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Alexander Hendrie  6/24/2021LikeComments|4

The IRS has a history of corruption and incompetence


President Joe Biden has proposed drastically expanding the IRS.a man standing in front of a brick building© Provided by Washington Examiner

Biden’s plan calls for hiring over 87,000 agents, more than doubling the agency’s workforce. It also allocates $80 billion in new funding over the next decade, a 67% annual increase compared to 2021 funding levels. This plan will give the IRS new “specialized enforcement staff” and force banks and payment apps like Venmo to report the inflows and outflows of businesses and people.https://products.gobankingrates.com/pub/84d1cf40-924a-11eb-a8c2-0e0b1012e14d

This proposal is a terrible idea, given that the IRS has repeatedly proven that it cannot do its job.

Last week, ProPublica disclosed that it had received the tax returns of thousands of taxpayers covering 15 years, including those belonging to Warren Buffett, Jeff Bezos, Mark Zuckerberg, and Michael Bloomberg. If this information is true, it was either obtained through someone hacking the IRS database or through an IRS employee illegally disclosing the information, a felony punishable by up to five years in jail time.

While this leak is concerning, it should not be surprising. The IRS has a long history of ineptitude, incompetence, and corruption. In 1997 and 1998, congressional hearings documented numerous examples of an out-of-control IRS.

A 1998 article by the New York Times described “military style raids” by IRS agents against taxpayers who were accused of nonviolent behavior. Another 1998 article, this time from the Washington Post, noted testimony from several small-business owners across the country. They described dozens of armed IRS officials raiding their offices, seizing business documents, and harassing clients and employees. In each case, the agency found no evidence of wrongdoing.

After these revelations, important reforms were passed by Congress to protect taxpayers. However, IRS malfeasance has continued in the years since.

During the Obama administration, the IRS targeted conservative groups applying for nonprofit status ahead of the 2012 election. Under the lead of IRS Exempt Organizations Director Lois Lerner, the agency ensured just one conservative nonprofit organization received tax-exempt status over a three-year period. No IRS employee was disciplined for this scandal. The Obama Department of Justice closed its investigation with no charges, and Lerner was permitted to retire with a pension and a bonus.

Around this time, an IRS employee illegally leaked the sensitive donor information of a conservative group, the National Organization for Marriage. The IRS claimed the information was released “inadvertently” and paid a modest $50,000 settlement.

In addition to a record of targeting taxpayers, the IRS also routinely fails to perform basic tasks.

The IRS has failed to complete legally mandated annual tax complexity reports since 2002. When asked in 2015 why it wasn’t doing the report, the IRS noted that it would take two full-time employees to do so. A 2021 Treasury Inspector General for Tax Administration report found that 40% of printers in tax processing centers were not working, but the only problem with many of the printers was that no employee had replaced the ink or emptied the waste cartridge container.

A 2016 report found that the IRS failed to document the return of laptops containing sensitive taxpayer data. The report estimated that the IRS did not properly document over 1,000 computers used by contract employees. A 2017 report found that the agency rehired more than 200 employees who were previously employed by the agency but fired for previous conduct or performance issues.

The IRS failed to hire 5,000 new employees between 2017 and 2019. The agency had been allocated funding for this staff, so these hiring woes are due to bureaucratic problems, including the fact that the IRS has not updated its workforce plan in 15 years. Further, the IRS has a union contract that requires it to consider internal applicants before hiring externally, a process that TIGTA says leads to a “waste of time and resources” and often results in the agency “shuffling existing employees around.”

In 2013, IRS employees spent over 520,000 hours on union activities, costing taxpayers $23.5 million in salary and benefits.

Biden’s plan to give the IRS $80 billion is reckless at best. Even Obama-era IRS Chief John Koskinen, a longtime advocate of increasing IRS funding, believes Biden’s IRS expansion is excessive. In an interview with the New York Times, Koskinen said the IRS could not properly use the $80 billion, saying, “I’m not sure you’d be able to efficiently use that much money.”

The IRS needs reform to ensure that it properly does its job and does not unfairly target particular taxpayers. In contrast, Biden’s plan would only throw more money at a broken agency.

Alexander Hendrie is the director of tax policy at Americans for Tax Reform.

Tags: OpinionBeltway ConfidentialBlog ContributorsTax

Original Author: Alexander Hendrie

Original Location: The IRS has a history of corruption and incompetence

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November 16, 2021

Heather Cox Richardson4 hr ago23960

Today, President Joe Biden hit the road to sell the benefits of the $1.2 trillion bipartisan infrastructure bill he signed into law yesterday. In Woodstock, New Hampshire, today, standing at a bridge deemed structurally unsafe—one of the 215 unsafe bridges in New Hampshire—Biden said “Clean water, access to the internet, rebuilding bridges—everything in this bill matters to the individual lives of real people. This is not something abstract.”

The popularity of the new law was evident today when Republicans began to tout its benefits for their districts, despite their votes against it. Representative Gary Palmer (R-AL), for example, told his constituents: “Funding the Northern Beltline has consistently been one of my top priorities.” He added, “Birmingham is currently one of the largest metropolitan areas in the country without a complete beltline around it. Completing the Northern Beltline will benefit the entire region and enhance economic development and employment opportunities.” Completion of the road will create more than $2 billion in 10 years, he noted, and could create 14,000 jobs.

And yet, Palmer voted against the bill. When it passed, he tweeted: “The Democrats’ recklessly expensive infrastructure bill finally passed tonight after weeks of disarray among their caucus.”

Since Biden took office, the Democrats have used the government to help ordinary Americans. In the wake of the 2008 crash, the government badly underinvested in the economy, leaving consumers unable to recharge it. After a terribly slow recovery, the economy stabilized and then, once again, crashed during the pandemic. In spring 2020, millions of people lost their jobs, incomes plummeted, and spending fell off a cliff.

Worried we would make the same mistake twice, leaving the country to limp along, lawmakers pushed money into the economy. In spring 2020, Congress passed the $2.2 trillion bipartisan CARES Act, then in December 2020, the $900 billion bipartisan aid package. Then, in March 2021, the Democrats passed the $1.9 trillion American Rescue Plan.

These put more than $3 trillion into the economy, raising incomes and enabling individuals to put money into savings. Yesterday, the government sent out its fifth monthly payment to the families of around 61 million eligible children under the child tax credit that Democrats expanded under the American Rescue Plan. Yesterday’s payments were around $15 billion. So far, the program has delivered about $77 billion to families across the country which, in turn, enables them to buy household goods that pump money into the economy.

By protecting individuals’ incomes, the government also protected income tax revenues, enabling state and local governments to continue to function, while the money in people’s pockets has also meant they continued to buy goods, keeping sales taxes producing money. Far from collapsing, as it looked like they might in the early days of the pandemic, state and local governments are currently strong financially.

Other economic news is also good. Today, news broke that the government has badly underestimated job growth. Between June and September, the Bureau of Labor Statistics underestimated job growth by 626,000 jobs. The pandemic meant that businesses were slow to fill out paperwork, and this, in turn, meant numbers were underreported.

Goldman Sachs says that by the end of 2022, the nation’s unemployment rate will be at a 50-year low. Unemployment is currently at 4.6% and is expected to be at 3.5% by the end of the year, a rate that will match that of 2019, which was the lowest in 50 years.

Retail sales are also higher than expected. They are 16% higher now than they were a year ago, during the height of the pandemic. They jumped 1.7% in October, with Americans spending about $638.2 billion in that month. The National Retail Federation expects strong holiday retail sales. J.P. Morgan has upgraded its growth expectations for gross domestic product in the fourth quarter from 4% to 5%.

Products are also refilling shelves. Walmart today reported that it will have full shelves for the holiday season.

On all of this news, the stock market rose again.

All of these indicators are excellent, and they reflect the government’s protection of the demand side of the economy to prevent a situation in which the economy can’t recover from a recession because not enough people have enough money to get things moving again.

But now we are looking at a very different problem. The pandemic crashed supply chains across the world, creating a supply shortage (someone described this as the parking lot after a concert, when everyone is trying to leave at once, and as someone who once spent 4.5 hours trying to get out of a parking lot after a U2 concert, I love this comparison). Prices are rising as people who have money, thanks to lawmakers’ efforts to guarantee that we didn’t prolong a recession because of a demand problem, are trying to get scarce goods.

This has created 6.2% inflation in consumer prices, 4 points above the 2% inflation for which government officials aim, and a 30-year high. (Interestingly, gasoline prices, to which people look as a sign of inflation and which have risen about $1.50 a gallon from their low during the pandemic when no one was buying gas, are a reflection of global oil prices and have little to do with U.S. policies.)

Treasury Secretary Janet Yellen says that the smoothing out of supply chains and the end of the pandemic—if we can finally manage the pandemic—will bring prices back to expected levels, and Biden’s work with ports and shippers to expand their operations in order to clear bottlenecks appears to be having an effect. Bloomberg reports that the number of containers sitting on docks at the port of Los Angeles had declined 29% from its high. Still, the Federal Reserve has begun to scale back its support for the economy to try to cool the market.

Mike Pyle, chief economic adviser to the vice president, told Catherine Lucey and Alex Leary of the Wall Street Journal, “We continue to bet that as the economy recovers, as the pandemic abates, as a lot of the work that we’re doing to unclog supply chains and make them higher velocity and more fluid, as those things happen these pressures are going to abate.”

But concerns about inflation are affecting the Democrats’ plans for the larger Build Back Better infrastructure plan. Republicans insist that more investment will raise prices further, and conservative Democrat Joe Manchin (D-WV) has expressed his own concerns. Administration officials counter that the Build Back Better plan will lower key costs for families, especially childcare and medical expenses, and that since it is a long-term investment to be disbursed over ten years it will not have any immediate inflationary tendencies, while it will build long-term wealth for ordinary people.

With the economy so strong, so far only about 5% of Americans say that inflation is the most important issue facing the country. But painful memories of the crippling stagflation of the 1970s, when rising prices, rising energy costs, and the end of price controls instituted under President Richard Nixon sent inflation briefly over 12%, linger.

Republicans are hammering on this fear. Senator Rick Scott (R-FL), the chair of the National Republican Senatorial Committee, the fundraising arm of the Senate Republicans, said recently: “You can see what’s going to happen next. We’re going to continue to have inflation, and then interest rates will go up…. This is a gold mine for us.”

Notes:

https://www.washingtonpost.com/business/2021/11/16/government-underestimated-job-growth/

https://www.cnn.com/2021/11/15/economy/unemployment-rate-goldman-sachs/index.html

https://www.whitehouse.gov/briefing-room/statements-releases/2021/11/16/statement-by-director-of-the-national-economic-council-brian-deese-on-increasing-retail-sales/

https://www.washingtonpost.com/business/2021/11/16/retail-sales-october/Carl Quintanilla @carlquintanilla(Bloomberg) – The number of containers sitting on docks at the port of Los Angeles has declined 29%, CEO Gene Seroka says. (via @business @conorsen) November 16th 2021969 Retweets2,869 Likes

https://www.wsj.com/articles/us-economy-october-2021-retail-sales-11637009365?mod=hp_lead_pos1

https://www.npr.org/2021/11/16/1056268965/biden-picks-a-rickety-new-hampshire-bridge-as-a-scene-to-sell-his-infrastructure

https://palmer.house.gov/media-center/press-releases/palmer-new-funding-birminghams-northern-beltline

https://home.treasury.gov/news/press-releases/jy0482

​​https://www.nber.org/system/files/chapters/c11462/c11462.pdf

https://www.reuters.com/business/finance/fed-officials-say-high-inflation-weighing-consumers-needs-be-controlled-2021-11-16/

https://www.wsj.com/articles/biden-inflation-economy-spending-11636845241

https://www.wsj.com/articles/why-biden-isnt-benefiting-from-a-strong-economy-11636548983

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November 14, 2021

Heather Cox Richardson

 November 14, 2021

Comment: The GOP (in all of its iterations) which has done nothing for the people since the 1800’s. It has continuingly lied about everything to keep power and enable its big money donors. The GOP did not want social security to become law (where would a lot of us be without it?) Right now, they are backing the insurrectionists and Trumpian lies to gain and maintain power. With the upcoming midterm elections, they are obstructing any initiatives that will gain votes and make the current administration look bad. We should all remember that what they do affects all of for better (if you make 500 thousand annually or more) or worse if you earn $150 thousand and less annually. MA

Last night, Trump’s disgraced former national security advisor Michael Flynn spoke at the “Reawaken America” conference in San Antonio, Texas, designed to whip up supporters to believe the 2020 election was stolen and that coronavirus vaccines are an infringement on their liberty. Flynn told the audience: “If we are going to have one nation under God, which we must, we have to have one religion. One nation under God, and one religion under God.”This statement flies in the face of our Constitution, whose First Amendment reads: “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof….” James Madison of Virginia, the key thinker behind the Constitution, had quite a lot to say about why it was fundamentally important to make sure the government kept away from religion.

In 1772, when he was 21, Madison watched as Virginia arrested itinerant preachers for attacking the established church in the state. He was no foe of religion, but by the next year, he had begun to question whether established religion, which was common in the colonies, was good for society. By 1776, many of his broad-thinking neighbors had come to believe that society should “tolerate” different religious practices; he had moved past tolerance to the belief that men had a right of conscience.

In that year, he was instrumental in putting Section 16 into the Virginia Declaration of Rights on which our own Bill of Rights—the first ten amendments to the Constitution—would be based. It reads, “That religion, or the duty which we owe to our Creator, and the manner of discharging it, can be directed only by reason and conviction, not by force or violence; and therefore all men are equally entitled to the free exercise of religion, according to the dictates of conscience; and that it is the mutual duty of all to practice Christian forbearance, love, and charity toward each other.”

In 1785, in a “Memorial and Remonstrance against Religious Assessments,” he explained that what was at stake was not just religion, but also representative government itself. The establishment of one religion over others attacked a fundamental human right—an unalienable right—of conscience. If lawmakers could destroy the right of freedom of conscience, they could destroy all other unalienable rights. Those in charge of government could throw representative government out the window and make themselves tyrants.

Madison believed that a variety of religious sects would balance each other out, keeping the new nation free of the religious violence of Europe. He drew on that vision explicitly when he envisioned a new political system, expecting that a variety of political expressions would protect the new government. In Federalist #51, he said: “In a free government the security for civil rights must be the same as that for religious rights. It consists in the one case in the multiplicity of interests, and in the other in the multiplicity of sects.”

Right on cue, Flynn’s call for one religion runs parallel to modern Republican lawmakers’ determination to make their party supreme.

The 13 Republicans in the House who were willing to vote yes and give Democratic president Joe Biden a win with the popular bipartisan infrastructure bill are now facing increasing harassment, including death threats from Trump supporters. Although he talked about passing his own infrastructure bill, former president Trump opposed the measure on Biden’s watch, and Georgia Representative Marjorie Taylor Greene called those voting for it “traitor Republicans.”

Meanwhile, Republicans remain silent about the video released by Representative Paul Gosar (R-AZ), showing a cartoon version of himself killing a Democratic congresswoman. Sixty Democratic representatives are sponsoring a bill to censure Gosar; not even the Republican Minority Leader, Kevin McCarthy (R-CA), has condemned the video.

It turns out the plot to overturn the election of a Democratic president was wider than we knew. New information from a forthcoming book by ABC News chief Washington correspondent Jonathan Karl reveals that Trump’s chief of staff Mark Meadows was deeply involved. On New Year’s Eve, Meadows emailed to then–vice president Mike Pence’s top aide a memo outlining how Pence could steal the election for Trump.

On Friday, Meadows refused to testify before the House Select Committee to Investigate the January 6th Attack on the U.S. Capitol, ignoring a subpoena. His lawyer, George Terwilliger III, said that Trump had told him not to testify on the grounds of executive privilege, but as far as I can tell, Trump has not actually made that claim over Meadows’s testimony.

That did not stop Meadows’s lawyer from taking to the pages of the Washington Post to try to defend his client. His op-ed was quite misleading both about precedent and about the limits of executive privilege: as the committee chair Bennie Thompson (D-MS) and vice-chair Liz Cheney (R-WY) said, “there’s nothing extraordinary about the Select Committee seeking the cooperation of a former senior administration official. Throughout U.S. history, the White House has provided Congress with testimony and information when it has been in the public interest. There couldn’t be a more compelling public interest than getting answers about an attack on our democracy.”

But Terwilliger insisted the committee was out of bounds in demanding that Meadows testify. He indicated that the only reasonable compromise between the committee and Meadows was for the former chief of staff to answer written questions.

Terwilliger seems concerned that Meadows will get caught in lies if he testifies. The select committee says that “Meadows has failed to answer even the most basic questions, including whether he was using a private cell phone to communicate on January 6th, and where his text messages from that day are.” That sure makes it sound like they have information on his actions that day, leaving him open to getting caught if he tries to lie. Written answers are much safer.

Representative Adam Schiff (D-CA), chair of the House Intelligence Committee and member of the select committee, said today the committee would move forward quickly to refer Meadows to the Department of Justice for criminal contempt of Congress.

As Madison foresaw, the Republicans’ attempt to cement their power endangers the country. On Friday, the House Select Subcommittee on the Coronavirus Crisis released transcripts of interviews with officials from the Centers for Disease Control and Prevention acknowledging that Trump administration officials stopped them from talking to the public and altered their scientific guidance about the coronavirus, accusing them of trying “to harm our commander in chief, the President.” More than 750,000 Americans have now died from COVID.

Their power play hurts us abroad, as well. Tensions surrounding Russia remain high. Yesterday, Secretary of State Antony Blinken talked to Polish Foreign Minister Zbigniew Rau to reaffirm U.S. support for Poland—a member of the North Atlantic Treaty Organization—as Belarus’s leader Alexander Lukashenko tries to destabilize Europe by forcing migrants over the Polish border. The State Department noted that the turmoil on the Polish border “seeks to threaten security, sow division, and distract from Russia’s activities on the border with Ukraine,” where Russian president Vladimir Putin has recently pushed a large military buildup.

But, as Senator Chris Murphy (D-CT) pointed out this morning, “Senate Republicans are blocking the confirmation of our NATO and EU Ambassadors so as to deliberately hamper global security…because they believe global instability will hurt Biden, and hurting Biden is all that matters.”

Notes:

[I corrected the spelling of “practice” in Madison’s quotation.]

https://abcnews.go.com/Politics/memo-trump-attorney-outlined-pence-overturn-election-book/story?id=81134003

https://www.theguardian.com/us-news/2021/sep/03/trump-loyalists-doctors-ministers-reawaken-america-tour

https://www.cnbc.com/2021/11/12/trump-white-house-chief-of-staff-mark-meadows-ducks-jan-6-riot-panel-.html

https://january6th.house.gov/news/press-releases/thompson-cheney-statement-mark-meadows-0

https://www.washingtonpost.com/opinions/2021/11/13/abandoning-executive-privilege-biden-rejects-200-years-history/

https://www.cnn.com/2021/11/12/politics/house-committee-cdc-covid-trump-administration-response/index.html

https://www.businessinsider.com/bipartisan-infrastructure-bill-death-threat-andrew-garbarino-arrest-gop-pressure-2021-11

Twitter avatar for @ianbassin

Ian Bassin

@ianbassin

New documents show Trump Admin silenced CDC at start of pandemic, tried to alter expert scientific reports, and then tried to delete evidence they were doing so. We were the most prepared nation in the world but now more than 750,000 Americans have died.

House committee releases new evidence from investigation into Trump administration interference with CDC during Covid-19 pandemic

Dr. Jonathan Reiner reacts to President Donald Trump telling the Wall Street Journal that he “probably won’t” get a Covid-19 vaccine booster.

cnn.com

November 13th 2021

18,529 Retweets37,358 Likes

Twitter avatar for @hugolowell

Hugo Lowell

@hugolowell

New: Lawyer for Trump WH chief of staff Mark Meadows says in WaPo Op-Ed that one solution to standoff with Jan. 6 committee is written questions — appearing to suggest Meadows is afraid of perjuring himself

November 14th 2021

2,879 Retweets11,964 Likes

https://founders.archives.gov/documents/Madison/01-01-02-0027

https://www.archives.gov/founding-docs/virginia-declaration-of-rights

https://founders.archives.gov/documents/Madison/01-08-02-0163#JSMN-01-08-02-0163-fn-0014-ptr

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Robert Reich, a former US secretary of labor, is professor of public policy at the University of California at Berkeley and the author of Saving Capitalism: For the Many, Not the Few and The Common Good. His new book, The System: Who Rigged It, How We Fix It, is out now. He is a Guardian US columnist. His newsletter is at robertreich.substack.com

OpinionEconomic policy

Corporate giants are raising prices even as they rake in record profits. How can this be? Because of their unchecked power

Thu 11 Nov 2021 09.14 EST

On Wednesday, the US labor department announced that the consumer price index – a basket of products ranging from gasoline and health care to groceries and rents – rose 6.2% from a year ago. That’s the nation’s highest annual inflation rate since November 1990.

Republicans are hammering Biden and Democratic lawmakers over inflation – and attacking his economic stimulus plans as wrongheaded. “This will be a winter of high gas prices, shortages and inflation because far left lunatics control our government,” Marco Rubio, the Republican senator from Florida posted on Twitter Thursday.

A major reason for price rises is supply bottlenecks, as Jerome Powell, chair of the Federal Reserve, has pointed out. He believes they’re temporary, and he’s probably right.

But there’s a deeper structural reason for inflation, one that appears to be growing worse: the economic concentration of the American economy in the hands of a relative few corporate giants with the power to raise prices.

If markets were competitive, companies would keep their prices down in order to prevent competitors from grabbing away customers.

But they’re raising prices even as they rake in record profits. How can this be? They have so much market power they can raise prices with impunity.

Viewed this way, the underlying problem isn’t inflation per se. It’s lack of competition. Corporations are using the excuse of inflation to raise prices and make fatter profits.

In April, Procter & Gamble announced it would start charging more for consumer staples ranging from diapers to toilet paper, citing “rising costs for raw materials, such as resin and pulp, and higher expenses to transport goods”.

But P&G is making huge profits. In the quarter ending 30 September, after some of its price increases went into effect, it reported a whopping 24.7% profit margin. It even spent $3bn during the quarter buying its own stock.

It could raise prices and rake in more money because P&G faces almost no competition. The lion’s share of the market for diapers, to take one example, is controlled by just two companies – P&G and Kimberly-Clark – which roughly coordinate their prices and production. It was hardly a coincidence that Kimberly-Clark announced price increases similar to P&Gs at the same time P&G announced its own price increases.

Or consider another consumer product duopoly – PepsiCo (the parent company of Frito-Lay, Gatorade, Quaker, Tropicana, and other brands), and Coca-Cola. In April, PepsiCo announced it was increasing prices, blaming “higher costs for some ingredients, freight and labor”. Rubbish. The company didn’t have to raise prices. It recorded $3bn in operating profits through September.

If PepsiCo faced tough competition, it could never have gotten away with this. But it doesn’t. To the contrary, it appears to have colluded with Coca-Cola – which, oddly, announced price increases at about the same time as PepsiCo, and has increased its profit margins to 28.9%.

You can see a similar pattern in energy prices. If energy markets were competitive, producers would have quickly ramped up production to create more supply, once it became clear that demand was growing. But they didn’t.

Why not? Industry experts say oil and gas companies saw bigger money in letting prices run higher before producing more supply. They can get away with this because big oil and gas producers don’t operate in a competitive market. They can manipulate supply by coordinating among themselves.

Since the 1980s, two-thirds of all American industries have become more concentrated

In sum, inflation isn’t driving most of these price increases. Corporate power is driving them.

Since the 1980s, when the US government all but abandoned antitrust enforcement, two-thirds of all American industries have become more concentrated.

Monsanto now sets the prices for most of the nation’s seed corn.

The government green-lighted Wall Street’s consolidation into five giant banks, of which JP Morgan is the largest.

Airlines have merged from 12 in 1980 to four today, which now control 80% of domestic seating capacity.

Boeing and McDonnell Douglas have merged, leaving the US with just one large producer of civilian aircraft: Boeing.

Three giant cable companies dominate broadband: Comcast, AT&T and Verizon.

A handful of drug companies control the pharmaceutical industry: Pfizer, Eli Lilly, Johnson & Johnson, Bristol-Myers Squibb and Merck.

All this spells corporate power to raise prices.

So what’s the appropriate response to the latest round of inflation?

The Federal Reserve has signaled it won’t raise interest rates for the time being, believing that the inflation is being driven by temporary supply bottlenecks.

Meanwhile, Biden administration officials have been consulting with the oil industry in an effort to stem rising gas prices, trying to make it simpler to issue commercial driver’s licenses (to help reduce the shortage of truck drivers), and seeking to unclog overcrowded container ports.

But none of this responds to the deeper structural issue – of which price inflation is a symptom: the increasing consolidation of the economy in a relative handful of big corporations with enough power to raise prices and increase profits.

This structural problem is amenable to only one thing: the aggressive use of antitrust law.

These are the Companies that received the benefit of the 2017 tax breaks that never reached the average taxpayers as promised by TOTUS MA

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The ongoing resistance to voting freedom by GOP governed states and the minority Senate is at once a precursor and retro reminder of the actions under the GOP’s effort to reduce voter participation in our most valued and important activity as a nation. This has been the GOP’s actions since the 1800’s (which was one part of the Civil War reasons to fight our fellow Americans). This is all about power and the ability to create laws that disenfranchise all of us while promoting the well being of the top earners who control 99% of the U.S.’s wealth and pay little to no taxes. If you are being taken in by the rhetoric surrounding this budget fight then you are missing the real issues. The public face of these legislative fights are a cover for the real context which is to control the government by limiting access to voting, installing legal authorities that favor the GOP’s lines of thought. In short the GOP will take us back 100 years when there no middle class and those aspirations for a better life were no more than a pipe dream. The GOP was responsible for the marihuana ban, the “red” scare by Joe McCarthy in the 50’s, the rise of right wing religious sects (who sought (and are still at it) controlling the health rights of women under the guise of saving the unborn. To be clear I have no particular stand on abortion but I have a concern over potential orphans and abused children as a result of unwanted births. The effect of allowing the GOP to prevail could be an America that is good for the minority not the majority or the haves and the have nots. We are within arm reach of a “TOTUS” imagined country where we can be lied to in the face of facts and be expected to believe what we are told. We have to examine closely the actions of ALL politicians and understand which parts of their actions actually work for us or against us and speak out, there is no other way.

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Compare 1929 to 2020 (consider the Pandemic as the 1929 losses with the body count being much higher under TOTUS’s hand) MA

Heather Cox RichardsonOct 29

In 1929, October 28 was a Monday, the opening night for New York’s Metropolitan Opera. 

Four thousand glittering attendees thronged to the elegant building on foot or in one of a thousand limousines to see Puccini’s Manon Lescaut, the melodramatic story of an innocent French girl seduced by wealth, whose reluctance to leave her riches for true love leads to her arrest, deportation to the wilds of America, and tragic death. Flash bulbs blinded the crowd, gathered to see famous faces and expensive gowns, as photographers recorded the arrivals of the era’s social celebrities. 

No one toasting the beginning of the opera season that night knew they were toasting the end of an era.

At ten o’clock the next morning, when the opening gong sounded in the great hall of the New York Stock Exchange, men began to unload their stocks. So fast did trading go that by the end of the day, the ticker recording transactions ran two and a half hours late. When the final tally could be read, it showed that an extraordinary 16,410,030 shares had traded hands, and the market had lost $14 billion. The market had been uneasy for weeks before the twenty-ninth, but Black Tuesday began a slide that seemingly would not end. By mid-November, the industrial average was half of what it had been in September. The economic boom that had fueled the Roaring Twenties was over.

Once the bottom fell out of the stock market, the economy ground down. Manufacturing output dropped to levels lower than those of 1913. The production of pig iron fell to what it had been in the 1890s. Foreign trade dropped by $7 billion, down to just $3 billion. The price of wheat fell from $1.05 a bushel to 39 cents; corn dropped from 81 to 33 cents; cotton fell from 17 to 6 cents a pound. Prices dropped so low that selling crops meant taking a loss, so struggling farmers simply let them rot in the fields. By 1932, over one million people in New York City were unemployed. By 1933, the number of unemployed across the nation rose to 13 million people—one out of every four American workers. Unable to afford rent or pay mortgages, people lived in shelters made of packing boxes.

No one knew how to combat the Great Depression, but wealthy Americans were sure they knew what had caused it. The problem, they said, was that poor Americans refused to work hard enough and were draining the economy. They must be forced to take less. “Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate,” Treasury Secretary Andrew Mellon told President Herbert Hoover. “It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up the wrecks from less competent people.” 

Slash government spending, agreed the Chicago Tribune: lay off teachers and government workers, and demand that those who remain accept lower wages. Richard Whitney, a former president of the Stock Exchange, told the Senate that the only way to restart the economy was to cut government salaries and veterans’ benefits (although he told them that his own salary—which at sixty thousand dollars was six times higher than theirs—was “very little” and couldn’t be reduced).

President Hoover knew little about finances, let alone how to fix an economic crisis of global proportions. He tried to reverse the economic slide by cutting taxes and reassuring Americans that “the fundamental business of the country, that is, production and distribution of commodities, is on a sound and prosperous basis.” But taxes were already so low that most folks would see only a few extra dollars a year from the cuts, and the fundamental business of the country was not, in fact, sound. When suffering Americans begged for public works programs to provide jobs, Hoover insisted that such programs were a “soak the rich” program that would “enslave” taxpayers, and called instead for private charity.

By the time Hoover’s first term limped to a close, Americans were ready to try a new approach to economic recovery. They refused to reelect Hoover and turned instead to New York Governor Franklin Delano Roosevelt, who promised to use the federal government to provide jobs and a safety net to enable Americans to weather hard times. He promised a “New Deal” for the American people.

FDR’s New Deal employed more than 8.5 million people, built more than 650,000 miles of highways, built or repaired more than 120,000 bridges, and put up more than 125,000 public buildings. It provided a social safety net for ordinary Americans, providing unemployment and disability insurance, as well as aid to widows, orphans, and the elderly. It supported labor and regulated business, banking, and the stock market. It invested in infrastructure, rebuilding roads and bridges, providing electricity to rural areas, and building schools, post offices, airports, and hospitals around the country. When World War II broke out, the new system enabled the United States to defend democracy successfully against fascists.

The new system undercut fascism at home, too, where its adherents had been growing strong, and reminded Americans that when the government supported ordinary people, they could build a strong new future.

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November 8, 2021Heather Cox Richardson Nov 9

The big news of the day is the Biden administration’s ongoing efforts to combat international terrorism and lawlessness through cybersecurity and international cooperation. Today the Department of Justice, the State Department, and the Treasury Department together announced indictments against two foreign actors for cyberattacks on U.S. companies last August. They announced sanctions against the men, one of whom has been arrested in Poland; they seized $6.1 million in assets from the other. The State Department has offered a $10 million reward for information about other cybercriminals associated with the attack. Treasury noted that ransomware attacks cost the U.S. almost $600 million in the first six months of 2021, and disrupt business and public safety.  The U.S. has also sent Special Envoy Jeffrey Feltman to Ethiopia and neighboring Kenya to urge an end to the deadly civil war in Ethiopia, where rebel forces are close to toppling the government. A horrific humanitarian crisis is in the making there. The U.S. is interested in stopping the fighting not only because of that, but also because the Ethiopian government has lately tended to stabilize the fragile Somali government. Without that stabilization, Somalia could become a haven for terrorists, and terrorists could extort the global shipping industry.  Meanwhile, it appears that Biden’s big win on Friday, marshaling a bipartisan infrastructure bill through Congress, has made Republicans almost frantic to win back the national narrative. The National Republican Congressional Committee has released an early ad for the 2022 midterm elections titled “Chaos,” which features images of the protests from Trump’s term and falsely suggests they are scenes from Biden’s America. As Senator Ted Cruz (R-TX) and other Republican leaders today attacked the popular Sesame Street character Big Bird today for backing vaccinations—Big Bird has publicly supported vaccines since 1972—they revealed how fully they have become the party of Trump.Excerpts from a new book by ABC News chief Washington correspondent Jonathan Karl say that Trump was so mad that the party did not fight harder to keep him in office that on January 20, just after he boarded Air Force One to leave Washington, he took a phone call from Ronna McDaniel, the chair of the Republican National Committee, and told her that he was quitting the Republicans to start his own political party.McDaniel told him that if he did that, the Republicans “would lose forever.” Trump responded: “Exactly.” A witness said he wanted to punish the officials for their refusal to fight harder to overturn the election.Four days later, Trump relented after the RNC made it clear it would stop paying his legal bills and would stop letting him rent out the email list of his 40 million supporters, a list officials believed was worth about $100 million.Instead of leaving the party, he is rebuilding it in his own image. In Florida, Trump loyalist Roger Stone is threatening to run against Governor Ron DeSantis in 2022 to siphon votes from his reelection bid unless DeSantis promises he won’t challenge Trump for the Republican nomination in 202Washington Post by Michael Kranish today explored how, over the course of his career, Senate Minority Leader Mitch McConnell (R-KY) has singlemindedly pursued power, switching his stated principles to their opposites whenever it helped his climb to the top of the Senate. Eventually, in the hope of keeping power, he embraced Trump, even acquitting him for his role in inciting the January 6 insurrection. The former president is endorsing primary candidates to oust Republicans he thinks were insufficiently loyal. In Georgia, he has backed Herschel Walker, whose ex-wife got a protective order against him after he allegedly threatened to shoot her. In Pennsylvania, Trump has endorsed Sean Parnell, whose wife testified that he choked her and abused their children physically and emotionally. Although such picks could hurt the Republicans in a general election with the women they desperately need to attract (hence the focus on schools), the chair of the National Republican Senatorial Committee, Rick Scott (R-FL), did not feel comfortable today bucking Trump to comment on whether Parnell was the right candidate to back. Scott said he would focus on whoever won the primary. The cost of the party’s link to Trumpism is not just potential 2022 voters. In the New York Times today, David Leonhardt outlined how deaths from the novel coronavirus did not reflect politics until after the Republicans made the vaccines political. A death gap between Democrats and Republicans emerged quickly as Republicans shunned the vaccine.Now, only about 10% of Democrats eligible for the vaccine have refused it, while almost 40% of Republicans have. In October, while about 7.8 people per 100,000 died in counties that voted strongly for Biden, 25 out of every 100,000 died in counties that went the other way. Leonhardt held out hope that both numbers would drop as more people develop immunities and as new antiviral drugs lower death rates everywhere. And yet, Republicans continue to insist they are attacking the dangerous Democrats. Quite literally. Representative Paul Gosar (R-AZ), who has ties to white supremacists and who has been implicated in the January 6 attack, yesterday posted an anime video in which his face was photoshopped onto a character that killed another character bearing the face of New York Democratic Representative Alexandria Ocasio-Cortez. The Gosar character also swung swords at a Biden character and fought alongside Representatives Marjorie Taylor Greene (R-GA) and Lauren Boebert (R-CO). In response to the outcry about the video, Gosar’s digital director, Jessica Lycos, said: “Everyone needs to relax.” The House Select Committee to Investigate the January 6th Attack on the U.S. Capitol is not relaxing. Today it issued six new subpoenas. The subpoenas went to people associated with the “war room” in the Willard Hotel in the days leading up to the events of January 6. The subpoenas went to William Stepien, the manager of Trump’s 2020 campaign which, as an entity, asked states not to certify the results of the election; Trump advisor Jason Miller, who talked of a stolen election even before the election itself; Angela McCallum, an executive assistant to Trump’s 2020 campaign, who apparently left a voicemail for a Michigan state representative pressuring the representative to appoint an alternative slate of electors because of “election fraud”; and Bernard Kerik, former New York City police commissioner, who paid for the hotel rooms in which the plotting occurred.Another subpoena went to Michael Flynn, who called for Trump to declare martial law and “rerun” the election, and who attended a December 18, 2020, meeting in the Oval Office “during which participants discussed seizing voting machines, declaring a national emergency, invoking certain national security emergency powers, and continuing to spread the false message that the November 2020 election had been tainted by widespread fraud.” The sixth subpoena went to John Eastman, author of the Eastman memo saying that then–vice president Mike Pence could reject the certified electors from certain states, thus throwing the election to Trump. Eastman was apparently at the Willard Hotel for a key meeting on January 5, and he spoke at the rally on the Ellipse on January 6. None of these people are covered by executive privilege, even if Trump tries to exercise it. The 2022 midterm elections, scheduled for November 8, 2022, are exactly a year away.—

Notes:https://january6th.house.gov/news/press-releases/select-committee-subpoenas-additional-witnesses-tied-efforts-overturn-electionhttps://www.nytimes.com/2021/11/08/briefing/covid-death-toll-red-america.htmlhttps://www.washingtonpost.com/politics/2021/11/08/mitch-mcconnell-trump-impeachment-insurrection-senate/https://abcnews.go.com/US/trump-told-rnc-chair-leaving-gop-create-party/story?id=80979889https://www.npr.org/2021/11/08/1053548074/big-bird-covid-19-vaccine-conservative-backlash-ted-cruzhttps://talkingpointsmemo.com/news/nrsc-chair-scott-condemn-parnell-domestic-abusehttps://www.npr.org/2021/11/07/1051940127/rebels-are-closing-in-on-ethiopias-capital-its-collapse-could-bring-regional-chahttps://www.state.gov/visit-of-special-envoy-for-the-horn-of-africa-feltman-to-ethiopia-and-kenya/https://www.cnn.com/2021/11/08/politics/fact-check-house-republican-ad-trump-images-2020/index.htmlhttps://www.justice.gov/opa/pr/ukrainian-arrested-and-charged-ransomware-attack-kaseyahttps://www.state.gov/reward-offers-for-information-to-bring-sodinokibi-revil-ransomware-variant-co-conspirators-to-justice/https://home.treasury.gov/news/press-releases/jy0471https://thehill.com/homenews/senate/580351-senate-gop-worries-trump-could-derail-bid-for-majorityhttps://www.businessinsider.com/roger-stone-run-governor-desantis-pledges-not-to-run-president-2021-11https://www.azcentral.com/story/opinion/op-ed/ej-montini/2021/01/10/reps-andy-biggs-paul-gosar-implicated-capitol-insurrection/6614177002/https://www.washingtonpost.com/politics/republicans-gosar-trump-ocasio-cortez/2021/11/08/ead37b36-40ca-11ec-9ea7-3eb2406a2e24_story.html
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November 8, 2021 Heather Cox Richardson Nov 9

  The big news of the day is the Biden administration’s ongoing efforts to combat international terrorism and lawlessness through cybersecurity and international cooperation.  Today the Department of Justice, the State Department, and the Treasury Department together announced indictments against two foreign actors for cyberattacks on U.S. companies last August. They announced sanctions against the men, one of whom has been arrested in Poland; they seized $6.1 million in assets from the other. The State Department has offered a $10 million reward for information about other cybercriminals associated with the attack. Treasury noted that ransomware attacks cost the U.S. almost $600 million in the first six months of 2021, and disrupt business and public safety.   The U.S. has also sent Special Envoy Jeffrey Feltman to Ethiopia and neighboring Kenya to urge an end to the deadly civil war in Ethiopia, where rebel forces are close to toppling the government. A horrific humanitarian crisis is in the making there. The U.S. is interested in stopping the fighting not only because of that, but also because the Ethiopian government has lately tended to stabilize the fragile Somali government. Without that stabilization, Somalia could become a haven for terrorists, and terrorists could extort the global shipping industry.   Meanwhile, it appears that Biden’s big win on Friday, marshaling a bipartisan infrastructure bill through Congress, has made Republicans almost frantic to win back the national narrative. The National Republican Congressional Committee has released an early ad for the 2022 midterm elections titled “Chaos,” which features images of the protests from Trump’s term and falsely suggests they are scenes from Biden’s America.  As Senator Ted Cruz (R-TX) and other Republican leaders today attacked the popular Sesame Street character Big Bird today for backing vaccinations—Big Bird has publicly supported vaccines since 1972—they revealed how fully they have become the party of Trump. Excerpts from a new book by ABC News chief Washington correspondent Jonathan Karl say that Trump was so mad that the party did not fight harder to keep him in office that on January 20, just after he boarded Air Force One to leave Washington, he took a phone call from Ronna McDaniel, the chair of the Republican National Committee, and told her that he was quitting the Republicans to start his own political party. McDaniel told him that if he did that, the Republicans “would lose forever.” Trump responded: “Exactly.” A witness said he wanted to punish the officials for their refusal to fight harder to overturn the election. Four days later, Trump relented after the RNC made it clear it would stop paying his legal bills and would stop letting him rent out the email list of his 40 million supporters, a list officials believed was worth about $100 million. Instead of leaving the party, he is rebuilding it in his own image.  In Florida, Trump loyalist Roger Stone is threatening to run against Governor Ron DeSantis in 2022 to siphon votes from his reelection bid unless DeSantis promises he won’t challenge Trump for the Republican nomination in 2024.   A long piece in the Washington Post by Michael Kranish today explored how, over the course of his career, Senate Minority Leader Mitch McConnell (R-KY) has singlemindedly pursued power, switching his stated principles to their opposites whenever it helped his climb to the top of the Senate. Eventually, in the hope of keeping power, he embraced Trump, even acquitting him for his role in inciting the January 6 insurrection.  The former president is endorsing primary candidates to oust Republicans he thinks were insufficiently loyal. In Georgia, he has backed Herschel Walker, whose ex-wife got a protective order against him after he allegedly threatened to shoot her. In Pennsylvania, Trump has endorsed Sean Parnell, whose wife testified that he choked her and abused their children physically and emotionally.  Although such picks could hurt the Republicans in a general election with the women they desperately need to attract (hence the focus on schools), the chair of the National Republican Senatorial Committee, Rick Scott (R-FL), did not feel comfortable today bucking Trump to comment on whether Parnell was the right candidate to back. Scott said he would focus on whoever won the primary.  The cost of the party’s link to Trumpism is not just potential 2022 voters. In the New York Times today, David Leonhardt outlined how deaths from the novel coronavirus did not reflect politics until after the Republicans made the vaccines political. A death gap between Democrats and Republicans emerged quickly as Republicans shunned the vaccine. Now, only about 10% of Democrats eligible for the vaccine have refused it, while almost 40% of Republicans have. In October, while about 7.8 people per 100,000 died in counties that voted strongly for Biden, 25 out of every 100,000 died in counties that went the other way. Leonhardt held out hope that both numbers would drop as more people develop immunities and as new antiviral drugs lower death rates everywhere.  And yet, Republicans continue to insist they are attacking the dangerous Democrats. Quite literally. Representative Paul Gosar (R-AZ), who has ties to white supremacists and who has been implicated in the January 6 attack, yesterday posted an anime video in which his face was photoshopped onto a character that killed another character bearing the face of New York Democratic Representative Alexandria Ocasio-Cortez. The Gosar character also swung swords at a Biden character and fought alongside Representatives Marjorie Taylor Greene (R-GA) and Lauren Boebert (R-CO).  In response to the outcry about the video, Gosar’s digital director, Jessica Lycos, said: “Everyone needs to relax.”  The House Select Committee to Investigate the January 6th Attack on the U.S. Capitol is not relaxing. Today it issued six new subpoenas. The subpoenas went to people associated with the “war room” in the Willard Hotel in the days leading up to the events of January 6.  The subpoenas went to William Stepien, the manager of Trump’s 2020 campaign which, as an entity, asked states not to certify the results of the election; Trump advisor Jason Miller, who talked of a stolen election even before the election itself; Angela McCallum, an executive assistant to Trump’s 2020 campaign, who apparently left a voicemail for a Michigan state representative pressuring the representative to appoint an alternative slate of electors because of “election fraud”; and Bernard Kerik, former New York City police commissioner, who paid for the hotel rooms in which the plotting occurred. Another subpoena went to Michael Flynn, who called for Trump to declare martial law and “rerun” the election, and who attended a December 18, 2020, meeting in the Oval Office “during which participants discussed seizing voting machines, declaring a national emergency, invoking certain national security emergency powers, and continuing to spread the false message that the November 2020 election had been tainted by widespread fraud.”  The sixth subpoena went to John Eastman, author of the Eastman memo saying that then–vice president Mike Pence could reject the certified electors from certain states, thus throwing the election to Trump. Eastman was apparently at the Willard Hotel for a key meeting on January 5, and he spoke at the rally on the Ellipse on January 6.  None of these people are covered by executive privilege, even if Trump tries to exercise it.  The 2022 midterm elections, scheduled for November 8, 2022, are exactly a year away. — Notes:

https://january6th.house.gov/news/press-releases/select-committee-subpoenas-additional-witnesses-tied-efforts-overturn-election https://www.nytimes.com/2021/11/08/briefing/covid-death-toll-red-america.html https://www.washingtonpost.com/politics/2021/11/08/mitch-mcconnell-trump-impeachment-insurrection-senate/ https://abcnews.go.com/US/trump-told-rnc-chair-leaving-gop-create-party/story?id=80979889 https://www.npr.org/2021/11/08/1053548074/big-bird-covid-19-vaccine-conservative-backlash-ted-cruz https://talkingpointsmemo.com/news/nrsc-chair-scott-condemn-parnell-domestic-abuse https://www.npr.org/2021/11/07/1051940127/rebels-are-closing-in-on-ethiopias-capital-its-collapse-could-bring-regional-cha https://www.state.gov/visit-of-special-envoy-for-the-horn-of-africa-feltman-to-ethiopia-and-kenya/ https://www.cnn.com/2021/11/08/politics/fact-check-house-republican-ad-trump-images-2020/index.html https://www.justice.gov/opa/pr/ukrainian-arrested-and-charged-ransomware-attack-kaseya https://www.state.gov/reward-offers-for-information-to-bring-sodinokibi-revil-ransomware-variant-co-conspirators-to-justice/ https://home.treasury.gov/news/press-releases/jy0471 https://thehill.com/homenews/senate/580351-senate-gop-worries-trump-could-derail-bid-for-majority https://www.businessinsider.com/roger-stone-run-governor-desantis-pledges-not-to-run-president-2021-11 https://www.azcentral.com/story/opinion/op-ed/ej-montini/2021/01/10/reps-andy-biggs-paul-gosar-implicated-capitol-insurrection/6614177002/ https://www.washingtonpost.com/politics/republicans-gosar-trump-ocasio-cortez/2021/11/08/ead37b36-40ca-11ec-9ea7-3eb2406a2e24_story.html Share
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FEBRUARY 14, 2020

William G. Gale

The Vitals

Before and after passage of the Tax Cuts and Jobs Act (TCJA), several prominent conservatives, including Republicans in the House and Senate, former Reagan economist Art Laffer, and members of the Trump administration, claimed that the act would either increase revenues or at least pay for itself. In principle, a tax cut could “pay for itself” if it spurred substantial economic growth—if tax revenues rose from the combination of higher wages and hours worked, greater investment returns, and larger corporate profits. The TCJA, however, is not that tax cut.

  • The actual amount of tax revenue collected in FY2018 was significantly lower than the CBO’s projection made in January 2017—before the tax cut was signed into law.
  • Given that the economy grew in 2018, and in the absence of another policy that could have caused a large revenue loss, the data imply that the 2017 tax cut substantially reduced revenues.
  • The 2017 tax cut reduced the top corporate tax rate from 35 percent to 21 percent—a 40 percent reduction. It also reduced income taxes for most Americans.

A Closer Look

Did the TCJA spur enough growth to maintain federal revenue levels?

While some TCJA supporters observe that nominal revenues were higher in fiscal year 2018 (which began Oct. 1, 2017) than in FY2017, that comparison does not address the question of the TCJA’s effects. Nominal revenues rise because of inflation and economic growth. Adjusted for inflation, total revenues fell from FY2017 to FY2018 (Figure 1). Adjusted for the size of the economy, they fell even more.

The right question: What would revenues have been without the TCJA?

The most appropriate test of the revenue impact of the TCJA is to compare actual revenues in FY2018 with predicted revenues in FY2018 assuming Congress had not passed the legislation. In fact, the actual amount of revenue collected in FY2018 was significantly lower than the Congressional Budget Office’s (CBO) projection of FY2018 revenue made in January 2017—before the tax cuts were signed into law in December 2017. The shortfall was $275 billion, or 7.6% of revenues that were expected before the tax cuts took place. Given that the economy grew, and in the absence of another policy that could have caused a large revenue loss, the data imply that the TCJA substantially reduced revenues (Figure 1).

What does the composition of the revenue shortfalls tell us about the effect of the TCJA?

The TCJA’s changes mostly affected the corporate and individual income taxes (Figure 2). The act reduced the top corporate tax rate from 35% to 21%—a 40% reduction. Actual corporate income tax revenue in FY2018 was $135 billion lower than CBO’s projection from 2017—almost exactly a 40% decline. The most recent CBO projections estimate further decreases in corporate tax revenue. The TCJA also reduced income taxes for most Americans, which led to a decline in revenues relative to prior projections. For individual VoterVitals_Gale_TaxCuts_Figure1income taxes, actual collections in FY2018 were $97 billion, or 5.4%, below pre-TCJA projections.

These effects are accentuated if one looks at taxes as a share of GDP (Table 1). In 2017, before the tax cuts were considered, the CBO estimated that total revenues would be 18.1% of GDP in FY2018. With the TCJA, revenues were only 16.4% of GDP. Similar patterns hold for individual income taxes and (in more extreme form) for corporate income taxes. Due to data limitations, the revenue numbers in Table 1 are on a fiscal year (October 2017–September 2018) basis. As a result, 2018 data include the three months prior to the act’s enactment. If the values were instead on a calendar year basis so that 2018 only included post-TCJA revenues, the revenue declines would be even larger.

Are the differences between projected and actual revenues really caused by the TCJA?

These shortfalls can’t be attributed to errors in the CBO’s pre-TCJA forecast. To illustrate this, it makes sense to look at projected and actual payroll tax revenues, because the TCJA did not directly affect payroll taxes. In fact, payroll taxes fell only slightly—1.7%—from pre-TCJA projected values (Figure 2). This provides baseline credibility that reinforces the declines in other revenues.

Were the TCJA’s revenue effects anticipated?

None of these findings should be surprising. Almost every major analysis of the legislation correctly predicted that revenues would fall in 2018 relative to a scenario without the tax cuts, with sources ranging from government entities such as the CBO and the Joint Committee on Taxation, to non-governmental think tanks such as the Urban-Brookings Tax Policy Center and the Tax Foundation, VoterVitals_Gale_TaxCuts_Tableacademic researchers in studies by Robert Barro and Jason Furman, and in analyses using the Penn-Wharton Budget Model.

Could the revenue shortfalls be a temporary result of sudden policy change?

For those who might argue to “wait and see” what has happened in 2019, the findings from the studies cited above offer little hope. On average, these models estimated that economic growth effects (the “dynamic effects”) will only offset about a quarter of the 10-year revenue loss associated with the TCJA. Excluding the Tax Foundation, which is an outlier in these estimates, drops the average VoterVitals_Gale_TaxCuts_Figure2offset to less than 20%.

So did the TCJA pay for itself?

The TCJA did not pay for itself, nor is it likely to do so in the future. There are many debates to have about the TCJA, but whether it raised or reduced revenues in 2018 should not be one of them.

I thank Grace Enda and Claire Haldeman for outstanding research assistance.

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November 6, 2021Heather Cox Richardson

As soon as the Democrats in the House of Representatives, marshaled by House Speaker Nancy Pelosi (D-CA), passed the $1.2 trillion Infrastructure Investment and Jobs Act (H.R. 3684) by a bipartisan vote of 228–206 last night, Republicans began to say that the Democrats were ushering in “socialism.”When Republicans warn of socialism, they are not talking about actual socialism, which is an economic system in which the means of production, that is, the factories and industries, are owned by the people. In practical terms, that means they are owned by the government.True socialism has never been popular in America, and virtually no one is talking about it here today. The best it has ever done in a national election was in 1912, when labor organizer Eugene V. Debs, running for president as a Socialist, won a whopping 6% of the vote, coming in behind Woodrow Wilson, Theodore Roosevelt, and William Howard Taft. True socialism isn’t a real threat in America.What politicians mean when they cry “socialism” in America today is something entirely different. It is a product of the years immediately after the Civil War, when Black men first got the right to vote.Eager to join the free labor system from which they had previously been excluded, these men joined poor white men to vote for leaders who promised to rebuild the South, provide schools and hospitals (as well as desperately needed prosthetics for veterans), and develop the economy with railroads to provide an equal opportunity for all men to work hard and rise.Former Confederates loathed the idea of Black men voting. But their opposition to Black voting on racial grounds ran headlong into the Fifteenth Amendment to the Constitution, which, after it was ratified in 1870, gave the U.S. government the power to make sure that no state denied any man the right to vote “on account of race, color, or previous condition of servitude.” When white former Confederates nonetheless tried to force their Black neighbors from the polls, Congress in 1870 created the Department of Justice, which began to prosecute the Ku Klux Klan members who had been terrorizing the South.With racial discrimination now prohibited by the federal government, elite white southerners changed their approach. They insisted that they objected to Black voting not on racial grounds, but because Black men were voting for programs that redistributed wealth from hardworking white people to Black people, since hospitals and roads would cost tax dollars and white people were the only ones with taxable property in the Reconstruction South. Poor Black voters were instituting, one popular magazine wrote, “Socialism in South Carolina.”This idea that it was dangerous for poor working men to have a say in the government caught on in the North as immigrants moved into growing cities to work in the new factories. Like their counterparts in the South, they voted for roads and schools, and northern men of wealth too insisted these programs meant a redistribution of wealth through tax dollars.They got more concerned still when a majority of Americans began to call for regulation to keep businessmen from gouging consumers, polluting the environment, and poisoning the food supply (milk was preserved with formaldehyde, and candy was often painted with lead paint). Wealthy men argued that any attempt to regulate business would impinge on a man’s liberty, while an army of bureaucrats to enforce regulations would cost tax dollars and thus would mean a redistribution of wealth from men of means to the poor who would benefit from the regulations.Long before the Bolshevik Revolution in Russia brought the fears of a workers’ government to life, Americans who opposed regulation insisted that their economy was under siege by socialists. That conviction did indeed lead to a redistribution of wealth, but as regular Americans were kept from voting, it went dramatically upward, not down.Regulation of business and promotion of infrastructure is not, in fact, the international socialism today’s Republicans claim. According to Abraham Lincoln, who first articulated the principles of the Republican Party, and under whom the party invented the American income tax, the “legitimate object of government, is to do for a community of people, whatever they need to have done, but can not do, at all, or can not, so well do, for themselves—in their separate, and individual capacities.” Those things included, he wrote, “public roads and highways, public schools, charities, pauperism, orphanage, estates of the deceased, and the machinery of government itself.”

Notes:Abraham Lincoln, Fragment on Government, [July 1, 1854?], in Roy P. Basler, ed., Collected Works of Abraham Lincoln (New Brunswick, N.J.: Rutgers University Press, 1953), volume 2, p. 220.
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