Monday, July 3, 2017

The Crony Three Plot Tax Reform

The former Goldman Sachs now Trump administration mechanics are plotting a new tax scheme.

So you think President Trump's administration is about shrinking government?

Steve Bannon, one of Trump's top advisers, has told colleagues he wants the top income tax bracket to "have a 4 in front of it," according to Axios. (The top bracket is currently 39.6%).

It is a plan to apparently balance out the tax cuts he wants to see for the middle class. In other words, it is not about shrinking government but about switching the tax burden.

According to Axios, Trump economic adviser Gary Cohn and Treasury Secretary Steven Mnuchin are also now considering tax cuts but their cuts would result in an increase in the deficit. That is, their scheme would also not mean a cut in government spending but simply a shift in the way the money is grabbed from the private sector.

An increase in the deficit would mean a crowding out of private sector borrowing (thus shrinking the productivity in the economy) or the Fed printing money to absorb the deficit (thus distorting the capital structure of the economy and putting upward pressure on prices) or a combination of both.

Bottom line: Bannon, Cohn and Mnuchin are nothing but government mechanics trying to figure out the best way to rip off the private sector economy, put the money in government coffers, pass it on to the crony elite and in a manner that is difficult to detect. They all, by the way, worked at Goldman Sachs.


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