Shortly after the election, then-Treasury Secretary nominee Steven Mnuchin appeared on CNBC and declared that under Donald Trump’s tax plan “there will be no absolute tax cut for the upper class.” Instead, Mnuchin claimed, the administration’s plan would be all about a “middle-income tax cut” and “any reductions in upper-income taxes will be offset by less deductions,” so that in the end, the wealthy would basically come out even. Then in April, Mnuchin and fellow Goldman Sachs alum Gary Cohn unveiled Team Trump’s actual tax plan: a hastily slapped-together, one-page outline that might as well have said, “You're Welcome, Rich People.”
Sure, it called for the elimination of many federal deductions, but it also brought the top tax rate down to 35 percent, eliminated the inheritance tax (which is all about helping American farmers, Cohn claimed, and not certain heirs and heiresses looking to save a billion when their father kicks it), and slashed the corporate tax rate from 35 percent to 15 percent. Getting rid of deductions, many say, “wouldn’t be enough to offset the benefits wealthy Americans would receive“ from the plan. In his heart, Mnuchin must know this, just like he must know that saying you support a “21st-century Glass-Steagall” that doesn’t separate commercial banking from investment banking is not supporting Glass-Steagall. He can’t come out and say it, of course, but even a man who seemingly has a bottomless appetite for peddling B.S. has his limits. So while he’s not yet at the point of stating plainly that Trump’s plan is designed to benefit people like Trump, he is distancing himself from his transition-period promise. Per U.S. News:
And if it comes out that instead of “no absolute tax cut for the upper class” the bill provides an absolutely massive, multitrillion-dollar boost to the upper class, blame it on Congress! President Trump, for one, would never even dream about passing such thing, though if it comes across his desk, far be it for him not to sign it.
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Trump’s budget long on cruelty, short on math
The Trump administration released its 2018 fiscal budget plan Tuesday and although it’s already “been declared dead on arrival by many of his Republican allies in Congress,” just for yuks, let’s take a peek at what it entails.
For starters, there are the ample middle fingers to the people who voted for him, including another $610 billion cut to Medicaid, $193 billion from food stamps, and $72 billion from a Social Security program that “provide[s] cash benefits for the poor and disabled.” As Bloomberg notes, “states that Trump carried in the presidential election are high on the list of those that spent the most federal money for Medicaid in 2016,” while “among the top 25 states for proportion of households receiving food stamps, Trump won 16 of them.”
Naturally, the plan also flips off the environment and climate-change believers, with the budget for the Environmental Protection Agency being slashed by 31.4 percent. The plan specifically calls for “eliminating funding to every program to deal with global warming, including the Clean Power Plan.” The budget for the Department of Education, run by a woman who has seemingly never set foot in a public school, would be cut by $9 billion. Subsidies to farmers would be sharply curtailed; the National Institute of Health‘s budget would be slashed from $31.8 billion to $26 billion; and the Centers for Disease Control would lose $1.2 billion in funding.
Beyond its obvious callousness, the White House budget proposal also stands for its brazen use of accounting tricks to make its math add up. In its plan, the administration claims that massive tax cuts will pay for themselves by generating some $2 trillion in additional economic growth—a dubious assertion to start with, according to most economists—and then claims that same $2 trillion can also be used to balance the budget in 10 years. As a number of commentators quickly pointed out, the White House used the same magic $2 trillion in trickle-down fairy dust twice.
And that’s not all: according to Bloomberg, the budget also “assumes that the wars in Afghanistan and the Middle East will cause future Congresses to allocate $593 billion in extra war funding that won’t be needed and then claims to save that amount by not spending it.” Who says accountants can’t have fun?
Rule protecting retirees that Trump wanted to kill will live to see another day
Back in February, in one of his first official acts as president, Donald Trump signed an executive order intended to roll back the fiduciary rule. An evil scheme cooked up by Barack Obama, the rule would require retirement advisers to “act in the best interest of their clients,” and was once likened to the Dred Scott decision (that’s right, the one about slavery) by erstwhile Trump adviser Anthony Scaramucci. In explaining the administration’s rationale for why it had to die, top economic adviser Gary Cohn argued that it’s akin to telling people they can’t have unhealthy food because they “might die younger,” a choice people should be able to make for themselves. If they want to go broke, that‘s their business! But in an act that may or may not get him fired, Labor Department Secretary Alexander Acosta “surprised many in the brokerage and insurance industries,” who felt similarly to the president on the matter of the fiduciary rule, “by not recommending a delay in the rule beyond June 9,” meaning insurance agents and brokers will need to be “partially compliant“ by that date and fully compliant by January 1.
Acosta wrote that while the Labor Department concluded “that it is necessary to seek additional public input on the entire Fiduciary Rule,” instead of complete delay, as people like Trump have advocated, “respect for the rule of law leads us to the conclusion that this date cannot be postponed.”
About those Carrier jobs
Remember, back in November, when Donald Trump took to Twitter to crow about all the Carrier plant jobs he’d saved from being outsourced? Something tells us he won’t have anything to say about this, per the Associated Press:
Elsewhere!
Trump’s entire budget is based on a $2 trillion accounting trick (The Hive)
Many lawmakers rejected Trump’s budget proposal before it was formally released (NBC)
Madoff Fund Paid Millions to Breeden Firm, Zero to Victims (Bloomberg)
‘Buy the Dip’ Is Becoming a Pavlovian Reflex (W.S.J.)
Jeff Bezos wants to colonize the moon (N.Y.P.)
The Case That Could Doom Elizabeth Warren’s Wall Street Watchdog (Bloomberg)
Brazilian Meatpacker JBS’s Shares Fall 30% Amid Insider-Trading Accusations (W.S.J.)
Government enforcers take aim at compliance officers (Financial Times)
What does Mark Zuckerberg really want? (The Hive)
“Every job has its unique challenges. Coping with bad smells is not one you expect.” (W.S.J.)
