Dean Baker's Blog, page 118

NYT Says Republican Lawmakers View SALT Deduction Repeal As Opportunity to Kick Democrats in the Teeth

Okay, that's not quite what the NYT said. Instead an article on the impact of ending the tax deduction for state and local income taxes told readers:

"Eliminating the deduction has long been a goal of many Republican lawmakers, who view the tax break as a subsidy that poorer red states provide to richer blue ones that spend heavily on government services."

Contrary to what the NYT tells us, their reporters really don't know how Republican lawmakers "view" the tax break. However for some reaso...

Eliminating the Deduction for State and Local Income Taxes Reduces the Value of the Mortgage Interest Deduction

The NYT had a good piece discussing the potential impact of capping the mortgage interest deduction and property taxes on the housing market; however, the piece missed an important way in which the Republican tax bills would reduce the benefits of the mortgage interest deduction. The piece notes that doubling the standard deduction will reduce the number of people who itemize and therefore benefit from the mortgage interest deduction.

But both bills also end the deduction for state and local...

Explaining the Evils of Debt and Deficits, One More Time

Andrew Ross Sorkin had a good piece mocking the Peter Peterson funded Fix the Debt campaign since many of its CEO leaders are now gladly on the tax cut bandwagon. Unfortunately, the piece ends with sermonizing on the need to reduce deficits and debt.

"In the end, Mr. Peterson is right. The country — and businesses — will ultimately do better if the nation’s balance sheet is not bloated with debt. Part of the issue is generating enough revenue from taxes, and part is dealing with costs like h...

David Brooks Has a Great Sense of Humor: Tech Giants Will Have "Few Defenders on the National Scene"

Yes, David Brooks actually said this. The context is his column noting the complaints against the big tech companies. After going through the list Brooks tells readers:

"The political assault on this front [against the monopoly power of the big tech companies] is gaining steam. The left is attacking tech companies because they are mammoth corporations; the right is attacking them because they are culturally progressive. Tech will have few defenders on the national scene."

It is hard to beli...

Robert Samuelson Gets Trade All Wrong in Going After Trump

Robert Samuelson comes in behind Donald Trump when it comes to mastering the logic of international trade. In his telling readers that "Trump gets the trade problem all wrong," Samuelson gets three really big things about trade wrong:

1) The dollar's status as the major global currency is not a major factor in the trade deficit;

2) In contrast to Samuelson's trade agenda, most workers have no reason to want the U.S. government to devote greater efforts to enforcing patent and copyright...

Robert Samuelson Gets the Trade All Wrong in Going After Trump

Robert Samuelson comes in behind Donald Trump when it comes to mastering the logic of international trade. In his telling readers that "Trump gets the trade problem all wrong," Samuelson gets three really big things about trade wrong:

1) The dollar's status as the major global currency is not a major factor in the trade deficit;

2) In contrast to Samuelson's trade agenda, most workers have no reason to want the U.S. government to devote greater efforts to enforcing patent and copyright...

Do We Really Have to Hear from Peter Peterson's Crew About the Budget?

There may be no other person who has done as much harm to the world in this century as Peter Peterson, the Wall Street billionaire. Peterson has used his money to promote his complaints about excessive budget deficits. Due to his ability to fund a wide range of organizations, he has helped to keep these concerns at the center of public debate.

Back in the last decade, when some of us were trying to raise the alarm about the housing bubble and the economic damage that would be caused by its co...

Note — Post on ACA Fact Check Removed

I had a post that took issue with a WaPo Fact Checker saying that the Republican tax plan will not actually kick 13 million people off insurance. Rather, they will opt not to buy it if they are not required to. I had misunderstood the Congressional Budget Office's analysis and thought it projected premiums would rise 10 percent a year as a result of this change. In fact, they project a cumulative increase of 10 percent.

Note -- Post on ACA Fact Check Removed

I had a post that took issue with a WaPo Fact Check saying that the Republican tax plan will not actually kick 13 million people off insurance. Rather they will opt not to buy it if they are not required to. I had misunderstood the Congressional Budget Office's analysis and thought it projected premiums would rise 10 percent a year as a result of this change. In fact, they project a cumulative increase of 10 percent.

Tyler Cowen Says Republicans Have Science on Their Side When it Comes to Corporate Tax Cuts

Tyler Cowen tells us in this Bloomberg piece that the Republicans are right to say that their plans for a big cut in the corporate tax will boost investment. (He is still opposed to the overall package.) I've had several people ask me about this one. I'll give the usual economists' answer: it depends.

If the argument is that other things equal, more cash in corporate coffers means more investment, I'm with Tyler. If we throw a huge pile of money at corporate America, at least some of it has t...