« Links for 11-15-17 | Main | Economics Gets Out More Often: Using Extramural Citations to Assess Economic Scholarship »

Friday, November 17, 2017

Paul Krugman: Everybody Hates the Trump Tax Plan

"The only significant winners would be those making more than $1 million a year.":

Everybody Hates the Trump Tax Plan, by Paul Krugman, NY Times: Looking at the reactions to Republican tax plans, I found myself remembering what people used to say about former Senator Phil Gramm...: “Even his friends don’t like him.”...
The general public strongly disapproves — by a 2-1 majority, according to Quinnipiac, although the majority would be even bigger if people really understood what’s going on. But surely at least C.E.O.s like the plan, right?
Actually, not so much. A few days ago Gary Cohn, Donald Trump’s chief economic adviser, met with a group of top executives. They were asked to raise their hands if lower taxes would lead them to raise capital expenditures; only a handful did. “Why aren’t the other hands up?” asked Cohn, plaintively.
The answer is that C.E.O.s ... know that tax rates aren’t that important a factor in investment decisions. ...Most serious economic analyses agree..: Corporate tax cuts wouldn’t actually do much to raise investment. They would, however, explode the budget deficit.
So in an attempt to limit that deficit blowout, Senate Republicans are proposing significant tax increases on working families..., taxes would rise on average for every group with incomes under $75,000 a year... The only significant winners would be those making more than $1 million a year. Populism!
Oh, and this doesn’t even take account of the health care sabotage... By repealing the mandate ... the plan would ... cause 13 million to lose coverage; that loss of coverage, and the associated government subsidies, is why mandate repeal saves money that can be given to corporations. But the move would also drive up premiums... So that’s an additional, hidden indirect tax on the middle class.
Nor does it take account of what would inevitably come next: tax-cut-induced deficits would, by law, trigger cuts in Medicare, and this would just be the start of a G.O.P. assault on programs like disability insurance...
All of which raises the question, why are Republicans even trying to do this? It’s bad policy and bad politics, and the politics will get worse as voters learn more about the facts. Well, last week one G.O.P. congressman, Chris Collins of New York, gave the game away: “My donors are basically saying get it done or don’t ever call me again.”
So we’re talking about government of the people, not by the people, but by wealthy donors, for wealthy donors. Everyone else hates this plan — and they should.

    Posted by on Friday, November 17, 2017 at 09:56 AM in Economics, Politics, Taxes | Permalink  Comments (13)


    Comments

    Feed You can follow this conversation by subscribing to the comment feed for this post.