Trump Wants to Cut Taxes for the Rich. Again.

The federal deficit has hit an all time high, with a disproportionate amount of the debt piled on under the Felon's two regimes. So what does the Felon and his billionaire sycophants want to do? Give even more tax breaks to the wealthy, of course, further pursuing the Republican Party's effort to create a new Gilded Age, with even more tax burden shifted to the less than wealthy. It's all part of the GOP's long established reverse Robin Hood agenda. Should more tax cuts for the wealthy be enacted,  the deficit will balloon even more, likely driving up interest rates and making things more expensive, not more affordable. Decades of evidence shows that tax cuts for the wealthy never pay for themselves and that "trickle down economics" has been a fraud since the Reagan era. But in the up is down and down is up alternate reality of the GOP and far right, why worry about facts and objective reality.  Meanwhile, the super wealthy, who put lower taxes above all else, are spending millions on the mid-terms to elect pro-tax cutting Republicans to Congress.  Concerns about bankrupting America are nowhere on the radar screen.  A piece at The New Republic looks at this latest round of irresponsible tax cut for the wealthy proposals.  Here are excerpts: 

It’s election time, so the White House, according to Bloomberg’s Katy O’Donnell and Caitlin Reilly, is weighing whether to give the rich more tax breaks. Republicans! They just can’t help themselves!

Cutting taxes on the rich is a uniquely unpopular idea. Since 1939, Gallup has been asking, “Do you think our government should or should not redistribute wealth by heavy taxes on the rich”? In 1939, 54 percent said “should not” and only 35 percent said “should,” even though the Great Depression was raging and the New Deal was well along. Since 1939, though, the should nots have been falling and the shoulds have been rising. Today, a 52 percent majority say the government should redistribute wealth by taxing the rich heavily, and a 47 percent minority say it should not.

If you put the question in a manner more appetizing to moderates—do the rich pay their fair share?—61 percent say no, according to an April Pew Research Center poll. Fully 81 percent of Democrats and Democratic-leaners also say no, along with a not-inconsiderable 41 percent of Republicans and Republican-leaners.

Given these realities, the White House, if it endorses a tax cut, will try to sell it as a middle-class tax cut. The Democrats have tax-cut proposals of their own that target lower-income people. I’ve explained previously that I prefer the alternative approach of cutting payroll taxes at the low end and eliminating the Social Security tax ceiling at the high end

On Tuesday, National Economic Council director Kevin Hassett and Larry Kudlow, who held that post during Trump’s first term, discussed on Fox Business the two tax proposals Trump is contemplating. One is to index the capital gains tax, and the other is to exempt from capital gains tax home sales below $2 million. (Currently the exemption goes up to $500,000.) The first of these is a more obvious giveaway to the rich. The second mimics the Obama administration’s strategy of shielding the haute bourgeoisie when it hikes taxes on the rich. . . . . In Trump’s version, the context for cutting taxes for the haute bourgeoisie is a tax cut for richer folks, too.

The dialog between Kudlow and Hassett conveyed that particular air of unreality characteristic of Fox World. (It was on Kudlow’s Fox Business show, which is called Kudlow.) Kudlow began by noting that the Congressional Budget Office had just projected this year’s budget deficit to be $2.1 trillion, up from February’s estimate of $1.9 trillion. “The budget deficit for the first ten months of the year is $1.8 trillion,” Kudlow said. “I’m not sure I understand why.”

Kudlow was baffled because he actually believes, contrary to 45 years’ evidence, the GOP’s propaganda that tax cuts pay for themselves. They do not. The tax cuts in last year’s budget reconciliation bill, for instance, slashed federal revenue by an estimated $570 billion.

In Fox World, as opposed to the real world, it is not thought illogical to follow a lamentation about government insolvency with a plea for tax cuts. Kudlow cited a McLaughlin & Associates poll that said 62 percent of voters approved of indexing the capital gains tax to inflation. . . . . Why not index capital gains taxes, too?

Because capital gains are already taxed at a lower rate than labor income. The top capital gains rate is 20 percent. The top labor-income rate (which is also too low) is 37 percent. Get back to me when you’ve eliminated that differential—and when you’ve also eliminated the “angel of death” loophole that lets assets escape capital gains tax when passed on to heirs—and we can talk. But if we ever do index capital gains like we do income-tax brackets, we’ll have to figure out some way to capture lost revenue—because remember that $2.1 trillion deficit? You don’t want to make it $3 trillion. According to the Yale Budget Lab, indexing capital gains would cost $170 billion over 10 years if it applied only to assets purchased after 2025, and almost $1 trillion if it applied to all assets.

Then there’s the distributional impact. People making less than about $100,000 would receive virtually no benefit, according to the Yale model (and would likely pay more income tax to cover the lost revenue). People making more than about $3 million, on the other hand, would save $350,000 in taxes. If McLaughlin & Associates had bothered to furnish voters with that information, its poll results would have been quite different.

If Trump endorses these tax proposals, he’ll say they’re an affordability play and argue that lowering capital gains tax will encourage more people to sell their houses, thereby lowering prices. But Democrats should answer that these are just two more Trump giveaways to the wealthy, most especially the indexing of capital gains. There are many ways to reduce the cost of housing: zoning for higher density where appropriate; investing in infrastructure; eliminating tariffs on lumber, steel, and aluminum to lower construction costs; subsidizing low-income housing; and so on. Throwing money at millionaires and billionaires is the most regressive way conceivable to lower housing costs, and there’s no great reason to believe it would even work.