BREAKING:Deal Reached to Fund Government Through the Fall

The swamp monster will be fed. The deficit will continue to climb.

Congressional leaders have reached a deal to fund the government through fall sources tell NBC.

-RW 

UPDATE

This baby is going to explode the budget deficit.

From CBS:

The legislation, known as an omnibus spending package, is expected to fund the government through the rest of fiscal 2017, which ends September 30. Lawmakers are expected to vote on the comprehensive measure this week before funding runs out on Friday night.

The package does not include any funding for President Trump’s planned wall along the U.S.-Mexico border or a deportation force, according to a senior congressional aide.

In fact, the legislation specifically states that there cannot be construction of a new wall. The White House backed off of demand for wall funding last week after Democrats made it clear that they would oppose any bill that includes it.

Instead, it includes $1.5 billion for border security, which would cover technology and repairing existing infrastructure.

Senate Minority Leader Charles Schumer (D-N.Y.), said in a statement late Sunday that it’s a “good agreement” that “takes the threat of a government shutdown off the table.”

“The bill ensures taxpayer dollars aren’t used to fund an ineffective border wall, excludes poison pill riders, and increases investments in programs that the middle-class relies on, like medical research, education, and infrastructure,” he said.

The bill also does not fulfill the administration’s request for $18 billion in cuts for non-defense domestic programs, the aide said. CBS News reported earlier this month that negotiators were expected to ignore that request, partially because it’s so late into the fiscal year. Instead, the legislation includes spending boosts to domestic programs.

If approved by Congress, the National Institutes of Health (NIH), for example, would receive a $2 billion funding increase despite the president’s request to cut it.

Almost all of the Environmental Protection Agency’s (EPA) budget, 99 percent, is protected, according to the aide, even though the administration asked for a steep cut.

The deal delivers about half of Mr. Trump’s request for $30 billion more in defense spending. The aide said that it would include a $12.5 billion increase with the possibility of an additional $2.5 billion, which would be contingent on the administration’s strategy to fight ISIS.


It includes a permanent funding fix for retired coal miners’ health benefits, the aide said, as well as $295 million for Puerto Rico’s Medicaid shortfall. There are no funding cuts to Planned Parenthood in the package, the aide added, and it would restore year-round Pell Grants

UPDATE 2

Justin Amash tweets:

Another deal to grow government. Instead of compromising to cut spending, each side agrees to let the other side spend more. https://t.co/kezjj7LSkv

— Justin Amash (@justinamash) May 1, 2017

Austria Seeks to Tax Google Searches

Austria is seeking ways to make digital services like Alphabet Inc.’s Google or Facebook Inc. pay taxes for transactions with the nation’s internet users including internet searches, reports Bloomberg.

The Social Democrats’ plan has two other elements targeted at internet companies: It would extend the Austrian tax on advertising revenue to digital formats, and it would tax purely digital services that are acquired by Austrian customers from companies with no physical presence in the country.

“We need a new approach to make sure that taxes are paid where revenue and profit is made,” Andreas Schieder, the parliamentary head of Austrian Chancellor Christian Kern’s Social Democrats said.

Politicians will tax anything they believe they can get away with taxing.

The anti-tax Beatles warned about this.



If you try to search, I'll tax the words cause I'm the Taxman.

-RW 

Thank You Janet Yellen: Home Prices Up 98% Off 2008 Crisis Lows in San Francisco

Home prices are soaring as the Federal Reserve pumps huge doses of new money into the system.

The closer to a Fed monetary spigot a region is the higher the prices in that region with the greater Silicon Valley area (San Francisco) taking the lead.

The Wall Street Journal reports:

Some local markets have experienced extreme swings. Home prices in San Francisco have vaulted 98% from their low point during the bust and now stand nearly 7% above their earlier record in 2006 at the height of the previous housing boom.

In Dallas, home prices have risen by nearly 53% from their low during the recent bust and are now 35.5% above their previous high. In Denver, prices are now 59% above their previous lows and 36.5% above their previous high.

In some markets, bidding wars are breaking out.

 This is not what a recession looks like.

This will not end well, it never does, but the Fed manipulated boom continues in the boom phase of the Fed created boom-bust business cycle.

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WARNING Expect Deficits to Soar: Trump is Now in Favor of 'Priming the Pump'

During an interview with Fox news anchor Martha MacCallum, broadcast this weekend, President Donald Trump indicated that his tax cut plan will result in an expanding government budget deficit.

He is correct, given that he doesn't plan on shrinking government. Any cuts in one sector will be balanced by spending in other sectors, especially the military. If he doesn't balance dollar for dollar one tax cut with an increase elsewhere the difference will be made up by an increase in the budget deficit and that is exactly where he is going.

He said during the interview:

 I will tell you this. Look we are doing, we just put in I think a great tax proposal the economy is going to boom and you'll see that it'll take a period of time and you're going to have some deficits in the meantime it's sort of called priming the pump you have to prime the pump... we are essentially at 1% GDP and we're  supposed to be happy about it, no we have to prime the pump.

This idea that government spending will somehow boost the economy is complete Keynesian nonsense. 

Government spending does nothing but take funds away from the private sector, It can occur via taxes or via government borrowing which crowds out private sector borrowing.

Trump is unlikely to be aware of it but the term "priming the pump" traces back to the policies of Herbert Hoover.

Specifically, pump priming is the action taken to stimulate, from a Keynesian-type aggregate demand perspective, an economy through increases in government spending, and interest rate and tax reductions.

The term "pump priming" is derived from the operation of older pumps; a suction valve had to be primed with water so that the pump would function properly.

 According to Investopedia, the phrase "pump priming" was originally used during the Herbert Hoover presidency:

The phrase originated with President Hoover's creation of the Reconstruction Finance Corporation (RFC) in 1932, which was designed to make loans to banks and industry. This was taken one step further by 1933, when President Roosevelt felt that pump-priming would be the only way for the economy to recover from the Great Depression. Through the RFC and other public works organizations, billions of dollars were spent "priming the pump" to encourage economic growth.

The theory that government spending is required to "stimulate"an economy has been shown faulty by Austrian school economists. (SEE:  The Failure of the New Economics by Henry Hazlitt), Pump priming does nothing but distort the economy, pulling money away from consumers and entrepreneurs and placing it in the hands of politicians and bureaucrats,

It is the suffocation of an economy.

-RW 

Charles Koch Rips Donald Trump But...

Charles Koch

Multibillionaire Charles Koch took to the pages of the Jeff Bezos rag to rip President Trump.

In the Washington Post op-ed, he singled out some of the plusses of the Trump administration:

 On the plus side, the president has taken a thoughtful approach to regulatory reform. He has appointed a strong team capable of acting on the best ideas to remove unnecessary regulations that undermine innovation, competition and opportunities for those who need them most. I also applaud the president’s selection of Neil Gorsuch for the Supreme Court. With a career of prioritizing the Constitution over political gamesmanship, the new justice will be a critical voice of properly applied constitutional law.

But he then quickly turned to ripping the heart of Trump policies:

The NFL Draft and the Division of Labor

By Doug French

On Friday, the second-most-popular televised football broadcast of the year took place from New York's Radio City Music Hall. ESPN  broadcast round one of the NFL Draft, with the remaining rounds to be broadcast on Saturday. An estimated 40 million people will watch the draft, an event that even for the most interested fan moves at a snail's pace.

"We all thought, way back when, how can this become the most watched non-movement sporting event in professional sports?" former NFL executive Carl Peterson says. "That's what it is. Nobody's moving. We're just drafting. Now it's prime time. Thursday night!"

The draft has come a long way since beginning in 1936, when teams selected players based on rumors and gut feelings. Now the business of drafting is big business, and the business of scouting and projecting what teams will pick which players is equally big.

In 1979, the brand new ESPN petitioned the league to televise the draft live. The network was initially turned down by a unanimous vote of the league owners. But ESPN persisted, and in April 1980, the cameras rolled as Oklahoma running back Billy Sims was selected first by the Detroit Lions on an early Tuesday morning.

But it was one man's work that provided the inspiration to televise the draft, leading to an entire industry that revolves around pro football's spring ritual.

Think Twice before You Find Fault with Modernity

By Robert Higgs

Modernity has never lacked for critics, people who see only regression from a nobler or more glorious past when men were men and women liked them that way. But for the economic or cultural historian, such an outlook is the sheerest balderdash.

If I had lived a thousand years ago, I would almost certainly have scratched out a precarious living, constantly on the edge of starvation, chronically ill, and culturally embedded in an inescapable wasteland of vicious error and destructive superstitions. I would never have thrilled to a song by Handel, a concerto grosso by Bach, a symphony by Beethoven or Brahms. I would never have watched any of Shakespeare’s plays or read any of his poetry. I would never have encountered even the intellectual gems that existed in the works of Aristotle or the classical Greek dramatists, never have learned Euclidean geometry, never have met with the ancient contributions to astronomy, because I would almost certainly have been illiterate and too far removed from any place that harbored learned people. And in those days, before the development of printing with movable type, the only means of spreading existing knowledge remained as always before the laborious copying of existing works by hand and the slow passage of copies from hand to hand. In short, life would have been poor, nasty, brutish, and short, even if not solitary.

People who glamorize the remote past practice a highly selective filtering of gold from a mountainous mass of ugly, toxic dirt. Life was hard even for those who sat in luxury above the masses and exploited them. They knew nothing of bacteriology; their children died in droves. The masses worked against heavy odds to extract enough from the soil to make their survival possible, and many failed to meet the test. Even if one doesn’t like industrialization and its consequences, one cannot escape the reality that what preceded modernity was materially, intellectually, and culturally close to zero for nearly everyone. Something is surely amiss when modern critics, enjoying all the material comforts and conveniences as well as the cultural amenities available at the push of a button, venture to dismiss modernity as if it were something even one in a thousand of them would give up.

The above originally appeared at the Independent Institute.

In 60 Seconds David Stockman Tells Us How He Would Reform Washington

A good start, from the former director of the Office of Management and Budget under Ronald Reagan, David Stockman. This is what a serious anti-big government guy sounds like:

Here, in 60 seconds, is how I would reform Washington: pic.twitter.com/bbtXZBaWVH

— David Stockman (@DA_Stockman) April 28, 2017

-RW 

Why Politicians Dominate in a Socialist Society

By Hans-Hermann Hoppe

Socialism leads to the politicization of society. Hardly anything can be worse for the production of wealth.

Socialism, at least its Marxist version, says its goal is complete equality. The Marxists observe that once you allow private property in the means of production, you allow differences. If I own resource A, then you do not own it and our relationship toward resource A becomes different and unequal. By abolishing private property in the means of production with one stroke, say the Marxists, everyone becomes co-owner of everything. This reflects everyone’s equal standing as a human being.

The reality is much different. Declaring everyone a co-owner of everything only nominally solves differences in ownership. It does not solve the real underlying problem:  there remain differences in the power to control what is done with resources.

In capitalism, the person who owns a resource can also

Will Trump’s Tax Plan Turn ‘Everyone and Their Dog’ Into an LLC?

Under the headline, "Trump’s Tax Plan Could Turn ‘Everyone and Their Dog’ Into an LLC,"  David Kocieniewski writes at Bloomberg:

The Trump administration’s proposal to slash the tax rate on partnerships and limited liability companies could set off a stampede of individual taxpayers trying to reclassify themselves as so-called pass-through businesses in order to take advantage of the savings, according to tax experts.

He is correct. It would drive many taxpayers to try to reclassify themselves as pass-through entities since Treasury Secretary Steve Mnuchin said at Wednesday's briefing on Trump's tax reform proposal that pass-troughs would be taxed at the 15% corporate rate.

So a high net individual would try and push as much of his earned income into a pass through with the 15% tax rate versus a personal tax rate as high as 30% plus.

But a Treasury official I spoke to called Mnuchin's comment a "Trump tax fart."

Muchin and  Director of the National Economic Council Gary Cohn were ill prepared for the briefing they held in the tax reform. It was in response to a Trump comment just a couple of days earlier that a tax reform plan was going to be announced. They rushed to put something together and they weren't fully prepared.

Mnuchin and Cohn kept the briefing as thin on details as possible becasue they didn't have any and didn't want to step on any land mines.

But Mnuchin did "fart" with his pass-through comment.

Bottom line: According to my man at T, the idea of a pass-through rate of 15% for all pass through entities is already gone with the wind.

-RW 

The TV Personality Behind the Big Government Tax Proposal That the Trump Administration Announced on Wednesday

The thin on details tax proposal announced on Wednesday by Treasury Secretay Steve Mnuchin and  Director of the National Economic Council Gary Cohn appears to have been spurred on by CNBC commentator Larry Kudlow and his Krew.

Here's The Washington Post with the details (don't for a minute ignore the fact that Arthur Laffer's name is in the mix):

Why Trump Buckled on Withdrawing From NAFTA

The Wall Street Journal provides a play-by-play:

President Donald Trump was prepared to end the North American Free Trade Agreement deal, which had governed trade relations for the past 23 years, with a dramatic announcement Saturday at a Pennsylvania political rally marking his 100th day in office.

As rumors spread of the possible action, Mexican President Enrique Peña Nieto called the president urging him not to pull out of the accord. “Let me think about it,” Mr. Trump said. Within a half hour a call came in from Canadian Prime Minister Justin Trudeau with a similar request.

After the talks, Mr. Trump was

Seattle Socialist Calls for Shutting Down Highways and Airport on May Day

Kshama Sawant

Socialist Seattle City Councilmember Kshama Sawant is calling for Seattle activists and workers to shut down Seattle highways and the Seattle airport on May Day.

According to Sawant, 59 organizations have joined Seattle’s May 1st Action Coalition to call for a day of mass protest on May Day.

On April 24, 2017, the Seattle City Council unanimously passed a resolution brought forward by the May 1st Action Coalition, the Coalition of City Unions, immigrant rights activists, and Sawant, proclaiming that the City of Seattle workers have the right to take the day off on May 1, 2017 without retaliation.

 The resolution further asks that all City departments inform every non-emergency worker that they have this right to request the day off to attend May Day celebrations.

The Washington State Patrol warned May Day protesters to not block interstates, calling it “dangerous and irresponsible behavior that could cause serious and/or fatal injuries.”

“The freeways are no place for protests, and calls for protestors to block the freeway system is simply reckless and irresponsible. The WSP and our partner WSDOT go to great lengths to keep the freeway system flowing.  This is not about politics, this is about public safety.  To that end, we will continue to work with our law enforcement partners to safeguard the rights of peaceful protestors, but will not tolerate any interference with blocking the freeway system,” said Washington State Patrol Captain Ron Mead in a release.

-RW 

Trump: ‘We May Terminate’ U.S.-South Korea Trade Agreement

President Donald Trump threatened to terminate the U.S. trade agreement with South Korea in an interview Thursday night with the Washington Post, declaring that the five-year-old accord was “a horrible deal” that has left America “destroyed.”

“It’s a horrible deal. It was a Hillary Clinton disaster, a deal that should’ve never been made,” Trump said. “It’s a one-way street.” Once again demonstrating that he has no understanding of the benefits of even unilateral open trade.

South Korea is the United States’ sixth-largest goods trade partner, and the U.S. goods trade deficit with Korea was $27.7 billion last year, according to the Office of the U.S. Trade Representative.

In other words, Americans love buying South Korean products and Trump wants to slow the flow of the products.

“We’ve told them that we’ll either terminate or negotiate,” Trump said. “We may terminate.”

The president explained that the process of termination of Korus is simpler than with the North American Free Trade Agreement. “With NAFTA, we terminate tomorrow; if we did, it ends in six months. With the Korean deal, we terminate and it’s over.”

Trump added: “I will do that unless we make a fair deal. We’re getting destroyed in Korea.”

-RW 

HOT SPECULATION: Trump Could Replace Yellen at the Fed With Former Goldman Sachs President

Gary Cohn, the next Fed prez?

Should President Donald Trump choose to replace Fed Chair Janet Yellen, or if she would leave on her own, former Goldman Sachs president Gary Cohn could be the leading replacement.

That's crony Wall Street insider speculation according to CNBC.

Cohn currently is Trump's top economic adviser and serves as head of Trump's National Economic Council.

"The buzz among those who claim Cohn confides in them is that he would like to eventually replace" Yellen, assuming Trump decides to move in a different direction when the chair's term ends in early February, Beacon Policy Advisors said in its daily report for clients Tuesday.

"On paper, Cohn likely meets Trump's expected top two requirements for a Fed chair candidate," the Beacon analysis said, specifically citing Cohn's advocacy for deregulation and his likelihood to keep interest rates low.

"He's the leading contender," said Christopher Whalen, an insider in the banking world and currently head of Whalen Global Advisors. "Every Fed chairman in recent memory going back even to (Paul) Volcker went through the White House in one way or the other. ... It would certainly make sense."

Other potential candidates, according to CNBC, are Kevin Warsh, Thomas Hoenig and John Taylor.

I would scratch Taylor from the list, Trump is in favor of money pumping and he is not going to put at the head of the Fed a guy like Taylor who would be in favor of instituting a "monetary rule," which would limit the Fed's ability to dramatically lower interest rates.

-RW 

Some of the Tax Deductions That Would Be Eliminated Under Trump's Tax Reform Proposal

Most of President Trump's tax proposal is a shifting of the point of taxation (With a good dose of Laffer curve voodoo). The headline reduction in tax rates are accompanied by the elimination of many tax deductions.

Here are some of the deductions that will be eliminated:

Home office deductions

Business travel-related deductions:
These expenses include business travel away from home, business use of your car, business meals and entertainment, business travel,

Education expenses for your profession

Tools of your profession, e.g. a carpenter's hammer, a home computer

State and local taxes

 Student loan interest

Some health expenses

Gambling losses

Alimony

Theft deductions

(via MarketWatch)

Former Treasury Secretary Summers: I would have quit rather than announce the absurd Trump tax proposal."

President Donald Trump's plan to roll back taxes in the hope that doing so will generate robust economic growth with little impact on debt and deficits is "absurd," former Treasury Secretary and White House economic advisor Larry Summers said.

In fact, Summers added in an interview with CNBC, had he been asked to present such a plan with the notion that it would pay for itself, he would have refused.

"If I had been asked by the White House to assert a proposition as demonstrably false as the claim that this plan would produce revenue, I would have resigned rather than put the credibility of the department behind a proposition that no one with real experience would believe was true," he said.

Trump really needs to shrink government, which he is not going to do. Thus his tax reform proposal is based on \the shaky Laffer curve notion put on steroids.

Murray Rothbard warned about the dubious Laffer Curve:



Once again, compared to Trump, the generally weak[policy analyst Summers looks like a serious economic commentator.

"Most presidential campaigns during the primaries, when they put out a tax plan, they put out more than one page. They put out some analysis, some models, some careful articulation of the proposal and estimate its effects," he said.

"There's none of that coming from the administration, and yet there's this confident statement that it will pay for itself," Summers added. "I don't know how they could possibly know without having done economic work."

"I just don't understand what could cause an administration to put its secretary of the Treasury in a position to assert something ... that is generally regarded by economists as absurd," he added.

-RW 

Cato Beltarian Technocracy in Action: Comes Out Against Trump Tax Cuts

Murray Rothbard famously said that all tax cuts are good tax cuts. This is not the view at the Cato Institute.

Chris Edwards, the director of tax policy studies at Cato, in an analysis of President Trump's tax proposal objects to the most significant tax cuts in the proposal and also calls for the elimination (or reduction) of some deductions that Trump leaves on the table.

From conversations I have had with people on the Hill, I seriously doubt that the tax cuts in question will actually end up in a reformed tax code. But this is not the point of my objection to the Cato analysis. The serious problem is that the Edwards analysis is not looking at the proposal from a free market, limited government, low tax perspective. It is rather looking at the tax proposal from the view of a beltarian technocrat.

The most significant tax cut in the Trump proposal is the reduction in the pass-through tax rate to 15%. This would be a major reduction in the tax rate for individuals who use LLCs, subchapter S corporations, etc. who now may pay as much as 35% plus.

It does not appear this cut will make it into any final tax reform bill, bwhywht would any libertarian object to such a cut?

But Edwards does object to the cut. He writes:

Cutting the tax rate on “pass-through” businesses to 15 percent, however, is a mistake. Policymakers should aim to equalize the overall rates on income earned by each type of business. So if the corporate rate is 15 percent, corporate income would face a combined tax rate of 15 percent plus the individual dividend rate of, say, 15 percent under tax reform, for a total of about 28 percent (0.15+0.85*0.15). Thus, the top rate on pass-through income should be cut to the same 28 percent.

Well, how about calling for "equalization" by advocating cutting everyone's taxes be cut to 15%?  Wouldn't that be moving more in the direction of less tax than calling for an increase in proposed pass-through tax to 28%? Why is the head of tax policy at a so-called libertarian institute calling for tax increases above those propsed?

Then Edwards comes out in support of the elimination of the tax deduction for state and local taxes. He writes:

Eliminating itemized deductions—such as the state/local tax deduction—is a good reform.

What the hell is small government, low taxes about this? It would increase the federal tax burden significantly in high tax states compared to other states? Why would you want to increase this burden if you are a libertarian?

It gets worse, in the analysis, Edwards calls for the elimination, or at a minimum a cap, on the mortgage interest rate deduction:

[W]e should also eliminate, or at least cap, the mortgage interest deduction.

This, of course, would do nothing but raise the tax bill for homeowners who have a mortgage and itemize their deductions.

The Edwards analysis is a beltarian horror.

More than any other piece coming out of Cato, this analysis of the Trump tax reform proposal exposes Cato as simply an inside the Beltway institution providing the government with technocratic fixes to keep the vast government operation going without any serious concern about really shrinking government or the overall tax burden of every American.

It is positively bizarre for a so-called limited government advocacy institution to call for higher taxes and the elimination of deductions.

-RW 

Trump Decides Not to Withdraw from Nafta

Donald Trump has decided not to pull the US out of the North American Free Trade Agreement, agreeing instead with his Canadian and Mexican counterparts to “proceed swiftly” with negotiations to update the deal, according to the White House.

According to the Financial Times, the move came in hastily arranged calls between the three leaders after news leaked that the White House was considering unveiling an executive order on Saturday that would have laid the groundwork for a US withdrawal.

In a statement, the White House said Trump had agreed with Mexico’s Enrique Peña Nieto and Prime Minister Justin Trudeau of Canada in separate calls on Wednesday to pursue the “renegotiation of the Nafta deal to the benefit of all three countries”.

“It is my privilege to bring Nafta up to date through renegotiation,” the statement quoted the president as saying. “I believe that the end result will make all three countries stronger and better.”

Since Trump has no understanding of the basics of free trade and is a mercantilist and protectionist do not expect anything positive out of these negotiations. It will be the most powerful US, Mexican and Canadian crony exporters that will gain at the expense of consumers.

In an interview with Bloomberg, Canada’s foreign minister Chrystia Freeland said on Wednesday: “When it comes to Nafta, we are ready to come to the table any time.” 

In an interview with the Financial Times, Ildefonso Guajardo Villarreal, Mexico’s economy minister, said his government was consulting with Washington and conscious of the new president’s desire to bring manufacturing jobs back to the US. “We are trying to work with his team,” he said. 

There are no such negotiations required for real free trade, only for crony trade.

Real trade could be outlined in two sentences: Let there be trade. The borders are open to goods manufactured elsewhere.

-RW 

Stockman Slams Trump's Tax Plan

The former OMB director under Ronald Reagan, David Stockman, is correct, Trump's plan is fantasy.

This is the best analysis of Trump's tax reform proposal and why it doesn't make any sense.

The numbers don't come anywhere close to adding up and nothing close to it will pass Congress.

 -RW 

White House to Keep Paying 'Unconstitutional' Obamacare Cost-Sharing Subsidies

Donald Trump just buckled big time on Obamacare.

The White House is telling lawmakers that it will continue paying Affordable Care Act cost-sharing subsidies, reports Politico.

Nancy Pelosi is ecstatic releasing a statement saying that "progress has been made."

Notes Politico, " some Republicans slammed the White House decision, saying it undermines the party's position in an ongoing lawsuit that the payments are unconstitutional."

The subsidies currently amount tp approximately $7 billion yearly.

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The Trump Tax Reform Scam is On: All Deductions Beyond Mtg Interest and Charitable Contributions Will Be Eliminated

Treasury Secretay Steve Mnuchin

Treasury Secretay Steve Mnuchin and  Director of the National Economic Council Gary Cohn have just announced the new proposed Trump tax reform.

Based on the outline by the two men, the proposal calls for a corporate tax that would be lowered to 15% from 35% and a lowering of the capital gains tax to 20%. It also calls for the elimination of the estate tax and a 35% top tax rate for individuals, down from today’s 39.6% rate. Lower brackets would be set at 10% and 25%,

The proposal includes roughly a doubling of the standard deduction that Americans can use to reduce their taxable income. The deduction for married couples would move from $12,600 to $24,000.

However, the proposal also calls for revenue generators. All individual deductions on personal taxes outside of the mortgage interest deductions and the charitable deduction expenses will be eliminated.

Most significant, the proposal calls for the elimination of deductions for state and local taxes from reportable income for individuals.  

This will especially hurt residents of high-tax states such as New York, New Jersey and California.

.Eliminating the state deduction could raise more than $1 trillion over a decade, reports The Wall Street Journal. This is one way Trump will sneak in shady tax increases.

The devil will be in these type of details. Without any net decrease in government spending under Trump, tax cuts will have to be funded by different tax increases, such as the elimination of tax deductions, and an expanding government budget deficit. Mnuchin and Cohn were noticeably vague on the details of the tax proposal. Always focus on where the scammers don't want to focus to understand what the deal is really all about.

Bottom line:  The tax reform scam is on. Expect more hidden taxes. a lot via border taxes, and the crowding out of private sector borrowing.

Trump's "reform" will do a lot to suffocate the economy.

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HOT Trump Considering Withdrawal From NAFTA via Executive Order

The Trump trade insanity continues.

The Trump administration is considering an executive order withdrawing the U.S. from NAFTA, reports Politico.

A draft order has been submitted for the final stages of review and could be unveiled late this week or early next week, according to Politico sources.

Crazed anti-trade adviser Peter Navarro, the head of Trump’s National Trade Council, drafted the executive order in close cooperation with White House chief strategist Steve Bannon, another bizarre nationalist anti-trader.

Note: NAFTA is a crony trade deal. However, crony trade is better than no trade. If Trump issues this executive order, it would be to limit trade even more. SEE: Free Trade, No Trade, Crony Trade and Trump Trade

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ESPN to Cut 100 High-Paid On Air Talent This Week

Walt Disney Co.’s ESPN network will cut about 100 staffers this week, reports Bloomberg.

ESPN President John Skipper, in a memo to staff Wednesday, said the network has been determining whom to cut from a pool of higher-paid, on-air talent, which includes anchors, analysts, reporters, writers and those who handle play-by-play. The company has 8,000 global employees.

It should be noted that this is not a business cycle event.

ESPN's slant toward politically correct broadcasts has hurt viewership as well as the availability of online sports clips and news online.

-RW 

Robber Stretches Before Holding Up a Dunkin' Donuts

Not the way the Fed does but still interesting.

Philly robber seen stretching in Dunkin' Donuts parking lot before holding up the store & robbing them of cashpic.twitter.com/PeBeFZdRqO

— Breaking911 (@Breaking911) April 25, 2017

Trudeau Blasts Trump on Newly Imposed Trade Tariffs

Canadian Prime Minister Justin Trudeau and President Donald Trump spoke over the telephone Tuesday evening to discuss the brewing trade war between their two countries.

Trudeau told Trump that “Canada will vigorously defend the interests of the Canadian softwood lumber industry,” according to a release from his office.

On Monday, Trump announced the United States would impose tariffs of up to 24 per cent on Canadian softwood lumber, a move that affects some $5.66 billion worth of imports of the construction material.

Anti-dumping duties to be announced June 23 could raise the total to as much as 30 to 35 per cent.

The prime minister is said to have “refuted the baseless allegations by the U.S. Department of Commerce and the decision to impose unfair duties,” during his conversation with Trump, according to the statement.

Reporters asked Trump Tuesday if he was fearful of a trade dispute with Canada. He responded by once again displaying his economic ignorance on trade matters..

“No, not at all,” he responded. “They have a tremendous surplus with the United States. Whenever they have a surplus, I have no fear.”


“The prime minister and the president also discussed Canada-U.S. trade in dairy products, trade which heavily favours the U.S.: Canada imports over $550 million of dairy products from the U.S., but exports just over $110 million to the U.S.,” the statement from the PMO said. Trudeau also let Trump know that he would continue to defend Canada’s dairy sector as well.

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Trump Is Said to Abandon Border Tax

 The Trump administration has dropped any support for a so-called border adjustment tax on imports, reports Kate Kelly for The New York Times.

The tax was intended to be the keystone of a tax "reform" proposal developed by Republican leaders in the House of Representatives. But it faced immense pushback from influential companies including Walmart and Toyota.

If enacted, a border adjustment tax would have effectively imposed significant levies on billions of dollars of imported goods. Retailers in particular would have been hard hit, as products ranging from tires to T-shirts, which are imported from overseas, would have suddenly cost more. Automakers and other manufacturers that rely heavily on foreign parts and supplies would have also been hit.

Since Trump is about to announce on Wednesday cuts in corporate taxes and individual taxes without any cuts in net government spending, it remains to be seen how he will fund the new gap.

It is possible he could sneak in other taxes, allow the budget deficit to explode or generate revenue from imports on an ad hoc basis via tariffs.

It's possible it will be a combination of all three.

-RW 

OMG Trump's Tax "Reform" Is Going to Be Politically Correct Tax "Reform"

Ivanka Trump who, as I have noted,  does not appear to fall deep on the right side of Charles Murray's bell curve and is on the bandwagon of every politically correct cause, just told an audience in Berlin that childcare "is going to be part of comprehensive tax reform."

Trump's government influencing childcare, I just can't wait.

As if the creation of urban primitives by government policy isn't enough madness.

-RW 

It's A Very Good Thing For Us, We Need More of It: Understanding the Nature of Foreign Government Subsidized Imports

At the post, IT BEGINS: Trump Launches His Asinine Protectionist Trade Policy With Some Mega Tariffs, in the comment section Paul Hansen asks:

What is the Austrian perspective about the domestic companies that are forced out of business by competing against international companies that are subsidized by their own governments? I understand that the US consumer benefits with lower prices, but if this is done on a wide enough scale, wouldn't the resulting unemployment be a problem?

Here's the thing, any time goods come into a region at a cheaper price

Le Pen Planned Path to Victory Will Include an Attack on Free Markets

Marine Le pen

The Financial Times reports:

Europe is delighted, the markets are reassured and the French establishment is showing renewed confidence that will not become president of France. But the far-right National Front still sees a path to victory on May 7.

Ms Le Pen plans to step down as head of the FN in an attempt to look more presidential, but the party apparatus will continue to run her campaign. Senior FN officials say they plan to make the next two weeks a “clash of civilisations” between the winners and losers of globalisation, between the “elites” supporting independent centrist Emmanuel Macron and “patriots” supporting Ms Le Pen.

David Rachline, the FN campaign director, says there are more voters who have suffered than have gained from the free market and pro-European policies advocated by Mr Macron.

As I have reported, Marcon wants to raise defense spending to two percent of GDP, up from the current figure of 1.8 percent. Also, he wants to build 15,000 new prisons and hire 10,000 new police officers.

In addition, he recently said

IT BEGINS: Trump Launches His Asinine Protectionist Trade Policy With Some Mega Tariffs

The Trump administration, led by the economically illiterate Donald Trump, is about to announce its first tariffs, which are likely to be the first of many, but these tariffs are whoppers.

U.S. Commerce Secretary Wilbur Ross said on Monday his agency will impose new anti-subsidy tariffs averaging 20 percent on Canadian softwood lumber imports.

Speaking to Reuters by phone a day ahead of the expected announcement, Ross said that the duties would affect $5 billion worth of softwood lumber imports from Canada.

"It's about 31.5 percent of the total U.S. market, so it's a pretty big deal in terms of the Canadian relationship," he said.

A Commerce Department fact sheet on the pending announcement seen by Reuters shows that

Tax "Reform" Sitdown on Capitol Hill Tuesday Evening

CNBC Washington DC correspondent  Ylan Q. Mui reports that White House officials will head to the Capitol on Tuesday evening for a meeting on tax "reform."

Those scheduled to be at the meeting include Treasury Secretary Steve Mnuchin,  Director of the National Economic Council Gary Cohn, House Speaker Paul Ryan, Majority Leader Mitch McConnell, Senate Finance Committee Chairman Orrin Hatch and House Ways and Means Committee Chairman Kevin Brady.

There is no way anything good comes out of tax "reform" with this gang designing it.

They will make crazy government revenue projections (dynamic scoring) that will balloon the deficit and, with the rest of the reform, they will shift taxes around so the taxes will be more difficult to see and understand and proclaim tax "cuts," but it will be a multi-layer scam.

-RW 

Is China Using N.Korea to Derail Trump’s Protectionist Trade Agenda?

This is a very interesting take from Dick Morris.

Of course, there should be no trade barriers between the US and China (or any other countries for that matter.

 -RW 

Campus Collectivism and the Counter-Revolution Against Liberty

Richard Ebeling emails:

Dear Bob,

I have a new article on the website of the Future of Freedom Foundation on, "Campus Collectivism and the Counter-Revolution Against Liberty."

Numerous accounts have, now, appeared in the press about the aggressive intolerance against various invited speakers on American college and university campuses by “progressives” and more radical leftists determined to shut down any and all views different from their definition of the “politically correct.”

What should also be appreciated is that this is a continuation of the collectivist rejection of the Western values of individual liberty, private property, rule of law, free association and competitive capitalism.

What we are seeing is the latest mutations and variations on the century-old Marxist critique against the free and open society. Instead of “class conflict” between capitalist owners of the means of the production and their property-less workers, the focus is on racism, sexism, and general social injustice but from the same type of conceptual template as used in earlier decades by Marxists and traditional socialists in general.

Now the enemies of the global “masses” of women and “people of color” are the male, white and capitalist exploiters of humankind. The history of humanity, it is said, is a history of white racist oppression of other racial and ethnic groups and the female members of all societies.

History has been rewritten to ignore the fact that slavery, besides being one of the oldest of human institutions, has been one of “equal opportunity.” That is, through the ages people have conquered and enslaved those defeated in battle regardless of their racial or ethnic background, everywhere around the world.

The modern revolt against and abolition of slavery began in Europe, and especially in Great Britain, where the emergence of the classical liberal ideal of individual rights to life and liberty rejected the notion of some human beings being held in bondage by others, including black Africans owned and abused by white masters. This set in motion the anti-slavery movement that formally brought an end to slavery by the end of the 19th century.

Likewise, it was the rise of classical liberalism in Europe, with it emphasis on an equality of individual human rights, that set the stage for the end to the oppression and limits on the social and economic liberty of women. Indeed, it was the freeing of markets from government controls, particularly starting in the 19th century, that opened the door for women to have the freedom to make their own living, enter into their own contracts, and determine who or when to marry (rather than have these things dictated by fathers and husbands, as in pre-capitalist, classical liberal society).

Instead, this “inconvenient history” that it has been philosophical individualism and free market capitalism that has formally liberated humanity from slavery and reduced if not ended abuses of women in many parts of the world, has been erased from college classrooms in the same way that Stalin had purged and murdered people airbrushed out of photographs with him.

The totalitarian tendencies of tyrants of campus political correctness threaten the remaining foundations of a free society. They must be opposed at every turn through the power and uses of reason, reality and determined defense of liberty.

http://www.fff.org/explore-freedom/article/campus-collectivism-counter-revolution-liberty/

Best,
Richard

FDR's Wacky First 100 Days

Here’s a Don Boudreaux letter to NPR:

Regarding today’s report on the first 100 days of the terms of various U.S. presidents, I dare say that your happy description of Franklin Roosevelt’s is potted (“The ‘First 100 Days’ Presidential Benchmark Goes Back To FDR And Napoleon“).  Writing in 1939 in the Yale Review, John T. Flynn had a different and more realistic take on the start of FDR’s presidency:

“It was a hodgepodge of good intentions, of bold promises and glittering hopes – a desire to produce recovery, to create abundance while at the same time causing scarcity to get prices up; to help labor, to help the little business men and to help the big business men – all save a few who behaved badly to Mr. Roosevelt personally; to spend as much as possible and to tax as little as possible; to boost prices but not to diminish purchasing power; to raise wages and profits, too; to save the farmer, to save the railroads, to save anybody who could be saved with a subsidy; to make everybody happy and win everyone’s good opinion and, in the process of doing this, to adopt any idea which was presented by anybody with a friendly face and which seemed at a glance to have a chance to work.”*

Indeed.

It’s no wonder that the Great Depression lasted well beyond the end of the 1930s.  What is a wonder is that history has treated New Deal policies so uncritically and kindly.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA  22030

* John T. Flynn, “Mr. Hopkins and Mr. Roosevelt,” The Yale Review, June 1939; reprinted in Forgotten Lessons: Selected Essays of John T. Flynn, Gregory Pavlik, ed. (Irvington, NY: Foundation for Economic Education, 1996), pp. 37-46.  The above quotation appears on page 42

The above originally appeared at Cafe Hayek.

The Anti-Science “March for Science”

By Thomas DiLorenzo

The latest sign-carrying, slogan-shouting, leftist mob to clog the streets of Washington, D.C. in a “march for science” is in reality a march against science.”  These are the global warming nutcases, the overwhelming majority of whom have no education or credentials whatsoever in “science” of any kind.  They are the useful idiots of the Democratic Party puppet stringpullers like George Soros, Hillary Clinton, John Podesta, etc.  They want to “save the world” with huge carbon taxes that would skyrocket the prices of gasoline, electricity, natural gas, every product that utilizes petroleum products in its production, etc., which would be especially cruel to “the poor” whom they always claim to be speaking for.

Besides that, the premise of this latest leftist “march” is quintessentially anti-science.  The science of global warming is “settled,” they say. That is the theme of the whole “march.”  But to real scientists nothing is ever “settled” because most scientific studies are based on statistical analysis, and statistics is based on the study of probabilities.  That’s why even your doctor is never 100% sure of most of the advice he or she gives you; his advice is based on probabilistic studies in the medical field that he learned of in medical school or in his continuing education.  Furthermore, the world is constantly changing, so that statistical relationships that existed years ago are often vastly different today.  In the field of economics, for example, the simplest of concepts — elasticity of demand — is studied by observing, historically, consumer demand responses to changes in prices.  A particular relationship that held in the past (a 30% increase in purchases of a product for every 10% price cut, for example) says nothing about that same relationship in the future.  New substitute or complementary products are constantly coming onto the market or leaving the market, which changes all of those relationships.  Estimates of the elasticity of demand for a product or service do not “settle” anything, not to mentio far more complex economic relationships.  The same is true of climate science and all other sciences.

In other words, the “march for science” is just another mob of ignorant leftist loudmouths who want to enslave us all even more than we already are with huge new economy-destroying/unemployment-generating taxes and Soviet-style central planning of the economy in the name of “saving” Mother Earth.  If they were really interested in helping the planet out, they would have spent their weekend picking up trash on the streets of D.C. instead of generating tons of it.

The above originally appeared at LewRockwell.com.

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BREAKING French Nationalist Le Pen Makes It To Run Off Election

Marine Le Pen

Exit polls indicate that in today's presidential election in France, former investment banker Emmanuel Macron and National Front candidate Marine Le Pen will qualify for the second round runoff in France's presidential election to be held on May 7.

Early indications are that the independent, establishment, pro-globalisation candidate Macron will win the runoff--unless the far left moves to  far right Le Pen against the establishment Macron/

-RW 

UPDATE 


Benoit Hamon—the Socialist Party candidate who gained only 6% of the vote in today's ele—has just announced his firm runoff support for Macron.

UPDATE 2

French Presidential Candidate Emmanuel Macron in Profile: here.