NY Times semi-paywall, but you probably have guessed what the article says already. Capital investment increase did happen earlier this year but is slowing. Very little wage growth or expansion in hiring. And lots of stock buybacks.
It was not supposed to change corporate behavior. Nobody in the corporate world thought it would lead to more hiring, as everyone understands that unmet demand is the driver, not available capital.
The idea that this tax cut would spark hiring is just a slightly different take on trickle-down economics, giving money to ‘job creators,’ and the other bullshit used to sell Reaganomics to a GOP base willing to believe whatever they are told. The businesses and individual donors understood its actual purpose.
Stock buybacks increase the share price, and therefore the compensation of everyone whose job title starts with a C. Hiring new employees adds to your cost structure, which often has the opposite effect.
Oh, in reality, sure. The article is in response to the rainbows and unicorns promised by the Republicans when talking up the tax changes. Which…huge surprise!!..have not materialized.
Stock buybacks and mergers are exactly what the vast majority of economists predicted would occur.
Most corporations were already sitting on a huge amount of cash… giving them more cash didn’t really do anything.
The tariffs are getting ready to kick in and fuck things up big time though.
This seems to be the thread for general tax policy, so here we go:
I know this isn’t going to be particularly popular around here, but I don’t think he’s wrong. I think he’s missing some components…closing down loopholes and tax credits for big industries, specifically…but nonetheless the numbers do seem to add up to big continuing deficits. I’m not a balanced budget zealot or anything, but I do want to see some level of fiscal responsibility and that means reasonable deficit levels. Sure would be nice to have some kind of feasible roadmap.
My first step on the road map would be slashing the insane military budget, especially given how much rampant fraud and abuse is present. That’s got to provide a pretty damn good head start to paying for what would make for a better society overall.
Pretty much every reasonable Democratic proposal for “Medicare for all” describes it as “Medicare buy in”. In other words, the money that people (and employers) used to spend on health insurance would at least partly be used to finance the program. Call that a “tax” if you want, but if it ends up saving people money then I don’t think it’s worth complaining.
And that’s by far the most expensive item discussed in the article. The other things, like loan forgiveness and infrastructure spending, could very likely be financed solely by increasing taxes on corporations and the wealthy.
Counterpoint: he is wrong.
The writer of that article is a lying sack of shit.
For example, he refers to:
'Democratic socialist agenda that includes single-payer health care ($32 trillion)"
But $32 trillion is the cost in current dollars of the entire US health care system over the next ten years. We are already going to spend $16 trillion of that in government funds (Medicare, Medicaid and state programs), plus we are already going to spend another $16 trillion of that in private money (roughly 8$ trillion to $10 Trillion in employer payments and another $6 trillion to $8 trillion in private co-pays, premiums and deductibles.)
So that $32 trillion of alleged new cost is just a lie. Adding the 10% of the citizenry without formal coverage (who nonetheless incur health care costs in many ways) to single payer will add around 5% to the bill, assuming no savings from single payer, so the worst case on single payer is “new money” spending of $1.6 trillion over ten years ($160 Billion per year) plus transition costs. (The transition costs and disruption are almost certainly the biggest hurdles, here. The “new money” costs could probably be offset by reasonable price reforms over a ten year span.)
So more than half of his list is just BS right off the bat.
Here’s another way to look at this issue: the US GDP is over $20 trillion a year right now, so at current dollars, that’s $200 Trillion gross over ten years. Of that, roughly 80%, or $160 trillion, is income. Of that $160 trillion in income, roughly 25%, or $40 Trillion goes to those making over $250K per person per year.
If you ignore his BS about health care, and set the deficit aside as a separate problem (which it is IMO, as it was caused by GOP tax cuts), that means his “liberal delusion list” of infrastructure, education, jobs guarantee and student loan forgiveness would cost $10 trillion over yen years, which could be paid for by raising the current top rate of 37% to 62%, which is still less than it was under Kennedy (70%) or under Eisenhower (91%).
And the biggest ticket item there is the federal jobs guarantee, which he estimates at $6.8 trillion over ten years, but I would need to see a LOT more info before being in favor of that program, or for trusting that number either.
The reality is, health care is really an issue of transition, not cost. We are already paying the highest costs in the world for health care. There are still serious issues like tax reform, education, infrastructure, etc. but when you look at the vast share of wealth going to a few, there is money there to fund a hell of a lot of reform.
Thank you. I didn’t have the strength to reply to that drivel.
The number of people who can’t seem to understand that you need to weigh proposed taxes against what Americans currently spend on healthcare right now boggles my mind. I mean, the entire point of healthcare reform is to REDUCE COSTS. Yet 80% of people I talk to about it bemoan that we can’t afford healthcare reform. What???
What percentage of the budget do you think that is? And do you think we should maybe pay our soldiers a living wage?
Some good points about bad assumptions in that article around health care, thanks folks. It seems to be a pretty common theme in conservative circles that cost analysis doesn’t take into account reductions in what people already spend in the private sector. I do wonder about second order effects…job and investment losses from reductions in the private insurance market…but that’s got to be a couple of orders of magnitude lower than the numbers for the Medicare for All costs.
On the military spending, I’d frame it differently…redirect the spending to domestic missions like infrastructure rather than cutting military spending…but that’s semantics aimed at stealing the thunder of defense hawks.
I’ll admit to being wrong about his being wrong!
Looking at Bernie Sanders’ page on paying for proposals, it does look as if closing loopholes plays a really big role in revenue generation. So at least I got that bit right in my initial reaction!
I’d say the thing to keep in mind is that virtually every other industrialized country in the world has something like Medicare for all, and they seem to be able to pay for it. So any column which says it can’t be done has to be wrong, and probably the author is being dishonest — because he/she has to know that it can be done.
Across the EU, tax revenues as a % of GDP are basically double what the US collects, if you include social insurance contributions. So there’s lots of room for higher taxes without creating unlivable conditions or communism (those countries are nice places to live despite the nonsense you hear about them on the right), and in any event counting the money we already spend on health care as a new cost is obvious nonsense.
I’d at least agree on one point: taxing the rich really is a delusion, at least in the sense that it’s easy to say but spectacularly hard to do.
The rich have powerful lobbies, good accountants, can mix and match dividends, capital gains and salary to get optimal fiscal results and, what the hell, they can move the whole operation to the bahamas (on paper) and pay close to zero tax.
It’s especially true since there is often no coming back from many fiscal choices. Some studies I’ve seen say companies (and the rich) keep tax cuts, but also hand out the bill for any tax increase to their customers/employees. For example, the corporate income tax worldwide is considered a race to the bottom. So now that the US has reduced its corporate tax rate, there is strong pressure to reduce it even more in Canada, as Canada’s lower rate has been considered its competitive advantage for a long time.
Plus, when it comes to the OECD BEPS project, the US seem tepid at best and at worst seem to be trying to sabotage the project from the inside.
That’s the problem though, in that the ACA wasn’t really concerned with lowering costs. It was more about expanding coverage, while it likely did have a temporary muting effect on cost growth.
What you are going to get from the far right is an argument that you already did the ACA and failed to control costs.
Because you are talking about a massive restructuring of the entire system, the actual mechanism by which costs could be controlled is going to be completed… Really, too complex for most voters to understand.
You are going to need to come up with a simple, easy to understand message, with a very charismatic person to sell it.
This is why folks like Warren can’t be the main face of the party. She can’t sell that kind of thing.
You need some young guy, with a ton of charisma, if you want to move something that big. And I intentionally said guy, because sexism is a thing. While i think it’s totally irrational and stupid, the reality is that there are a ton of sexists who simply do not respect a woman’s ability to lead. They won’t buy something that big from a woman.
You can perhaps eventually change their minds on sexism, but i think it’s now likely you are just going to have to wait for them to die off. But you can likely win them over with a young, charismatic guy… Because really, a lot of them are pretty simple.
Someone like Jason Kander, a handsome young white guy with military experience. That guy can win over a big chunk of those folks, i think, because they will vote for him purely on his being a handsome young white guy. That has the potential to supercede his progressive politics in their minds.
IIRC, I thought the cost-cutting aspects of the ACA were exactly what was removed by the GOP before the bill was passed, because they would have hurt drug companies?
Some of those things would have had some cost reduction, although most of them were things like additional taxes. They were more about offsetting government costs through taxes on manufacturers, more so than actually addressing the core driver of costs.
And really, that’s ok. The primary purpose of the ACA was to expand coverage to those who lacked it, and it definitely achieved that goal. It did in fact work. It just didn’t fix the system, because it wasn’t intended to. It was a step, not the destination.
Understood. The ACA could never control costs because the votes weren’t there, so Obama made a choice between expanding coverage or controlling costs and the ACA was targeted at the former. I also understand that Republicans and the like will point the ACA not hugely reducing costs as “proof” that reform will be unaffordable, but these same people also believe in QAnon, trickle-down economics, and that we need to deploy military forces to protect us from barefoot Honduran kids. So fuck 'em.
What grinds my gear is “We can’t afford medical care like ______” (Any European country like Germany, Switzerland, etc). I mean it’s so stupid on its face I don’t even know where to begin. “We can’t afford to pay less like these other countries that pay less than we do, we must continue the course and pay more under our current system because that’s all we can afford!” is the dumbest argument ever. They cannot understand the concept that TAXES could go up but their overall costs could GO DOWN, since the taxes are then covering medical expenses, not premiums and out of pocket costs. It’s like their brains derail at “TAXES GO UP” and can’t proceed further.