation because income inequality was not NEARLY as bad in the 80s as it is now.

But what about this part ;

Most of the effects of these policies were favorable, even if somewhat disappointing compared to what the administration predicted. Economic growth increased from a 2.8 percent annual rate in the Carter administration, but this is misleading because the growth of the working-age population was much slower in the Reagan years. Real GDP per working-age adult, which had increased at only a 0.8 annual rate during the Carter administration, increased at a 1.8 percent rate during the Reagan administration. The increase in productivity growth was even higher: output per hour in the business sector, which had been roughly constant in the Carter years, increased at a 1.4 percent rate in the Reagan years. Productivity in the manufacturing sector increased at a 3.8 percent annual rate, a record for peacetime.

[Breccia]

Sorry did I miss the part where we talk about Trump's plan to raise taxes on large families and single parents? Or the part where he wants to cut funding to a whole slew of departments just to balance the massive raise for the military, then cut taxes on the rich, unbalancing the budget even worse?

[Skandulous]

When? I just read this article http://www.econlib.org/library/Enc1/Reaganomics.html and it said Reagan strongly resisted any tax increases. Bush SR however did raise taxes when he was President. Maybe I missed a part.

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But what about this part ;

Most of the effects of these policies were favorable, even if somewhat disappointing compared to what the administration predicted. Economic growth increased from a 2.8 percent annual rate in the Carter administration, but this is misleading because the growth of the working-age population was much slower in the Reagan years. Real GDP per working-age adult, which had increased at only a 0.8 annual rate during the Carter administration, increased at a 1.8 percent rate during the Reagan administration. The increase in productivity growth was even higher: output per hour in the business sector, which had been roughly constant in the Carter years, increased at a 1.4 percent rate in the Reagan years. Productivity in the manufacturing sector increased at a 3.8 percent annual rate, a record for peacetime.

Reagan’s tax increases

1982: The most significant tax increase Reagan signed was also the first. The Tax Equity and Fiscal Responsibility Act of 1982 (yes, another law with a very sexy name) increased taxes by almost 1 percent of GDP.

The 1982 tax increase was "probably the largest peacetime tax increase in American history," said economist Bruce Bartlett, who advised Reagan on domestic policy and then worked as Treasury deputy assistant secretary for economic policy in the George H.W. Bush administration. (An analysis by Jerry Tempalski, an analyst in the Office of Tax Analysis with the U.S. Department of the Treasury, agrees.)

This law was driven by pressure to attack the federal budget deficit, as well as the impression that Reagan’s tax-cutting was partially responsible for lower-than-expected tax revenues.

Bartlett, who reviewed Reagan’s tax record for Tax Notes in 2011, cited a Treasury estimate that the 1982 law raised taxes by almost 1 percent of GDP, or about $150 billion in modern dollars.

Specifically, it rolled back some but not all of the 1981 tax cut for writing off equipment, and it repealed 1981 "safe harbor" leasing provisions, said Stephen J. Entin, senior fellow at the Tax Foundation and former deputy assistant secretary for economic policy in the Reagan administration.

1983: A law Reagan signed in 1983 aimed to keep Social Security afloat by increasing payroll taxes and taxing Social Security benefits for some high-earners. This cost $24.6 billion, or almost $50 billion in 2015 dollars, through 1988, according to an administration estimate.

1984: The Deficit Reduction Act that Reagan signed rolled back part of the 1981 cut on buildings, Entin said, with the idea that Congress would enact spending cuts. "But many of those cuts were either never enacted or were later restored," Entin said. This led to $25 billion in tax receipts.

Reagan also signed tax increases in 1985, 1986, 1987 and 1988 (as well as a couple other laws with revenue reductions).

[Ghostpanther]

Reagan’s tax increases

1982: The most significant tax increase Reagan signed was also the first. The Tax Equity and Fiscal Responsibility Act of 1982 (yes, another law with a very sexy name) increased taxes by almost 1 percent of GDP.

The 1982 tax increase was "probably the largest peacetime tax increase in American history," said economist Bruce Bartlett, who advised Reagan on domestic policy and then worked as Treasury deputy assistant secretary for economic policy in the George H.W. Bush administration. (An analysis by Jerry Tempalski, an analyst in the Office of Tax Analysis with the U.S. Department of the Treasury, agrees.)

This law was driven by pressure to attack the federal budget deficit, as well as the impression that Reagan’s tax-cutting was partially responsible for lower-than-expected tax revenues.

Bartlett, who reviewed Reagan’s tax record for Tax Notes in 2011, cited a Treasury estimate that the 1982 law raised taxes by almost 1 percent of GDP, or about $150 billion in modern dollars.

Specifically, it rolled back some but not all of the 1981 tax cut for writing off equipment, and it repealed 1981 "safe harbor" leasing provisions, said Stephen J. Entin, senior fellow at the Tax Foundation and former deputy assistant secretary for economic policy in the Reagan administration.

1983: A law Reagan signed in 1983 aimed to keep Social Security afloat by increasing payroll taxes and taxing Social Security benefits for some high-earners. This cost $24.6 billion, or almost $50 billion in 2015 dollars, through 1988, according to an administration estimate.

1984: The Deficit Reduction Act that Reagan signed rolled back part of the 1981 cut on buildings, Entin said, with the idea that Congress would enact spending cuts. "But many of those cuts were either never enacted or were later restored," Entin said. This led to $25 billion in tax receipts.

Reagan also signed tax increases in 1985, 1986, 1987 and 1988 (as well as a couple other laws with revenue reductions).

Those are not income tax increases however. I did know about the SS increases. But the overall job growth was high during his term , as was productivity and inflation was lower than it had been. The deficit did raise however , doubling. But that could be contributed to the increase in military spending. The deficit growth rate under Obama was just as bad as under Reagan however.

[Glorious Leader]

That doesn't have anything to do with what I spoke of. I'm not economist - I couldn't tell you what any of those rates mean or if they're good or bad even.

If I were to try: Real GDP per working-age adult sounds good. Productivity growth is great and all, but if you're more productive, less workers are needed - No company tries to create an EXCESS, they try to spend exactly what's needed without going over, so higher productivity means less jobs. Same goes for productivity in the manufacturing sector. So great, we're overproducing, or we're starting to lay people off cause they aren't needed any longer.

What I was able to find in a quick google search is that Reagan doubled the national debt - Which neither of his predecessors, who were handed the debt from Nixxon after the Great Depression, had done previous to him. Reagan overall lowered the overall tax rate on wealthy earners, and there was a job growth and a substantial one at that - But fast forward a few years to Clinton and we see that go in the exact opposite direction with a BIGGER result, and the national debt ended up DECREASING instead of doubling.

Maybe, just maybe, we should look at what's working BETTER and continue to iterate on that, instead of trying a method we've BEEN trying for the past 30 years that hasn't been working. (Yes, even during Reagan.)

The clinton surpluses were unsustainable. If the government is running a surplus one of three things must be happening. The trade sector is in suplus (its bringing in money from trade), the private domestic sector (me, you, businesses etc etc) is running a defecit (because the money is going to the government) or some combination of both. All have to sum to zero

The trade sector has been in deficit for 30 years or so. On the whole the US is negative on trade. That means for the government to run a surplus the private sector must be in deficit. The private sector MUST by accounting identity be in deficit and the private sector cannot sustain that for long.

Every single time the US has run a surplus a recession or depression shortly follws.

[Ghostpanther]

That doesn't have anything to do with what I spoke of. I'm not economist - I couldn't tell you what any of those rates mean or if they're good or bad even.

If I were to try: Real GDP per working-age adult sounds good. Productivity growth is great and all, but if you're more productive, less workers are needed - No company tries to create an EXCESS, they try to spend exactly what's needed without going over, so higher productivity means less jobs. Same goes for productivity in the manufacturing sector. So great, we're overproducing, or we're starting to lay people off cause they aren't needed any longer.

What I was able to find in a quick google search is that Reagan doubled the national debt - Which neither of his predecessors, who were handed the debt from Nixxon after the Great Depression, had done previous to him. Reagan overall lowered the overall tax rate on wealthy earners, and there was a job growth and a substantial one at that - But fast forward a few years to Clinton and we see that go in the exact opposite direction with a BIGGER result, and the national debt ended up DECREASING instead of doubling.

Maybe, just maybe, we should look at what's working BETTER and continue to iterate on that, instead of trying a method we've BEEN trying for the past 30 years that hasn't been working. (Yes, even during Reagan.)

Well said. I appreciate the well thought out post. Some good things to consider. Even tho Bill Clinton was a immoral scum to some Americans, the economy was good and the deficit as you said was reduced. Thus the reason he had a large approval rating when he left office. But I wonder if NAFTA bears any credit for that and it was only a temporary boost like some claim Reaganomics was?

[Killadrix]

Ugh did you even read what I wrote? Companies hire people when they think that person can add value, this is a indisputable fact for every company of every size.

If you expect a return of X% by hiring more people why wouldn't you?

Because that X% return a small business owner needs isn't necessarily monetary.

[Svad]

If it all goes to Hell and the US triggers a new Monetary crisis, Trump will without a doubt, blame Obama and the Democrats, because its their fault, for "reasons".

[Allybeboba]

Because ignoring what Trump campaigned on, because you believe he is lying. Is sort of the definition of bias...

People don't seem to ignore all of them. Just the ones they want to.

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If it all goes to Hell and the US triggers a new Monetary crisis, Trump will without a doubt, blame Obama and the Democrats, because its their fault, for "reasons".

Each side seems to blame the other when something goes awry but takes the credit when it goes great. That is the way of politics.

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Well said. I appreciate the well thought out post. Some good things to consider. Even tho Bill Clinton was a immoral scum to some Americans, the economy was good and the deficit as you said was reduced. Thus the reason he had a large approval rating when he left office. But I wonder if NAFTA bears any credit for that and it was only a temporary boost like some claim Reaganomics was?

That particular administration was fortunate enough to have been in power during the dot com boom of the nineties.