Competition and Healthcare – Is Capitalism the Right Mechanism?

The government is the right institution to pay for and hold the healthcare industry accountable (single payer).  Competition is useful in many areas but not in who should collect and pay for health coverage which we all need.  A single payer system is the most streamlined and will provide the greatest simplicity and uniformity.

In any specialized or emergency healthcare sector the effectiveness of competition breaks down.  You are at the mercy of the provider when you get the bill.  It is absolutely necessary that the government educates itself and oversees those that provide these services.

Capitalism is not great with dealing with the elderly, the sick, the poor, preexisting conditions etc.  That’s one reason why the role of the state is important in our society.  Setting up a caste system around medical services is not who we are and goes against an industry built around compassion and helping others. 

Bureaucracy

A bureaucracy is a group of people communicating and working around a set of standards.  Its why your McDonalds burger is similar wherever you go.  It is also why we have clean air and water.  It is neither good or bad.  Communication, learning, and accountability can all be stressors.  You can work to improve the system, even then some will complain because problem solving effort is required in the change once they have one system down.

In time the bureaucracies get more efficient at enforcing and overseeing existing rules and the entities they govern get trained on what to do.  This can lead to decreasing funding for an agency and seeing not much immediate effect but it is the thought process and mentality that are important.  Crippling an enforcement agency can also lead to unpreparedness in a disaster and shortcuts gradually taken more and more by companies.

Climate Change

Overview

North America After Polar Ice Melt (credit Kevin Gill using NASA Satellite Imagery from flickr.com)

We all share the same rock, the same atmosphere, the same oceans, we have to take care of it now with 7 Billion people in a post-industrial age. It requires work…the more people and the more industry the more work it takes.  In a war it can be easy to rally an economy around a common goal, there is the fear, we have to act.  In a climate situation it is much harder…. our activity is causing a long-term problem, we need to make a change, and we need to devote a lot of resources to make it right…a much tougher sell.

Preserving the world’s ecosystems should be a uniting issue for the planet, not a dividing one.  Making a change for the greater good requires overcoming fear of change, pride that an existing behavior needs changed, and the inconvenience of devoting resources and brainpower to that change.

Looking at the Data

Pre 1958: Historical CO2 record from the Law Dome DE08, DE08-2, and DSS ice cores, 1958 – Present Mauna Loa, Observatory, Hawaii. [9]
Pre 1880: Moberg, A., D.M. Sonechkin, K. Holmgren, N.M. Datsenko, and W. Karlén. 2005. Highly variable Northern Hemisphere temperatures reconstructed from low- and high-resolution proxy data. Nature, Vol. 433, pp. 613-617. [9]

1880 to Present: Lenssen, N., G. Schmidt, J. Hansen, M. Menne,A. Persin,R. Ruedy, and D. Zyss, 2019: Improvements in the GISTEMP uncertainty model. J. Geophys. Res. Atmos., 124, no. 12, 6307-6326, doi:10.1029/2018JD029522. [9]
Pre 1890: Kopp, R.E., A.C. Kemp, K. Bittermann, B.P. Horton, J.P. Donnelly, W.R. Gehreis, C.C. Hay, J.X. Mitrovica, E.D. Morrow, and S. Rahmstorf. 2016. Temperature-driven global sea-level variability in the Common Era. Proceedings of the National Academy of Sciences, Vol. 113, pp. E1434-E1441. doi:10.1073/pnas.1517056113. [9]

1890-1993: Church, J.A. and N.J. White. 2011. Sea-level rise from the late 19th to the early 21st Century. Surveys in Geophysics, doi:10.1007/s10712-011-9119-1. [9]

1993 to Present: Nerem, R. S., D. Chambers, C. Choe, and G. T. Mitchum. [9]

Clear inflection points are observed starting in the early 1900s when the Model T transformed the auto industry and electricity started to become mainstream.

Carbon Dioxide vs Methane

The accumulation of Carbon Dioxide in the atmosphere is a virtual straight line while the accumulation of methane, particularly 2000-2007 is not always straight up. 

It is an important note that methane is oxidized in the atmosphere with a half-life of 7 years turning into carbon dioxide and water.  This puts a greater emphasis on carbon dioxide emissions and perhaps methane emissions related to animals, which may be a hard sell to get rid of, less important.  Many blame the rise in methane concentration since 2007 on fracking which isn’t needed for the economy or our way of life.

Pre 1983: Law Dome, East Antarctica combined with samples from the Eurocore and GISP2 ice cores from the Summit region, Greenland, 1983-Present The Global Monitoring Division of NOAA’s Earth System. [9]

The Cost of Decreasing Carbon Emissions by Over 70%

The Fossil Fuels

Coal – mostly burned for electricity

587 million tons of coal were burned in 2019 according to the US Energy Information Agency (EIA) [10].

Natural Gas – used in electricity, residential and commercial heating/cooking, and some industry

31 trillion cubic feet of natural gas were consumed in 2019 according to the US EIA [10]

Oil – used for gasoline/diesel/jet fuel in transportation, some heating, and other lesser uses

7.5 billion barrels of oil were consumed in the United States in 2019 according to the US EIA [10]. 

These are the numbers we want to get down.  What would it take?

According to the US Energy Information Administration in 2019 the United States Consumed 4,118 billion kwh of electricity, of which 1,529 billion kwh is nuclear or renewables [10].  A rough estimate to account for fossil fuel heating and cooling and transportation is to triple this number to around 12,000 billion kwh of electricity per year.

Some emissions are hard to get rid of such as aviation, shipping, remote areas, and some industry.  Unless a substitute exists the government usually doesn’t force a change. We will continue to use oil and gas where substitutes are hard.

For the sake of a simple argument let us use Tesla solar pricing [11].  The price of the 16.32KW residential solar panels mounted on the roof with 4 powerwalls before incentives is $56,500 in California as of June 2020. Tesla provides a range estimate of 63-84kwh per day.  We will use 74kwh per day. At scale, with thin margins, no marketing, mass assessments, and assuming technology improvements let us discount 15% to $48,025 for 74kwh per day or 27,010 kwh per year, which is then $48,025/27,010kwh or $1.78 per kwh per year.

We need to create 12,000 billion kwh – 1,529 billion kwh (already renewable or nuclear) or 10,471 billion kwh/year of electricity.

10,471 billion kwh x $1.78 per kwh is $18.6 Trillion.

We are also going to subsidize new electric vehicle purchases by $7500 each at 17 million vehicles per year is $127.5 Billion.  We will assume another $22.5 billion in subsidies for large trucks/buses for an even $150 billion per year.  This will gradually turn over the vehicle fleet in about 15 years, $150 billion x 15 years is $2.25 trillion. We will add $3 trillion for utility infrastructure improvements.

Total Cost is $18.6 trillion + $2.25 trillion + $3 trillion = $23.85 Trillion.

Savings – after the renewable energy is built the cost to generate energy is much less.  Electric cars are much simpler and cheaper to operate than gasoline.

About 60% of the 7.5 billion barrels of oil is used in gasoline or diesel for road transport [12]. At 42 gallons per barrel that equates to 189 billion gallons.  At $3 a gallon that is $567 Billion.

The utility portion of the economy was $337.8 Billion in 2019 according to the US Bureau of Economic Analysis [13].

The government’s ability to borrow money for long periods of time (decades) is strong.  Essentially it can borrow at about the rate the economy grows (like a 0-interest loan).  If we assume the government can recoup $400 billion a year of the over $900 billion spent on road transport oil and utilities that will add up.  For instance, we tax vehicle registrations per year at the equivalent of what the individual is saving on gas.  Utility bills could stay the same but a portion goes to those operating the utility and a portion goes to the government since the cost to operate the utility is much less.

That is $4 Trillion per decade, or it pays for itself in under 6 decades with no tax increases, just borrowing and recouping would be fossil fuel expenditures over decades.  This coincides with common literature of renewables or electric cars paying for themselves in under half that time.

If we wanted to tax our $21 Trillion/year economy, $1 Trillion in a top-heavy manner and not go into debt, that too would not be hard. During World War II we generated over 40% of economic activity to go to the war effort. 

Other Big Numbers if we Project over 30 Years (2019 Dollars)

$14.7 Trillion ($491 Billion per Year) – Taxes on pace to go uncollected that are owed

Applying the 85.8% net compliance rate (IRS 2011-2013 study) [14] to 2019 revenue (3.46 trillion – Congressional Budget Office) [15].

$129 Trillion ($4.3 Trillion per Year) – Economic activity going to finance/insurance/real estate (FIRE) more and more being questioned by goodwill economists.

$36 Trillion – end of 2019 assets of the 1% accumulated largely from under taxing of the last 40 years

$630 Trillion – Current GDP Level over 30 Years

$252 Trillion – the equivalent of spending 40% of economic output on something (WWII peak level)

$69 Trillion ($2.3 Trillion per Year) – Corporate profits

$30 Trillion ($1 Trillion per Year) – income of the 1% above a doctor’s salary (300k)

If we wanted to, how much could we grow the economy with more labor hours? More hours, higher employment, less school, later retirement (if possible)….a lot.

This will take a great marketing campaign and lots of hand holding.  It will take a focus on great works of previous generations.  It is an opportunity for this generation to leave a great positive mark, and experience the joy that can be had when we come together to work on something positive.

How the Economy Transforms in War

Let us look at how the economy transforms during war.  It is the same process if you want to transform the economy for a war, lots of infrastructure, build giant wonders or a large environmental initiative. 

DURING A LARGE GOVERNMENT EXPENDITURE

The overarching idea is we the people need to produce more than we consume so that our production can go to something else like a war.

During World War II

Moving assets around after the war is not hard, mostly if you have debt (like the government) you will benefit and if you are owed (like bondholders) you will lose through inflation.  The government is going to pay for all this by issuing bonds and raising taxes.  You aren’t going to save much money during a period like this.  During WWII bonds paid 1.5% to 3%.  After the war, inflation greatly exceeded these rates, so by the time these are paid off the benefactor is getting less back than he or she paid in, but still better than putting the money under the mattress.

The critical factor is in the time of spending itself (like WWII) how much production can you either create (like more labor hours) or take from private purposes to devote to what you want.  Not actually different than a family planning for a big expenditure.  After the war the government can print money or tax whoever has the money to pay for what it needs to, unless it’s an entity outside its borders which would obviously create conflict.  Private business that go into debt building what they need to benefit after the war too. Life goes on, the economy evolves. After the war the factories go back to producing goods to meet the pent-up demands of the public.

Some have estimated about a $1 Trillion per year budget for climate change.  How would that look relative to world war II?

References

9. The 2 Degrees Institute. Interactive real-time climate graphs. Global Methane, Global Carbon Dioxide, Global Mean Sea Level, Global Temperature. www.2degreesinstitute.org. Accessed December 29, 2019.

10. U.S. Energy Information Administration. Annual Energy Review (2019). Tables from 5.1b, 6.1, 7.1, 8.1 and 8.2a https://www.eia.gov/totalenergy/data/annual/. Accessed April 7, 2020.

11. Tesla Solar. https://www.tesla.com/energy/design. Accessed June 25, 2020.

12. U.S. Energy Information Administration. Oil: crude and petroleum products explained. https://www.eia.gov/energyexplained/oil-and-petroleum-products/use-of-oil.php. Accessed January 30, 2020.

13. U.S. Bureau of Economic Analysis. Gross Domestic Product by Industry – Fourth Quarter and Year 2019. https://www.bea.gov/system/files/2020-04/gdpind419.pdf. Page 10. Accessed June 7, 2020.

14. U.S. Internal Revenue Service. Tax Gap Estimates for Year 2011-2013. https://www.irs.gov/newsroom/the-tax-gap. Accessed April 7, 2020.

15. Congressional Budget Office. Budget and Economic Data. Historical Budget Data. January 2020. https://www.cbo.gov/about/products/budget-economic-data#2. Accessed June 20, 2020.

The Size of Government

The non-military part of the government is less than a quarter of what the government spends.  Most of the money goes to the military or seniors (which we would spend privately anyway if the government wasn’t).  It is not the fault of the government that the industrial revolution happened resulting in a much more urban/suburban culture and industrialization.  This required the government to greater plan cities, oversee worker safety, empower laborers with management, manage increased globalization, and rule on what we put into the sky, earth, and waterways.

We all want less stressors, but it is human innovation that has dictated the size of the government.  The more problem solving the government does the better it is, no shortcuts. 

A Proactive government is empowering. It means if you do your homework and propose a better way, it will be implemented.  Unfortunately, the burden of proof is always on the non-cynical caring person such as the safety net, taxes, helping other countries, and making peace.

Government Cynicism

If someone asks you what do you “really think” of this stressor?  You are supposed to be cynical but if you want to be anything in life, you will be the one putting stress on others.

If you buy into your family, your holidays will be better.  If you buy into a team, your team will exceed expectations.  If you buy into your government, you will have peace and be able to work positively on things that matter.

Many arguments against the government that take on a cynical tone involve cherry picking, twisting facts, taking things out of context, and making mountains out of molehills. Human beings within the government are as tempted and make mistakes as any of us, but the role of government as the conscience and guider of civilization is extremely important.

The stressor isn’t big government its innovation.  A proactive government is empowering.

How the Government Actually Does Budgeting

There is goodwill and homework type budgeting which includes doing homework on all the things the government does and understanding the more mental work put in by the top, the more efficient the government will run.  Resources are allocated according to need and understanding.  Appreciation is given to the necessary stress the government puts on society to ensure we are accountable to each other and the world.  It is not the government but human innovation and values that increase the size of government.

There is also emotional budgeting focusing on temptation….giving as much money to convenience (tax cuts), over funding pride, power, and security (military, other security) and defunding vulnerable diplomacy, and accountability and stress (regulators), and cynicism to any force of goodwill (safety net, foreign aid).  You score “wins” by taking money from these small entities and avoid large budget items that require courage.

Forward thinking companies make an extra effort to hear all ideas, accept risk and failure, and protect the pride of those that think different, but our congress is an institution of high pride fear with many seeking to take down anyone that may argue for change or resources or tell us what we need to hear.

Forcing the Government’s Hand – Gold Standard, Cryptocurrency, Tax Pledges, Balance Budget Amendments

The gold standard, don’t tax pledges, balance budget amendment propositions and even the recent cryptocurrency craze are all forms of trying to force the government’s hand in budgeting.  They are afraid of the control the government has with printing money, they understand the unsustainable nature of the debt they created, and they want to control it without standing up for any pay fors.

1. Bind the Government’s Hands

2. Hide

3. ?

The reality is the government’s ability to control its money has been very important in history to help in recessions, wars, infrastructure initiatives etc.  In the case of any fear society faces you want the government to have the levers needed to combat the situation.  What would happen if the government literally could not spend what it needed to?  The government isn’t going to throw up its hands and stop payments to seniors or cease military operations or going to find tons of money from already underfunded agencies.  Probably taxes are going up and instability of the economy in general is going up and fear is going up. The government’s ability to control its money is a benefit to those seeking to have high personal assets.

Image References

First Principles Thinking About the Economy

Many of these are not original but as I think about what is true in an economic system I come up with these points.

  • The economy is work. In order for us to consume tomorrow what we consume today someone has to work tomorrow.
  • Wealth in the world is:
  • The debt of another
  • The value of an asset
  • Money printed by the government

Having more people in debt doesn’t help the world and having the world’s assets cost more labor hours isn’t necessarily helpful either.  A revenue producing asset doesn’t make the world wealthier, that is someone else’s future labor owed to you.  The world doesn’t get richer or poorer via numbers in bank accounts.  The governments printing a bunch of money doesn’t make us richer or poorer.  Wealth is increased by learning, processes, and the production of hard assets like infrastructure.  Limited resources being decreased makes the world poorer.

  • The economy only knows who is spending, not who is saving or what incomes are.  The production of society is determined by spenders.  If one entity such as governments keeps borrowing and one entity such as the rich keep saving the economy doesn’t change until that stops. Only then will the economy and what it produces shift (less products per labor hour for others).
  • The economy can always produce tomorrow what it produces today barring a non-economic disaster or event.  There is no fear that we can’t have tomorrow what we have today because there is more debt in the world.  More debt means more people are owed as well and the governments can tax how they want.  The economy becomes better over time.
    • For example, after a war when the government is in a lot of debt there is really no reason the world is less rich than before the war.  The government can use taxes and inflation to take out debts. 
  • In an austerity environment it is not enough for those in debt to work more, those that are owed must spend more than they are bringing in to create less leverage in the ecosystem.  Otherwise the economy shrinks.  The rich have less customers during austerity unless they are the customer.
  • If the government chooses to borrow over tax, the lender does not become richer.  They trade in $100 for a $100 bond that usually slightly beats inflation. The government (everyone) is $100 poorer and the person not taxed is $100 richer.
  • Society is not richer if a $100/year revenue stream trades for $1000 today and then $2000 tomorrow. Now it is harder for the next guy to get a return on investment.  We are not richer if property values go up, a burden is placed on the next in line to work more for a dwelling.
  • If you can’t spend money you don’t have it.  You hiding $1 million in a secret account and the government printing $1 million is the same as the government taxing you $1 million.
  • The more people trading in assets for labor the greater the burden on labor.

Personal Views also Shared by Many

  • The economy and its currency serve the people and their values.  The people do not have an obligation to serve an economic system as if it were a religion.  Rewarding hard work, risk, and innovation are eternal human values.  So are goodwill to those in need, sustainability, a force for good in the world, and being a counter to wealth accumulation at the top.
  • The government must have the levers and ability needed for large expenditures such as a war, housing crisis, virus outbreak, or environmental threat including the power to print money and tax.
  • The growth of the economy such as improvements to processes, technologies and infrastructure is work done by all but not shared by all.  Large incomes and stock prices outpacing economic growth isn’t a religious phenomenon, it is the wages not rising that allow it.  The government and its tax system is the natural counter.
  • The cornerstone of implementing values and serving the needs of the people is the government, our political discussions and its tax system. 
  • It is not wise for any sovereign entity to owe debts it cannot pay in a realistic amount of time.  This is not good for anyone.
  • It is not good for anyone to have an entity setup to fail.  Others should engage their brains in goodwill in that case.
  • Competition is a means to motivate but not the only means to motivate a group to work hard and innovate.
  • Rewarding risk and innovation is great but there is a lot of wealth created from passive investment, and continual upward trajectory of executive compensation that is more managerial in nature.  Even if you do innovate and become wealthy, usually that’s at the expense of the market share of someone else and on the shoulders of those that have come before you.
  • Recently some ideas have come out from goodwill economists about modern monetary theory, the idea that we don’t have to worry about deficits because the government can print money.  While this is true, it is attempting to skirt pay for discussions on items of goodwill.  If we are going to spend $1 trillion in labor on senior income somebody has to work to create the $1 trillion in goods and services to be consumed.  The government does have to make someone poorer eventually through taxation or inflation.  It is perhaps better to just stand with your feet planted on values and cold hard truths.
  • Even if you are rich it is better to set the system up so the needs of all are taken care of through political argument, not the groveling of the needy at the hands of the rich hoping for goodwill.

Correcting for 40 Years of Under Taxing and War

To be blunt a correction needs to be made for what has happened over the last 40 years.  We need to deter this cycle from occurring for the next 40 years.  The promises of increased growth to pay for these tax cuts never came true and the fortunes created as a result of these tax cuts are not just.  The debt that has incurred never went to some foreign entity we now owe our labor too; it went to the top of the income ladder.  We have yet to seriously address tax issues to the increased efforts in the middle east which have cost $6.4 trillion according to the Watson Institute for International and Public Affairs “United States Budgetary Costs   and Obligations of Post-9/11 Wars through FY2020: $6.4        Trillion.” [8]

If for example if we took $5 Trillion of the $36 Trillion in net worth of the 1%, we wouldn’t force them to sell things and crash markets.  Their most liquid assets would just go to our treasury.  Their stocks, bonds, and real estate would be assets of the treasury.  US treasury bonds would obviously just be zeroed out.  The treasury can manage the assets as it sees fit from there. 

Invoice Coming Due

  • Reagan Tax Cuts $7.1 Trillion
  • Clinton Discount $-1.9 Trillion
  • Bush Tax Cuts $2.1 Trillion
  • Middle East Wars $6.4 Trillion
  • Wall Street Bailout $0.7 Trillion
  • Trump Corporate Tax Cuts: Tab Ongoing

US Debt Clock

  • $23 Trillion in January 2020 (prior to coronavirus)
  • $187k per taxpayer?
  • …depends on how much you think the 1% owe from their $36 trillion in assets

Alternatively, if we actually collected all the taxes owed to the treasury each year and the tax gap was 0 instead of ~2-3% of GDP, the debt would be near 0… 2-3% x 40 years is 80-120% of GDP.

Better rules need to be put in place for government borrowing at federal, state and local levels since it is an obvious temptation and laws and rules are meant to combat temptations.

References

8. Neta C. Crawford, Watson Institute, Brown University. United States Budgetary Costs and Obligations of Post 9/11 Wars through FY 2020: $6.4 Trillion. November 13, 2019.

Is the USA Broke?

We are not more or less poor because we under tax ourselves, in fact the economy doesn’t really care as long as the government keeps spending.  The economy only knows who is spending not who is acquiring assets and who is acquiring debt.  As long as the government spends the same and goes into debt and the rich keep saving the status quo remains.  If the rich were to start spending all of their money the economy would try to compensate by devoting more resources to what rich people would buy, prices on other things would go up, the quality of life of everyone else would suffer.

The country actually isn’t going more and more broke if it has more and more money out there it could tax. As our assets grow relative to the size of the economy (work) it puts more of a burden on labor.

#Economy #Nationaldebt #Wealth #Politics

Of the National Debt

  • About 2/3 we owe ourselves
  • About 1/3 is held by foreign entities
  • US Individuals also own foreign debt. What’s in your mutual fund?
  • The net debt or surplus is relatively minor
  • When we don’t tax ourselves, it is the untaxed getting rich, not the bondholder
  • Countries get in trouble when they owe other countries on a net basis, especially if they don’t control the currency
  • All the major governments of the world are in a similar boat (the collective government account owes the individual accounts of the citizens)

All that’s really happened over the last 40 years is we’ve acquired a bunch of debt from the government and given it to the top.  If a just tax system was in place much of the wealth accumulation would not have taken place. 

Some conservatives call for the federal debt to be forgiven and some rating agencies have called our bonds risky.  There is no need for this as the government has the power to tax and the power to print money.  It can print money and decrease both wealth and debt or it can tax those that benefited the most. 

References

1. U.S. Bureau of Economic Analysis. Gross Domestic Product. Supplemental Information and Additional Information Tab. Current-Dollar and “real” GDP. https://www.bea.gov/data/gdp/gross-domestic-product. Accessed June 7, 2020.

6. Treasury Direct. Historical Debt Outstanding – Annual. https://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt.htm. Accessed June 20, 2020.

7. Board of Governors of the Federal Reserve System. Distributional Financial Accounts. https://www.federalreserve.gov/releases/z1/dataviz/dfa/. Accessed June 20, 2020.

Wrongs of the Last 10 Years in Budgeting

The problem with just cutting taxes is it’s a slow wealth transfer.  It takes time to take the government’s money so they got a little smarter in 2017 with cutting the corporate tax rates.  Just like selling a business or some revenue stream you get an instant pay out.  Where do rich people put their money? A lot of it in public or private companies. By taking a ~$200 Billion revenue stream away from the treasury companies are able to take home 79 cents on the dollar vs 65 cents, an increase of (79-65)/65 = 21.5% so now your company has 21.5% more profits without doing any work and they are all worth 21.5% more!

Everyone enjoyed the stock market going up over 30% in 2017 leading to Trillions in private profits. Unfortunately, the companies have already appreciated in value, the cake has been eaten and that cut doesn’t help stocks go up in the future.  Just a $200 Billion hole in tax revenue remains.  Trends in US Unemployment didn’t change after the tax cut.

Unemployment Trends Remained Unchanged After the Tax Cut.  The downward trend was mostly because interest rates were set near 0 after the housing crisis.

  • Donald Trump “I think we can go to 4,5, even 6%” (2017 comment on GDP Growth from the tax bill)

……2 Years Later……

  • Federal Open Market Committee projects 2% GDP Growth in 2020 and 1.9% in 2021 as of September 2019, below historical averages (before correction for the coronavirus).

The Story

It begins with holding America hostage during the last 6 years of a democratic president

  • Shutdown the government
  • Use debt ceiling to hold an enemy party president hostage
  • Convince the public both sides are to blame
  • Crank government cynacim up to 11
  • Courage/work to discuss pay fors
  • Honest discussion of where the debt came from

Then you need to change the congressional rules for taxing by implementing dynamic scoring which says the economy will grow (we will work harder) if corporations get tax cuts.

Then go for the cookie jar once in power

  • The central item of the tax cuts and jobs act is to take a $200 billion revenue stream (decrease corporate taxes from 35% to 21%) away from the treasury and into corporations (like selling a business you trade a revenue stream for a one time payout), artificially increasing their profits and delivering a massive 1 time bump in stock prices.
  • Corporate executive pay and buybacks skyrocket.  Economic growth not so much.  The federal open market committee predicted 2% GDP growth for 2020 and 1.9% for 2021 in the fall of 2019 (before correction for the coronavirus).

Try to pay for it by going after healthcare

  • The American Health Care Act Fails to Pass by One Vote (2017)

Don’t share anything with your base

  • Individual tax cuts fade out and become tax increases by 2027
  • Corporate tax cuts are permanent

Spite the blue states if possible

  • State and Local tax deduction capped at 10k hurting high tax (dense population) states

What do you do after raking in trillions you didn’t lift a finger for? Complain on the taxes on these gains of course

After your stocks/bonds/real estate go up from corporate tax cuts you pay capital gains tax on them when you sell them.

  • “To Keep the Economy Growing, Index Capital Gains to Inflation” – Article by Ted Cruz, Grover Norquist
  • “There is a sore spot” on capital gains – Ryan Ellis
  • “Tax Cuts 2.0”

Over 80% of capital gains tax cuts go to the 1%.

Try to get rid of estate taxes to ensure rich estates rule for generations to come

  • The Tax Cuts and Jobs Act doubled the exemption for large estates to over $20 million in untaxed estate income for couples

Put millionaires on the honor system for taxes

  • Audits of millionaires are down 80% since 2011 (tea party takes over congress) and in line with the audit rate of the poor

(from ProPublica analysis of IRS data)

  • The tax gap (uncollected taxes) is estimated to be over $500 Billion per year

(According the IRS analysis of 2008-2010 tax receipts in 2019 dollars)

Give mega corporations tax breaks on overseas cash hordes

“The Tax Cuts and Jobs Act creates a historic opportunity for American companies to bring capital back home from overseas to invest in our domestic economy and create jobs for hardworking Americans” – Steven Mnuchin (Treasury Secretary)

  • Tax on overseas earnings decreased to 15.5% on cash or cash equivalents and 8% on the remainder
  • In 2004 President George W. Bush allowed corporate cash hordes back with a low tax rate of around 5.25%
  • Corporations are well trained now to horde overseas cash and wait for the next republican takeover to cash out

Relish in the positive asset “Business News”

(For a year anyway)

Then decide you are going to grade yourself based on how the stock market does as a result of taking money from the treasury

Steve Mnuchin: We “absolutely” view the stock market as a report card (US Treasury Secretary)

A+

Priority List

  • Long Term Thinking
  • Middle Class Incomes
  • Increase Economic Output
  • Short term asset pumps ü
  • Take credit for existing unemployment trends ü

Ignore Reality

If you lose in 2020 Rinse and Repeat

References

U.S. Bureau of Labor Statistics. Databases, Tables & Calculators by Subject. (SEAS) Unemployment Rate. More Formatting Options. All years, All time periods. https://data.bls.gov/timeseries/LNS14000000. Accessed June 20, 2020. (Numbered 3 in figure above)

Image References