In California’s war on Trump, everyone loses

Donald TrumpFor a state so enamored with passing laws, California can seem awfully lawless sometimes. Our progressive Legislature and elected leaders have decided to make political and litigious war on the duly elected president of the United States.

The Resistance is here!

Truth is, Donald Trump has driven them all a bit batty. Our legislators have become so unmoored that even Gov. Jerry Brown — who just the other week signed the self-destructive “sanctuary state” law — had to step in and veto legislation requiring presidential candidates to release their tax returns. Brown said that as politically appealing as such a law might be, he was uncomfortable with California setting election policy for the country.

It’s nice to see the light of reality break through the progressive miasma once in a while. If only some of that light could break through the state attorney general’s office.

Attorney General Xavier Becerra on Wednesday announced he’s seeking a restraining order to stop the Trump administration from ending Obamacare’s reimbursements to insurance companies. California is one of 17 states challenging the decision, which would cut off $10 billion in subsidies. The lawsuit is a fool’s errand, of course, but entirely in character with Becerra’s strategy of suing the administration at every turn, regardless of the merits. …

Click here to read the full article at the Sacramento Bee

Related content: California’s War Against Donald Trump: Who Wins? Who Loses?

GOP Tax Reform Boosts Wages According to Boston University Researchers

TAX REFORM UPDATE!!

Researchers at Boston University Agree!

In a study published this morning analyzing the economic and revenue impacts of the Republican “Unified Framework” Tax Plan, researchers found:

  • The new Republican tax plan raises GDP by between 3 and 5 percent and real wages by between 4 and 7 percent.
  • This translates into roughly $3,500 annually, on average, per working American household.
  • The source of the increase in U.S. output and real wages is the UF plan’s reduction in the U.S. marginal effective corporate tax rate from 34.6 percent to 18.6 percent.
  • According to their model, the U.S. corporate income tax represents a hidden tax on U.S. workers.

Click here to go directly to the study

Corporate Tax Reform and Wages: Theory and Evidence

New analysis from the Council of Economic Advisers proves:

  • Reducing the statutory federal corporate tax rate from 35 to 20 percent would increase the average household income in the United States by, very conservatively, $4,000 annually.
  • The increases recur each year, and the estimated total value of corporate tax reform for the average U.S. household is therefore substantially higher than $4,000 à The most optimistic estimates from literature show wages could boost more than $9,000 for the average household.
    • A 15 percent corporate rate cut could increase average household incomes from $83,143 in 2016 to between $87,520 and $92,222.
    • Median household income — meaning earnings for more of a typical household — would rise from $59,039 to between $62,147 and $65,486.
  • Literature finds countries with low corporate tax rates have seen higher wage gains than countries with high corporate tax rates.

Click here to link to study in its entirety

A Fairer Tax Code Is a More Efficient Tax Code

Tax formThe last time we saw comprehensive tax reform in this country was also the last time UCLA won a Rose Bowl (1986), so we are talking about a long, long time. We know there have been several tax cuts, and tax increases, since then, but as for some legislative attempt to drive a change in the overall system of tax policy in this country, it has not happened in over 30 years. It would be easy to argue that partisan polarization is the cause of this legislative difficulty, but that would be inaccurate. Partisanship did not keep welfare reform or comprehensive trade agreements from being done in the 1990s. Partisanship did not keep significant national-security endeavors from passing in the 2000s. And President Obama’s reelection in 2012 coincided with the sunsetting of the George W. Bush tax cuts, creating one of the more bipartisan agreements in recent history, when Vice President Biden and Senate majority leader McConnell negotiated a permanent extension of the tax cuts that resulted in more favorable treatment for investment tax and estate tax and left the individual rates at the lower levels of the Bush plan, besides at the top rate. Bottom line: Partisans have done plenty of bipartisan work over the last 30 years; they just haven’t done it when it comes to reforming something that is broken.

The term tax reform is pivotal here. Tax cuts scream for people who pay too much in taxes wanting to pay less (fair enough). Tax reform implies something is structurally unfair, and therefore needing reformation. We do not need to reform that which is already good and right. Sure, we may turn a knob here and there on levels, but reform is more comprehensive, and more reactive. The catalyst to reforming something is admitting something needs to be reformed.

The catalyst for 2017/18 tax reform is a broken tax code, and that brokenness is most evident in two places: A brutally non-competitive business tax code that hasn’t come close to dealing with the global realities of the last 30 years; and a glut of tax brackets and deductions that are too confusing, too easy to manipulate, and too divorced from simplicity and fairness. Yes, the rates are too high, both individually and corporately, but beyond that, the system is not right. The efforts of the Trump administration, led by Treasury Secretary Steve Mnuchin, National Economic Council director Gary Cohn, and the GOP leadership of the House and Senate, seek to use a new tax-reform bill to attack the fundamentals of what is broken in the tax code (a non-competitive corporate code) and clean up around the edges as well (alternative minimum tax (AMT), pass-through entities, etc.).

The math of passing tax reform is difficult because of Senate rules on reconciliation. To attach it to a budget bill and thereby enable 51-vote passage, the impact the tax plan can have on overall revenue (and therefore deficits) is limited. “Dynamic scoring” — the reality of supply-side math that pro-growth tax cuts move us in the right direction on Laffer’s Curve — allows for some more liberal use of this parliamentary reconciliation reality. But at the end of the day, the White House is limited in how much it can reform the tax code without “pay-fors” — offsets and such that will enable the plan to be scored within budget-reconciliation math.

After the inevitable death of the ghastly “border adjustment tax” idea, the best “pay-for” available is eliminating the deductibility of state and local taxes against federal tax liability. Should that tax deduction be eliminated, the comprehensive business tax reform needed (a 20 percent rate vs. a 35 percent rate, a territorial system, repatriation of foreign profits, and the elimination of nearly all special-interest deductions) can become reality. And yet the path to tax reform is being blocked by those who would hold on to the abysmal deductibility of state tax — a blockage being promoted by Republicans and Democrats alike (who says they never do anything on a bipartisan basis?).

Who would want to hold onto the deductibility of state taxation? Well, legislators in high-tax states, for one, who fear little consequence from the residents of low-tax states who end up footing the bill for their fiscal recklessness. In fact, the sole source of opposition to eliminating this deduction has come from blue state California, blue state New Jersey, blue state New York, and blue state Connecticut. Unfortunately, the fact that these states are all blue does not mean this is leftist partisanship, because the opposition is coming from Republican legislators and thought leaders in these states as well. That opposition underscores the fundamental need for reform — reform in our policy, but reform in our thinking as well.

There is never going to be reform that does not upset some people, somewhere in the tax food chain. If there could be such a thing, by definition, there would be no need for tax reform! The objective of a national tax-revenue system should be to fund the legitimate functions of government, and do so in a manner fair to the national self-interest, devoid of governmental favoritism or bias. The purpose of a tax system is not to implement social agendas, punish certain behaviors, reward certain behaviors, etc. The federal tax code is a funding matter, and it ought to be done in the least threatening way to growth and competitiveness possible. A 0 percent tax code is not a possibility, as competitive as it may be, as government has responsibilities, liabilities, and legitimate functions that require funding. But where funding can be achieved without compromising American economic growth, that must be the aim.

The business-investment tax code in our country is a disaster, and this is hardly denied by the other side of the aisle. The rate is too high, and the incentives for businesses to keep moneys offshore are gigantic. Additionally, the loopholes, deductions, and various ways in which certain privileged or selected companies benefit (while others do not) is a direct violation of the intent of the tax system. Simplification is the goal, and an even playing field that does not pick winners and losers is the aim. While I would prefer to get rid of the R&D credit (crony capitalism for pharma) and the low-income-housing credit (crony capitalism for real-estate developers), the proposed tax reform goes a long way towards equalizing the business code and creating a competitive scenario for our U.S. companies with large multinational presence.

So what is the hang-up? The aforementioned state-tax deductibility issue is being presented as a hang-up by Left and Right alike. Ironically, the concern the Left has always had with Republican tax maneuvering is that it unfairly assists those on the higher end of the wage spectrum. Here, the Democrats are supposedly upset about the loss of a tax deduction that, by definition, is used only by those on the higher end of the wage spectrum (those who itemize). But let’s look at the issue from the vantage point of Republican voters in high-tax blue states. Could it mean a higher overall net tax liability? That is very unlikely, since those most affected by this would be of such an income context that they have almost certainly been subject to the AMT anyways, a tax atrocity that was already disallowing the state-tax deduction. But for those who were not previously in AMT but are fearful of losing the state-tax deduction, two things must be said. First, no one knows whatsoever how their net picture would turn out in the new tax law, because the income levels receiving the new tax rates (12 percent, 25 percent, 35 percent) have not been announced. Any attempt to model tax liability in the new system will be rank speculation.

Second, if a very small number of people end up paying more, not less, in the new system, it should have no bearing on what we believe about tax reform. I do not believe that will happen, and if it does, I think the net impact will be so small and affect so few, it will not even register. But even if it did, the fundamental question is whether or not residents of South Dakota and Texas should be footing the bill for a federal loss of revenue just because their states choose to run their affairs with a high degree of fiscal sensibility and wisdom. Tax reform is meant to reform what is broken, and the use of a state-tax deduction is discriminatory, unfair, and, worst of all, enabling. It enables high-tax states to make foolish decisions, to overly rely on highly cyclical income streams, to spend without regard to consequences, and to not factor in competitive realities across our cherished 50-state union.

The need of the hour is beneficiaries of the broken tax system to maintain advocacy for reform. The generation-long resistance to reform is a by-product of special interests and a mentality that replaces common-sense tax policy with gaming of the system. We can do better, and for those who know how badly this economy and our national fiscal situation need growth, we must.

David L. Bahnsen is a trustee at the National Review Institute, the managing partner of a bicoastal wealth management firm, and the author of forthcoming book, “Crisis of Responsibility.”

This article was originally published by the National Review

Kaepernick collusion claim hard to prove

A grievance filed by former 49ers quarterback Colin Kaepernick says his inability to find work, despite six solid seasons in the National Football League, is because of collusion against him by NFL owners — with President Trump’s encouragement — for kneeling during the national anthem to protest police violence against African Americans.

When a skilled professional athlete is suddenly and persistently unemployed while his former team flounders and rivals make do with less-accomplished reserves, blaming his status on a collective freeze-out does not seem far-fetched. But in the legal forum that will judge Kaepernick’s complaint, it can be extremely difficult to prove.

Just ask Barry Bonds.

After his last season with the Giants in 2007, the year he broke Hank Aaron’s career home run record of 755 on his way to final total of 762, Bonds went unsigned for 2008. He couldn’t get a taker even when he offered to play for the Major League Baseball minimum of $500,000, one-32nd of his previous salary. At the time, he was facing a federal indictment on charges of lying to a federal grand jury about steroid use, charges that eventually led to an obstruction-of-justice conviction that was overturned on appeal. …

Click here to read the full story from the San Francisco Chronicle

Katy Grimes explains why California is crumbling on the Jon and Ken Show

 

Katy Grimes smallKaty Grimes explains why/how California is crumbling – from its education system to its infrastructure to its massive deficits and overwhelming pension debt.

California is the state with the highest poverty rate in the nation, has $1 trillion in unfunded pension liabilities and recent criminal justice reforms have led to higher crime rates.

Click this link to hear Grimes explain why this has been allowed to happen, and what possible solutions, if any, Californians can look to in the future:

https://www.iheart.com/podcast/John-and-Ken-On-Demand-20635765/episode/1013-4pm-katy-grimes-28554992/?cmp=web_share&pname=fb&campid=s&keyid=428674646

Also check out the new book, “California’s War Against Donald Trump: Who Wins? Who Loses?” authored by Katy Grimes and James Lacy, to see who is winning, and losing, from all the political grandstanding and “resistance” by state leaders to the Trump administration.

Find the book on Amazon here:

https://www.amazon.com/Californias-War-Against-Donald-Trump/dp/1543112722/ref=sr_1_1?ie=UTF8&qid=1505161571&sr=8-1&keywords=katy+grimes

 

 

Trump is on track to win re-election

More than half of Americans don’t think Donald Trump is fit to serve as president, yet he has a clear path to winning reelection. If Trump isn’t removed from office and doesn’t lead the country into some form of global catastrophe, he could secure a second term simply by maintaining his current level of support with his political base.

We have entered a new era in American politics. The 2016 election exposed how economic, social and cultural issues have splintered the country and increasingly divided voters by age, race, education and geography. This isn’t going to change.

What have changed are the political fault lines that have driven the debate since the early 1980s. Until now, the ideological divides between the parties were largely differences around social issues, defense spending and trade, as well as tax cuts for the wealthy and corporations. Today, the central issue has become populism as voters have moved away from the two political parties and increasingly self-identified as independents. …

Click here to read the full article

California sues Trump to preserve Obamacare discounts

California Attorney General Xavier Becerra said Friday he is suing the Trump administration to block the president’s plan to end federal subsidies that are considered to be a critical component of Obamacare.

Becerra and attorneys general from 17 other states announced the lawsuit a day after the Trump administration declared that it would withhold cost-sharing subsidies that help low- and middle-income people pay for health care coverage under his predecessor’s signature law. Becerra called the order an attempt to “sabotage” Obamacare.

“Undermining the Affordable Care Act has been Donald Trump’s and many Republicans’ plans for a long time,” Becerra said. “It’s long past time that President Trump learned that he doesn’t get to just pick and choose which laws he’ll follow, and which bills he’ll pay.”

The head of the Covered California health exchange, Peter Lee, said Friday that Trump’s move could have “monumental” impact on premiums in the Golden State in 2019. …

Click here to read the full story from the Sacramento Bee

Poll: 70% support Trump’s immigration policies, want Americans hired first

As reported by the Washington Examiner:

Most Americans support President Trump’s immigration reform plans that aim to cut illegal entries and boost the hiring of legal Americans, according to a new survey just being circulated.

Despite charges from Democratic leaders like Sen. Chuck Schumer and Rep. Nancy Pelosi that the “vast majority of Americans” decry Trump’s America First focus, the new survey shows that many of the president’s policies are supported by 70 percent to 80 percent of the public.

And they reject the media’s description that the new White House list of immigration reforms issued Sunday night is “hardline.”

Said a Trump official, “The administration’s immigration priorities represent the mainstream view of the overwhelming majority of Americans.”

Late Sunday, the White House offered a list of demands in return for a deal that would let some 700,000 recipients of the Obama-era Deferred Action for Childhood Arrivals stay in the U.S.  …

Click here to read the full article

President Trump’s weekly address: 10/7/17

“When the worst of humanity strikes, the best of humanity responds.” – President Trump

 

Trump’s Incentive-Packed Tax Plan

 

Tax reformMuch as he did in his command performance before the United Nations, when he took back control of U.S. foreign policy, President Donald Trump has seized and energized the tax cut issue. Almost daily, he is pounding away on the themes of faster economic growth and more take-home pay, arguing that his plan will make America’s economy great again.

“Under my administration,” Trump just told the National Association of Manufacturers, “the era of economic surrender is over.”

The Trump plan would slash large- and small-business tax rates, double the standard deduction for middle-income folks, make the whole tax code simpler by eliminating unnecessary deductions, repeal the death tax and end the alternative minimum tax.

As usual, Democrats say the president’s plan is a handout to the rich. But in a recent speech in Indianapolis, Trump asked: Why can’t this be a bipartisan tax cut bill?

The argument that the U.S. is doomed to 2 percent or less growth — “secular stagnation” no matter what we do in terms of tax policy — is nonsense. Across-the-board tax cuts produced 5 percent annual growth during the JFK period. And after tax cuts were fully implemented in 1983, real growth averaged 4.6 percent for the remainder of Reagan’s presidency.

OK, let’s take one example from the Trump tax plan. Corporations today are taxed at 35 percent. That means, for every extra dollar of profit, a company keeps 65 cents. But the president has agreed on a 20 percent corporate tax rate. So, for the extra dollar earned, the private company would keep 80 cents.

On the individual side, the sleeper tax detail is the doubling of the standard deduction. This is a huge positive for young millennials (who don’t own much) and folks with no mortgages or homes. It puts more cash in worker’s pockets, simplifies the code and means that near 80 percent of taxpayers won’t have any deductions.

Slimming income-tax rates from seven to three brackets and cutting income-tax rates in general add even more supply-side incentives to the Trump package.

More money for rich people? Well, the not-rich family of four will be a lot better off with a $24,000 standard deduction. And the center-right Tax Foundation calculates that the bottom 80 percent of households get a lower tax burden, while the top 20 percent get a higher burden.

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