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Monday, November 20, 2017

Charlie Rose? Really?

CBS and PBS have both suspended Charlie Rose after many women came forward to complain about being sexually harassed by the soft spoken, liberal reporter/commentator.  It makes one wonder who will be next?  Maybe one of the muppets from Sesame Street?  Anything is possible.

There is also another woman accusing Al Franken of misbehavior, and this took place while he was a senator, not before.  Once again, Franken claims to have a different memory of what took place.  Maybe Al had a memory replacement, or maybe he needs to try Prevagen to improve his memory.

Oh, and one of the leadership of the Democrats in the California state legislature is retiring from office after multiple accusations were leveled at him by various women.  And an Oklahoma Republican legislator is pleading guilty to soliciting a teenaged boy for sex.  Then there are some new creeps in Hollywood who are being accused as well.

One thing is certain; if Charlie Rose is on the list, then it could hit anyone.  There are also great many men who have been behaving really poorly while hiding behind their supposed support of women's liberal causes.  For decades, these men have been protected by the feminists in the same way that they protected Bill Clinton in the 1990's.  Maybe we'll be lucky and this will all come to an end.

Raising the Deficit--Or Not

The federal budget includes a provision to allow a tax cut that will raise the deficit by 1.5 trillion dollars over ten years.  In order to pass the Senate version of the tax bill without a filibuster, the bill must comply with those figures.  So, does that mean that the tax cut will lead to a higher deficit?  Strangely, the answer is no.

The rise in the deficit will be calculated by the CBO.  That's the same CBO that tells us that elimination of the individual mandate in Obamacare would cause between five and six million Americans on Medicaid to "lose" their insurance.  Remember, Medicaid is free for the patient.  The CBO is saying that without the individual mandate (which has no effect on the availability of Medicaid), more than five million people will choose to drop out of the program.  I would like the CBO to explain why a poor person getting free medical care would choose to get no medical care instead.  There is no such explanation, and there is especially no way that nearly six million people would do that.  Simply put, much of what the CBO comes up with is suspect to say the least.

But let's get back to the deficit.  The CBO will calculate the effect of the tax cut using static scoring.  What that means is that the CBO will look at the resulting revenue and expenditures without considering the economic growth that the tax cut will bring.  A tax cut will push huge amounts of money into the private sector of the economy thereby raising both consumption and investment.  That means a substantial boost to economic growth.  An extra 1% annual growth in the  economy over the next ten years means that the USA will be producing roughly two trillion dollars more of goods and services in the tenth year than it would without the tax cut.  Normally federal taxes take roughly twenty percent of that total, so in year ten, we would see an extra 400 billon dollars in revenues for the government, revenues that the CBO is ignoring.  Over ten years, those extra revenues which come from growth should total more than 1.5 trillion.  In other words, the tax cut ought to lower the deficit, not raise it.

Now, all this is prediction of the future, so it has inherent risks.  The CBO may be wrong.  The dynamic scoring model may be wrong.  Events may overtake both.  For example, a ten year projection in 2000 would not have considered the effect of 9-11 or the resulting war on terror.  Who knows what is coming in the next ten years?  The best and most reasonable estimate of the effect of the tax cuts, however, is that they will not have a materially adverse effect on the deficit.

Sunday, November 19, 2017

Lies About SALT

The deduction for state and local taxes (or SALT as they call it in DC) is the subject of some of the most outrageous lies in the ongoing debate about the GOP plan to reform federal taxes.  Democrats and their allies in the media and in supposedly "non-partisan" think tanks are screaming how ending this deduction will cause higher taxes for the middle class to pay for tax cuts for the wealthy.  That's just a blatant lie.

Let's consider this example.  The median household income in the USA is $59,000 at the moment.  A couple with income of that amount is right in the middle of all Americans, so they are obviously the heart of the middle class.  If they live in a state with a 7% income tax (which is high), they pay at most $4000 in state tax which they can deduct.  If they own their own home and pay $5000 in property taxes, they can deduct those too.  Most likely, these amounts would be less, but we are talking about a deduction of $9000.  Under the Senate plan, the $9000 deduction would go away, but the standard deduction would rise by $12,000, so these folks would be better off.  Under the House plan, the 5K in property taxes would still be deductible, but the 12K rise in the standard deduction would be there again as an alternative.  Under either plan, the couple would see a substantial tax REDUCTION.  This is especially true since the tax rate would be reduced as well.

Now let's consider this example:  a wealthy Hollywood agent and spouse earn $1,500,000 for the year.  They pay California income tax of $180,000, a deduction that they will lose.  They also pay $40,000 in taxes on their multi-million dollar home, and they get to keep $10,000 of that deduction.  Their tax rates actually go up slightly under the GOP plan as well.  The net effect on their taxes is an increase of roughly $60,000 per year.

These are not one-offs.  Nearly all the middle class will get large tax reductions under the GOP plan.  Nearly all the super wealthy will get no tax cut at all with many seeing increases. 

The point is that the cuts for business and the middle class will increase economic growth by 1-2% per year for a few years.  That will be a major benefit and job producer for everyone.  The Democrats are just telling lies when they claim that the GOP plan will raise taxes on the middle class.  For what it's worth, the Washington Post fact checker gave four Pinocchio's to claims by Democrats that middle class taxes would increase under the GOP plan.  If the Dems can't even get the WaPo to go along with their lies on the tax plans, you know those lies are truly blatant.   

Here We Go Again

For the second time in a few days, Israeli tanks have fired "warning shots" at Syrian forces who are violating the 1974 Armistice Agreement that ended hostilities in the Yom Kippur War.  The Syrians and Israelis agreed that there would be a demilitarized zone between the two countries and that no heavy equipment would be used to fortify and positions in that zone.  Syrian forces loyal to the Assad regime have been spotted doing construction inside the zone to build bunkers and other fortified positions in clear violation of the Armistice.  The Israelis objected to the local UN commander who oversees the armistice, but the Syrians did not stop.  The shelling by the tanks followed.

If the Syrians do not stop the violations of the Armistice, the Israelis will undoubtedly destroy whatever it is that the Syrians are building.  Israeli jets could pulverize the structure in less than a minute, but that might result in Syrian casualties.  The Israelis do not tolerate Syrian violations of the armistice.

Most likely, we will shortly see a third move by Israel, this time to destroy the new Syrian bunker.  Assad will denounce the move, but unless something new is afoot, he will do nothing other than to look impotent in the face of the Israeli military.  Let's hope that is how it turns out.  It would be terrible if the Syrians are just trying to create a reason to start fighting with the Israelis.  ISIS is almost gone from Syria.  Even though Assad may want to push all the Moslems into supporting him by fighting with Israel, it would be terrible for him to subject the Syrians to even more violence just to solidify his political position.

The Griffin Door (to Oblivion)

Kathy Griffin is back with a youtube video denouncing the "hate" she is getting online and lamenting the fact that she has no jobs whatsoever in the USA.  Think about the irony of that claim.  Griffin, the master of hate, is upset that people are denouncing her online.  She appears in photos with what is supposed to be the severed head of the President of the United States, and she complains when people boycott and criticize her.  She says she apologizes for the photo and then takes back the apology when it doesn't gain her acceptance, but she complains about being mistreated.

I hope this is the last time I will have to write about Kathy Griffin.  In fact, I didn't link to her video since I don't want to drive any hits to her effort.  Who knows, maybe Kathy can join Hillary and they could both just go away.

You decide

Suppose you were a corporate executive.  Would you be more likely to invest in the USA if taxes here were 35percent or 20 percent?  Bernie Sanders told ABC this morning that the answer is 35.  He says that with other provisions figured in the effective rate is really 14 percent. So Sanders claims that cutting taxes will move jobs abroad.  It's  not just that Sanders is wrong; he clearly is.  No, the problem is that Sanders is outrageously wrong, in fact, moronic.

How can the Democrats just lie about these things? 

More Hypocrisy

According to reports, New York governor Andrew Cuomo ignored repeated pleas for help from a woman working with one of Cuomo's favorite deputies. The woman is now suing both the deputy and the governor.

I don't know all the details of the story. I've read the woman's claims and seen Coumo's denials. One thing is certain; they cannot both be telling the truth. She claims she reported the abuse at least six times to the governor's office with Cuomo just ignoring her. The governor says it never happened.   This ought to be easy to prove with phone records or email. The claims seem believable because it would be foolish to sue absent some sort of corroboration.

It's annoying to see yet another prominent politician dragged into yet another mess.  If the story is true, Cuomo is stupid to deny it.