Way too many struggling, tax bill isn’t helping, & a letter from Alex Castellanos….
Today’s commentary in part 3 which always has a focus on the economy, I’ll rely more on other’s opinions, including posting excerpts from articles & an email I just received from GOP strategist Alex Castellanos. He also has an article at the bottom of the Related Articles, which has a whole section of links on the GOP’s dim election prospects, so let’s jump right into this week’s political updates.
They claim the economy is strong. At least that’s what we keep hearing from politicians & the media. But how is that possible when a majority of American families are struggling financially? These excerpts come from financial-stress-higher-l
Despite an improving economy that should be easing the financial struggles of all Americans, a growing number of low- and middle-income households are plagued by high debt and have little or no savings. The financial strains have especially worsened for those near the bottom of the income ladder. While wages for low- and middle-income Americans are rising, they’re not keeping up with higher costs, like rent and utilities. About 76 million U.S. households make up the bottom 60% of income earners, with take-home pay of $65,000 or less. Of that group, about a third were “stressed” in 2016, UBS says, near the highest level since the mid-1990s. UBS defines ‘stressed’ Americans as those whose financial obligations — such as mortgages, rent, auto loans and leases, and credit card bills — exceed 30% of their income and who don’t have enough cash and other assets to pay their bills for six months in the event of a layoff or other shock. Such people are far more likely to eventually fall behind on loans and rein in spending. Even more troubling: About 25 million low-income households that earn $23,000 or less face growing burdens, with nearly half of that bottom 20% of income earners stressed in 2016, up from 45% in 2013, UBS figures show.
Yes, the GOP pushed through a tax bill that was ill-conceived based on old trickle-down dogma, not modern realities. And isn’t that the lone piece of major legislation the party passed & the prez keeps bragging about? These excerpts from millionaire-zero-jobs-tax
Our elected officials may speak eloquently about the nobility of labor and the value of a hard day’s work, but money talks louder, and our tax code is deliberately designed to reward money over work. Here’s how: our tax code has two different rates for two distinct types of earnings: “ordinary” income and “capital gains” income. Most of the ultra–rich make the vast majority of their money through capital gains, not income. They don’t work in the way most Americans work, because they live off of their investments. And it’s a lucrative path, because the top capital gains rate is barely over half of that paid for ordinary income. We should be implementing policies that grow the middle class and help bring people up out of poverty. That means a billionaire whose investments earn him millions of dollars while he sits around at the beach and goes to fancy cocktail parties pays a lower tax rate on his earnings than almost any working American. Investing is not inherently more valuable than labor, and it’s simply not true that investing in the stock market creates jobs. Take it from me: I am an investor. I have not actually worked in years. I let my money make me money. Over the past year, do you know how many jobs I’ve created? Zero. The only thing that does create jobs is consumer demand for products and services that people can make and provide, not my investment dollars. If we want to create jobs, we should be implementing policies that grow the middle class and help bring people up out of poverty so they can participate in the economy. Unfortunately, the “Tax Cuts and Jobs Act” will do just the opposite.
Not only does the tax bill encourage corporations to move their money and their corporate headquarters overseas, it actually incentivizes them to move plants and manufacturing facilities to other countries as well. That’s right – rather than help bring back American manufacturing, this bill actually gives companies a tax break for moving their factories to other countries. Tax jargon aside, this means that the more equipment and factories a company has in other countries, the more tax–free income it can earn. If that isn’t a strong incentive to shut down American factories and move them overseas then I don’t know what is. So if corporate tax cuts don’t bring back manufacturing, or lead to job or wage growth, who benefits? The answer is clear: CEOs and stockholders. This is unsurprising to anyone who’s tracked corporate responses to last year’s bill. While some corporations have given raises or bonuses, the amount given to workers is dwarfed by the hundreds of billions of dollars that have been spent on stock buybacks. It took less than two months in 2018 for companies to announce over $200 billion in share buybacks, more than double the amount from the same period in 2017.
Confirming viewpoints from the previous article, these excerpts from a-taxing-headache-from-congres
In the past, corporations were taxed on all their profits, regardless of where they were booked, but they could defer paying what they owed if profits were shifted overseas. The policy of deferral led to widespread gaming. Just prior to passage of the tax law, U.S. corporations held an estimated $2.6 trillion offshore. Apple alone had $250 billion overseas. Collectively, companies owed more than $750 billion in deferred taxes. Under the new law, U.S. corporations no longer pay any tax on their foreign profits. That itself is a loss to American taxpayers and will continue to encourage multinational companies to look for ways to move profits offshore. The law does include provisions to try and prevent profit shifting, although experts question their effectiveness. The complex rules led the CBO to a few basic conclusions. According to the CBO, “by locating more tangible assets abroad, a corporation is able to reduce the amount of [U.S. taxable income]. Similarly, by locating fewer tangible assets in the United States, a corporation can increase the amount of U.S. income that can be deducted [from U.S. taxable income]. Together, the provisions may increase corporations’ incentive to locate tangible assets abroad.”
In other words, if a U.S. company moves jobs and factories abroad, it can escape U.S. taxes. The CBO says this is not “gaming” because it is moving real operations, not just profit shifting through paper transactions. If we accept the CBO’s rationale, it should be noted that U.S. companies can continue to enjoy access to our markets, protections for patents and other rights through our legal system, and the stature and legitimacy of being a American business. They just get a massive discount on those benefits. Adopting this form of international corporate taxation to stop the offshore gaming is, in the words of Jordan Weissmann of Slate, “like trying to fight shoplifting by making it legal.” For U.S. multinational companies that choose not to move operations overseas, the CBO estimates that profit shifting will continue, although at a slightly lower rate, dropping from $300 billion a year to $235 billion. That is still more money than what we spend annually on health care and other services for veterans.
For the rest of this part 3 commentary, I’m including the email I just received from Republican strategist Alex Castellanos, who you may remember seeing on TV or have read his reports. I haven’t always seen eye-to-eye with Alex, especially our disagreement over Trump, so perhaps that’s why he unsubscribed from my newsletters a year ago. But as a true GOP trooper, he’s just trying to help hold his party together. So I wanted to share this letter from Alex with you in its entirety since he makes a lot of good points (but as I say, there are opinions in here on Trump I do & don’t agree with):
well, good morning! if you will allow, i’ll point you to the home page of POLITICO Magazine this morning, to share a few thoughts from yours truly on our T-Rex president, donald trump, and the future of the republican party…if we have one. a republican party, that is. and a future.
a few excerpts…A little more than six months from now, on November 7, the sun will rise on a political landscape wrecked by President Donald Trump’s first midterm election. Thanks to a map that puts more Democratic than Republican seats at risk, our party will still cling to control of the Senate, but GOP House members lack insulation: They will crawl out from the smoking rubble of a 40- to 50-seat pounding to find they have lost their majority.
Paul Ryan will be gone. The former Great White Hope of the Republican Party sneaked out of town before reveille, leaving his troops facing extinction…. Our eyes will turn to those survivors, the leaders of a broken party, one only they can restore. They will determine where the Republican Party goes next. How do we renew our party in the Age of Trump?
*****
Our country fears it is losing its identity. We’ve always shared common beliefs, tenets that unite us as Americans. Our flag and anthem bind us into a nation because of the principles they represent: freedom, individual responsibility, the rule of law and equality of opportunity for every American. We have been united by one inspired national culture, open to and supported by all Americans.
Uniting America is not about “going back” or preserving these values only for male or white Americans. Diversity, equality and an open society are all pretty darn “American” these days. However, our openness no longer seems to have a uniting purpose….
Whether in politics, the media and entertainment businesses, or college campuses, our nation is sick with division because…. There is no unifying national identity to bring us together or give our unique, individual contributions a common objective. Instead, the welcome ideas of “openness” and “diversity” have displaced what unites us. And when there is nothing to which we all belong, diversity becomes division…. Without the north-star of a unifying national identity, our country cracks into angry, razor-edged shards until its blood is drained.
****
It is unremarkable, at this point, to note that good Americans turned to Donald Trump, not because of his many flaws, but despite them. Trump’s threat and his appeal are identical: He is the un-distilled reptilian brain.
Trump is all id, the oldest and most primitive part of our brain, concerned only with the evolutionary basics: sex, sustenance, and survival. His brain is not filtered by our social and emotional brain, much less by the rational, pre-frontal cortex. He has no Jeb Bush brain to digest facts and figures, issues and policy. Instead, Donald Trump is a predator. When something enters his world, he either eats it, kills it or mates with it. That is all his predatory instincts can do.
The president’s primitive nature is the root of his narcissism. Trump’s immediate and voracious appetites allow no concern for others or understanding of tomorrow. He reacts instinctively, not emotionally, morally or intellectually. He is insensitive to truth and incapable of discipline or strategy.
Yet Americans elected this predator, this T-Rex President, as their last resort, in a desperate attempt to protect themselves from the horde of smaller, slimier predators in Washington who were on the verge of devouring them.
****
We can all see that Donald Trump is, at times, a disreputable human specimen. His supporters see it as clearly as his adversaries. In fact, Trump makes sure we see it. Our T-Rex President is proud of his predatory triumphs. Yet this electorate thought that even Donald Trump was a better bet than the status quo both Republicans and Democrats were offering them. Trump’s victory measured our national frustration, our hunger for an alternative to the impoverished offerings of both parties.
Like the Bourbons after Napoleon, however, Republicans and Democrats “have learned nothing and forgotten nothing.” Since the surprising day Trump was elected, neither party has learned or evolved, despite their humbling defeats at his hands.
****
The Republicans who make Donald Trump necessary are not the boot-lickers like Corey Lewandowski who blindly follow his parade past Trump Tower, from Fifth Avenue to Pennsylvania Avenue. His enablers are Bill Kristol, Steve Schmidt and Karl Rove. They are Jeff Flake and John Kasich. They count Jeb Bush and Paul Ryan. They include all of us in the Republican Party who left the vacuum Trump has occupied. Yet today, we still offer more of the same but expect different results. If we do not renew this visionless party, it will never lead again.
****
Donald Trump’s presidency is hidden behind the clouds, a storm of controversy of his own making. This president, more than anyone else, has made it impossible to credit him for his accomplishments. By any fair measure, there are many….I doubt any other 2016 GOP candidate could have equaled this President’s accomplishments. He has stopped America’s decline and, in many areas, reversed it. Americans should be grateful he was elected President. If he is not disqualified from the ballot, I plan to vote for him again.
But what Trump has done can be undone. He is a man, not a movement. He is an instinct, not an idea. He crushed a hollow Republican Party, but he has not rebuilt it. The Republicans who come after Donald Trump must do what they have not yet done: decide how to lead after this exasperating and heroic president leaves office. And that is our problem: We don’t have a Republican Party. We ought to. Not long from now, our country is going to need one. again, you will find the entire piece here, on the home page of POLITICO Magazine.
best,
alex
So feel free to peruse the links below. The economic topics include the Trump tax plan, debt, pension plans, health care, college, immigration & Puerto Rico. And the last group has a large number of links on what could be a midterm bloodbath, even though November is still a long ways off. The final links are the Alex Castellanos articles. From there is the section on the far-left Daily Kos articles, with even a few far-far-far-left Palmer Reports. And then as always to wrap up part 3, we have our selected old song relating to today’s politics.
(Click on image for full video)
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