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Our Surreal Times

Trump: “The Consumer Financial Protection Bureau, or CFPB, has been a total disaster… Financial Institutions have been devastated and unable to properly serve the public.” The only thing more disturbing than a “populist” president siding with Wall Street (during an unprecedented boom in the financial sector) is the MAGA crowd rushing to explain why the same group of companies that have been...

GOP Tax Plan IX: Bailouts vs Students

So we’re the country that can spend $29 trillion bailing out companies who trashed the economy in 2008 (this was the calculation done by the Levy Institute, which among other things tracked toxic asset purchases). But we need revenue so bad that we have to tax graduate students on the value of their tuition waivers. And we have to charge student borrowers interest 6% over what we charge banks, even though their loans...

GOP Tax Plan VIII: Sun-setting the Middle Class Cu...

Leonhardt in the NY Times: “In the Senate, Republicans were so desperate to find money that this past week they released a new version of the bill that made virtually all of the middle-class tax cuts temporary. They expire before the bill’s final year, 2027. An assortment of middle-class tax increases — again, to help cover the cost of the tax cuts for the wealthy — last for the full life of the Senate bill. As a...

WSJ Propaganda

Reducing Corporate Tax Games The above article is an example of spin. The tax bill is a $1.5 trillion giveaway to the top 0.02%. The WSJ is emphasizing that under the proposed rules it is slightly more likely that some offshore profits will get taxed – at a much lower rate that is also far easier to access and thus serves as a perverse incentive to offshore by even medium and small companies. That is, the provision...

Logical Monopolies and Corporate Pillaging

How Local Utilities Gamed the Natural-Gas Market Solution: a regulated monopoly (or public ownership). This line we keep hearing about how the free market does everything better is proving to be wrong again and again. Free markets work great for dominant players and scammers. Regulated free markets can sometimes achieve the optimal blend of free enterprise and consumer protection. Some things are natural monopolies (most...

Inferences on the Putin-Trump Relationshisp

Putin has something on Trump, something that would ruin him completely. It is not clear what that is, but it is likely financial (remember, Trump refuses to release his taxes, and appears paranoid about anyone looking into what is going on with his money). So Trump’s behavior towards Putin very much appears willful, not ignorant. I wonder how many years it will take before historians and the public finally find out...

Taxing Large Nonprofits

If the Estate Tax phases in at $5 million in assets, why couldn’t you have a tax on the assets of religious institutions that likewise phases in, taxing only assets that exceed a certain level, say $20 million. Exempt the first $20 million, but tax anything above that at the same rate as if it were owned by a for-profit entity. You could use a similar logic for the assets held be ostensibly not-for-profit...

Republicans and the Deficit

The mind still boggles that the party that screamed “deficit” for 8 years is trying to tell us that a $1.8 trillion increase in the deficit is really no big deal. Let alone their reason for suddenly wanting to put that sum on the national credit card. (For those not paying attention, the proposed GOP tax cuts will increase the deficit $1.8 trillion – based on the GOP’s own extremely optimistic...

Short Term Vs Long Term Self Interest

At the depths of the Great Depression, John Maynard Keynes had the insight that society can go badly wrong when people’s short-term interests lead them to oppose their long-term interests. He was referring to the tendency of businesses to cut workers and investments when their sales go down. Of course it makes perfect sense to do this, but if everyone does it at once you launch a spiral of unemployment that has no end....

Hillary Clinton and the Question of Corruption

If you spend any amount of time around the right-wing media you will invariably hear throwaway phrases like, “Hillary Clinton – most corrupt politician ever”, or “Hillary Clinton’s extreme corruption”. But if you check her criminal record you will discover that she has never been indicted, much less charged or convicted, of any crime. What are we to make of this? Voices on the left will...

Taxes vs Charity

A common talking point on the right is that taxes can and should be lower because the social needs of the impoverished should ideally be met by private charity. It is worth noting that this is a very old idea, going back at least to the start of the Industrial Revolution in the early 1800s. The concept was vividly illustrated by Charles Dickens in “A Christmas Carol” in the person of Scrooge, where it was also...

Is the Estate Tax Double Taxation?

The general rule of money is that it is taxed when it moves. When you are paid a salary, some of that is taxed as income tax. When you use it to buy something, there is sales tax. People accept that both these taxes are valid, and you don’t hear a lot of argument that sales tax is “double taxation” because you already paid income tax on the funds. Likewise, when heirs get a windfall, the money is moving...