Robert B. Reich's Blog, page 63

WHY THE REPUBLICAN TAX PLAN IS MORE FAILED TRICKLE-DOWN...

WHY THE REPUBLICAN TAX PLAN IS MORE FAILED TRICKLE-DOWN ECONOMICS*

Trump and
conservatives in Congress are planning a big tax cut for millionaires and
billionaires. To justify it they’re using the oldest song in their playbook,
claiming tax cuts on the rich will trickle down to working families in the form
of stronger economic growth. 

Baloney. Trickle-down
economics is a cruel joke. Just look at the evidence:

1. Clinton’s tax increase on the rich hardly stalled the economy. In
1993, Bill Clinton raised taxes on top earners from 31 percent to 39.6 percent.
Conservatives predicted economic disaster. Instead, the economy created 23
million jobs and the economy grew for 8 straight years in what was then the
longest expansion in history. The federal budget went into surplus. 

2. George W. Bush’s big tax cuts for the rich didn’t grow the economy. In 2001and 2003, George W. Bush lowered the top tax rate to 35 percent while
also cutting top rates on capital gains and dividends. Conservative
supply-siders predicted an economic boom. Instead, the economy barely grew at
all, and then in 2008 it collapsed. Meanwhile, the federal deficit
ballooned. 

3. Obama’s tax hike on the rich didn’t slow the economy. At
the end of 2012, President Obama struck a deal to restore the 39.6 percent top
tax rate and raise tax rates on capital gains and dividends. Once again,
supply-side conservatives predicted doom. Instead, the economy grew steadily,
and the expansion is still continuing.

4. The Reagan recovery of the early 1980s wasn’t driven by Reagan’s tax cut. Conservative
supply-siders point to Ronald Reagan’s 1981 tax cuts. But the so-called Reagan
recovery of the early 1980s was driven by low interest rates and big increase
in government spending. 

5. Kansas cut taxes on the rich and is a basket case. California raised them and is thriving. In 2012, Kansas slashed taxes on top
earners and business owners, while California raised taxes on top earners to
the highest state rate in the nation. Since then, California has had among the
strongest economic growth of any state, while Kansas has fallen behind most
other states.

So don’t fall for
supply-side, trickle-down nonsense. Lower taxes on the rich don’t generate
growth and jobs. They only make the rich even richer, at a time of raging
inequality, and they cause bigger budget deficits.

[*Our thanks to Alexandra Thornton and Seth Hanlon from the Center for American Progress]

Trump and Weinstein

Donald Trump weighed in on the scandal engulfing movie mogul and Democratic funder Harvey Weinstein,...

WHY WE NEED SANCTUARY STATESCalifornia lawmakers have just...

WHY WE NEED SANCTUARY STATES

California lawmakers have just passed “sanctuary state”
legislation – the first state since Oregon, which 30 years ago passed a law
preventing state agencies from targeting undocumented immigrants solely because
of their illegal status. 

Other states should follow California’s and Oregon’s lead. 

Since January, when Attorney General Jeff Sessions ordered
immigration authorities to target “public safety” threats, federal
arrests of undocumented immigrants have increased by over 37 percent. California is home to an estimated 2.3 million
unauthorized immigrants. 

California’s law limits the authority of state and local law
enforcers to communicate with federal immigration authorities, and prevents
officers from questioning or holding people depending on their immigration
status or immigration violations. But it still allows federal immigration
authorities to enter county jails to question immigrants, and allow police and
sheriffs to share information on people who have been convicted of serious
crimes.

This is a fair balance. Sanctuary protections like these make
sense because:

1. Under them, undocumented immigrants are more likely to come
forth with information about crime when doing so won’t put them at risk of
deportation. This improves public safety and builds trusts with law
enforcement. 

2. By contrast, turning state and local police into immigration
agents invites more crime because it diverts limited time and resources to
rounding up undocumented immigrants.

3. Undocumented immigrants commit crimes at a lower rate than
native-born citizens, so it makes even less sense for local and state police to
spend their precious time and resources rounding them up.

4. A dragnet aimed at finding and deporting all of America’s 11
million unauthorized immigrants is cruel, costly, and contemptible. It turns
this country into more of a police state, breaks up families, and hurts the
economy. 

We
must resist Jeff Sessions and his dragnet. Help make your state a sanctuary. 

Memo to Tillerson about the Moron

To: Rex TillersonFrom: Robert ReichSubject: The MoronI can understand why you feel Washington is a...

The Growing Irrelevance of President Trump

Announcement: Donald Trump is no
longer the president of the United States Oh sure, he has the title...

The Irrelevance of President Trump

Announcement: Donald Trump is no
longer the president of the United States. Oh sure, he has the...

Six Reasons Why American Corporations Shouldn’t Get a Tax...

 Six Reasons Why American Corporations Shouldn’t Get a Tax Cut

Trump and Republicans
are trying to sell you the idea that American corporations need a tax cut in
order to be competitive. That’s rubbish. Here are 6 reasons why:

First, American corporations don’t need it in order to be competitive internationally. After tax
credits and deductions, their effective tax rate is just about the same as paid
by corporations in most of our major trading partners, according to the U.S.
Treasury. 

Second, American
corporations are making more money than ever. Their after-tax profits are a
higher share of the total economy than ever. American corporations earn nearly
half of all global profits, even though the U.S. economy is about a fifth the
size of the world economy.

Third, the long-term competitiveness of American corporations depends far more on a well-educated
and skilled workforce, modern infrastructure, and basic research than on tax
rates. And the way we finance these necessary public investment is through … taxes.

Fourth, American
corporations are now paying less in taxes than they have in 65 years.
Corporate tax receipts are the lowest percentage of the economy since just
after World War II. If corporate taxes are cut, you will have to pay even more
in taxes in order to make up the difference.

Fifth, if their taxes
were cut, corporations won’t use the extra money to make new investments in
plant, equipment, research and development, or jobs. They’re already using
their vast stockpiles of cash to buy back shares and thereby boost stock
prices, and for extravagant bonuses and salaries to CEOs and other top
executives. That’s what they would do with any additional cash. 

Sixth, the reason
they’re not investing more is because consumers don’t have the purchasing power
to buy more, and that’s because most people’s incomes have gone nowhere for
decades. And why is that? Because corporations have been holding down wages by
outsourcing abroad, substituting software for jobs, contracting work out to part-time
workers, and fighting unions. 

A corporate tax cut is
the wrong solution to the wrong problem. The real problem is stagnant wages of most Americans,
coupled with declining public investments in schools, roads, public
transportation, and basic research – all the things average working Americans need in order to become more productive and get higher wages. To finance these we need higher corporate
taxes, not lower.

How to Make the Electoral College IrrelevantWe must make sure...

How to Make the Electoral College Irrelevant

We must make sure our democracy doesn’t ever again elect a candidate who loses the popular vote. That means making the Electoral College irrelevant.

Here’s how:
As you probably know, the Constitution assigns each state a number of
electors based on the state’s population. The total number of electors
is 538, so any candidate who gets 270 of those Electoral College votes becomes
president.

Article II of the Constitution says states can award their electors any way they want. So all that’s needed in order to make the Electoral College irrelevant is for states with a total of at least 270 electors to agree to award all their electoral votes to the presidential candidate who wins the popular vote.

If they do that, then automatically the winner of the popular vote gets the 270 electoral college votes he or she needs to become president.  

Already 10 states and the District of Columbia have passed laws to do this – awarding all their electoral votes to the candidate who wins the popular vote, as soon as the 270 elector goal is met. Together, these states total 165 electoral votes.

So all we need now is some additional states with 105 electors to pass the same law, agreeing to reward all their electoral votes to the winner of the popular vote – and it’s done. We’ll never again elect a president who loses the popular vote.

The effort is known as the National Popular Vote Interstate Compact. If your state hasn’t yet joined on, make sure it does.

Why We Must Raise Taxes on Corporations and the Wealthy, Not Lower Them

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The Growing Danger of Dynastic Wealth

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