Monday, September 26, 2016

Here is Donald Trump's economic plan as promoted by his advocates.

Trump's plan contains elements of a traditional conservative agenda, like cutting corporate tax rates and reducing regulations, but mainly it focuses on reducing the "pull" of domestic investment offshore and the "push" of American jobs to foreign countries. Trump would do that by renegotiating trade deals (through which, the paper says, Trump would be able to close the country's $500 billion trade deficit), as well as getting the World Trade Organization to change rules that treat countries that rely more heavily on income taxes, like the U.S., differently than those that rely on "value-added tax" systems, like Germany, China and Mexico.
Navarro and Ross write that Trump's plan would increase annual economic growth to an average of 3.5 percent. "They also believe that, coupled with spending cuts, the plan will generate additional tax revenues that will make up for all the revenues lost from his tax cuts - between $4.4 and $5.9 trillion, by one analysis - meaning the plan would not add to the deficit. The independent Center for a Responsible Federal budget disagrees with that assessment, projecting Trump would in total add $5.3 trillion to the budget; its analysis did not account for any higher growth from the plan," Tankersley writes. Read the full paper here and Tankersley's explanation here.

WASHINGTON ― In late August, the private equity firm chaired by billionaire Wilbur Ross agreed to pay a $2.3 million fine and return $11.8 million that regulators said it had bilked from its own clients ― which included pension funds and universities. On Wednesday, Ross co-authored an economic analysis for Donald Trump.
The Securities and Exchange Commission had alleged that WL Ross & Co. failed “to disclose its fee allocation practices” for more than a decade in some private equity funds it managed. In human-speak, the SEC was accusing the firm of fudging its numbers to steal from its investors. This week, Ross was attempting to rebut calculations from a conservative think tank that Trump’s economic plan doesn’t add up. To do so, he relied on magic numbers and fantastical thinking. 
Analyzing Trump’s tax policies, The Tax Foundation concluded that they would cost $2.6 trillion over the next decade. This was a low estimate ― when the group ran the numbers without relying on assumptions about tax cuts for the wealthy stimulating economic growth, the hit to the national debt would have been as high as $5.9 trillion.

Tuesday, September 20, 2016

Carried Interest Tax Loophole

A hedge fund manager in Chicago gets paid $4 million per day and pays a lower tax rate than average working families. That's because of something called the "carried interest loophole.” 1
This loophole allows investment managers at hedge funds and in private equity to pay a reduced tax rate of 23.8 percent on the portion of their income deemed as a capital gain—or, return on investment. This is a lower effective tax rate than what middle-class families face. Further, it is far lower than the rate they would face if this income was correctly classified as simply the salary they earn for managing other peoples’ investments.
Hillary Clinton, Bernie Sanders and Elizabeth Warren all agree that we must close this loophole, which allows Wall Street money managers to pay a lower tax rate than working families. But far too many members of Congress have been silent on this issue.
They need to hear from you today!
Click here to sign the petition to Congress to close the “carried interest loophole,” which allows certain investment managers to pay a lower effective tax rate than you and me.

Since 1979 the top 1 percent’s income share has doubled. And last year, the top 25 hedge fund managers earned a total of $13 billion. By closing loopholes that benefit the top 1 percent, we’ll be able to invest in programs that help working families, such as accessible, affordable, high-quality child care and early childhood education.
Even many Republicans won’t defend this kind of special treatment for the super-rich in public. In fact, even Donald Trump wants to close this particularly egregious loophole—though, in typical Trump fashion, his plan then returns this money to the richest households by cutting other taxes and introducing new egregious loopholes.
It’s time for Congress to listen to working people, not lobbyists and wealthy campaign contributors.
Sign the petition to Congress today to close the “carried interest loophole” and use the tax code to restrain the incomes of the top 1 percent.
Together let’s build an economy that works for all Americans, not just the wealthy few.
Thank you,
Josh Bivens
Research and Policy Director, EPI Policy Center

Tuesday, September 13, 2016

Trump's Economic Vision Could Blow A $1 Trillion Hole In U.S. Economy, Study Finds | Huffington Post

Trump's Economic Vision Could Blow A $1 Trillion Hole In U.S. Economy, Study Finds | Huffington Post

Poverty in California

The US Census Bureau this morning released new national and state-level figures based on the Supplemental Poverty Measure (SPM). The SPM improves on the official poverty measure by better accounting for costs of living as well as for the various resources (including noncash benefits like food assistance) that families use to cover expenses.

A new Budget Center analysis discusses these latest SPM data, which show that 20.6 percent of Californians struggled to make ends meet on average between 2013 and 2015 — the highest rate of any state in the nation. The Budget Center's analysis discusses how high housing costs contribute to California's poverty rate under the SPM, looks at the role that Social Security, tax credits for working families, and other public supports play in lifting families out of poverty, and identifies ways that policymakers can address financial hardship and help families climb the economic ladder.

Thursday, September 8, 2016

Neo Liberalism - Defined

Definition.  Neoliberalism.
In addition to an economic policy, neoliberalism is also a political project.

 Important components of neo liberalism are the consideration of the market as a pre eminent process of decision making. Markets are privileged and regulations or rules on trade and commerce are opposed.  Advocates of neoliberalism promote cutting public expenditures such as schooling and health care and social services. The promote deregulation of markets such as eliminating the Glass Steagals limits on banking and deregulation of any practice that produces profits for some.

In many places they promote privatization of state owned enterprises through private investment, including energy companies, utilities, and similar companies. 

1.    The Rule of the Market which liberates “free” enterprise from any bonds (regulations) imposed by the government no matter how much social damage this causes.
2.    Cutting Public Expenditures for social services such as education and health care.
3.    Deregulation of any policies, practices or laws that could diminish profits, including environmental protection and worker safety.
4.    Privatization of state owned enterprises, goods, and services through sales to private investors
5.    Eliminating the Concept of “The Public Good” or “Community” and replacing it with “individual responsibility.” (Martinez & Garcia, 2000)
6.    Assaults on labor unions.

*The adoption of neo liberal policies by main stream Democrats helps to explain the anger of a portion of the White working class and their abandonment of the Democratic Party.

Raising Wages and Rebuilding Wealth | Center for American Progress

Raising Wages and Rebuilding Wealth | Center for American Progress