Friday, September 29, 2017

Stockman Rips Mnuchin-Cohn Tax Plan: 122 Million Tax Filers Earning Under $100K Will Get Essentially Zero Net Tax Cuts

Cohn and Mnuchin
Regular readers of know that I have stated here several times that Trump's tax reform is a scam.

Trump is nothing but a Manhattan street hashlak and the reform is what you would expect from a street hashlak---short on details and long on BS.

Trump turned the task of designing the three card monte tax reform stunt over to Treasury Secretary Steve Mnuchin and National Economic adviser Gary Cohn.

This suggests that Trump may be a hashlak with a sense of humor. For the detailed work of tax reform minutia, he has put in charge an admitted dyslexic with a short attention span, Cohn, and the Treasury Secretary whose number one priority appears to be to lead a Carly Simon imagined life with his trophy wife.

It may explain why the tax reform outline is only nine pages long. As David Stockman notes, it is just three words each per day in office.

But speaking of Stockman, he is absolutely the best person to wade through the BS in the plan.

He was the Director of the Office of Management and Budget (1981–1985) under President Ronald Reagan. He is probably the best number cruncher ever to ever do US government policy work.

His bottom line conclusion of the tax plan released by Trump's short attention span tax reformers:

There are 122 million tax filers in the US (or 83% of the total) with AGI (adjusted gross income) under $100,000, but they would get essentially zero net cuts under the vague scheme presented Wednesday.
And then there is this from Stockman:
 The nine page bare-bones outline released yesterday is nothing more than an aspirational air ball that punts on virtually every policy detail needed to assess its impact and to price-out its cost. It promises to shrink the code to three rates (12%, 25%, 35%), for example, but doesn't say boo about where the brackets begin and end compared to current law.

Needless to say, a taxpayer with $50,000 of taxable income who is in the 15% marginal bracket today might wish to know whether he will be in the new 12% or the new 25% bracket proposed by the White House.

That could change his tax bill by several thousand dollars. Really!

 [T]o help pay for upwards of $6 trillion of tax cuts over the next decade, it proposes to eliminate "most" itemized deductions. These "payfors" would in theory increase revenues by about $3 trillion...
[T]his latest nine pages of puffery contains just 1500 words----including obligatory quotes from the Donald and page titles. We hate to get picky, of course, but that does mean the Donald's dynamic duo, which has been on the job for 240 days now, came up with what amounts to just three words each per day in office!
In other words, there is not much to the released tax reform outline, where one would think the Administration is trying to put its best proposal ideas forward, and leave the difficult stuff out of the headlines and in Congressional committees. But this best case bare-bones proposal signals that absolutely nothing will be done in terms of tax cuts for the 122 million tax filers who earn under $100,000.

You are getting conned. Watch your wallets.

Stockman's full analysis is here.


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