In an NYT Op-Ed on Tuesday, Steven Rattner picked up the baton in the political Left’s campaign of lies with regard to tax reform. It’s a beauty.
“…$5.5 billion of tax giveaways, most for business.”
Tough to know where to begin with this statement. Using NYT’s own analysis, the gross tax “giveaway” totals $6 billion, 62% of which is “given” to corporations. But if the analysis is adjusted for the $1.5 billion the NYT assumes is lost to “creative accounting”, the percentage “given” to corporations is 49%. Hardly the definition of “mostly”.
Mr. Rattner also appears to struggle with the definition of “giveaway”, which is traditionally defined as something “given for free”. Unemployment insurance is a giveaway, as it is not earned. A tax cut, by definition, is taking less of what someone or something earned. Petty details, I know.
“For its part, the Reagan tax cut increased the budget deficit, helping elevate interest rates over 20 percent, which in turn contributed to the double-dip recession that ensued. The stock market fell by more than 20 percent. Fiscally, the revenue loss totaled 2.9 percent of the average gross domestic product between 1981 and 1985.”
This is blatant, disgusting manipulation of historical fact. Even a rudimentary understanding of the early 1980s interest rate environment would know that Paul Volcker deliberately raised rates to almost 20% in order to “break the back” of inflation, which led to a short-but-painful recession that cleared the decks for a secular economic boom.
Federal deficits had next to nothing to do with 20%+ interest rates, and Rattner knows it. Just disgusting, and really hard to believe something likes this was allowed to be printed. But then again, the NYT Op-Ed section really has next to no shame these days.
“Deficits have left a lasting mark in the form of vast piles of national debt — $14 trillion currently, up from $712 billion when Mr. Reagan took office, an almost 20-fold increase. Big deficits can sometimes be advisable, as they were in aiding recovery from the 2009 recession. But incurred pointlessly, as Mr. Trump is proposing, large fiscal gaps simply mean more debt that will be left to our children and grandchildren to pay off.”
A political Leftist bemoaning debt and deficits is hilariously ironic. With ZERO interest rate and/or debt/GDP context, Rattner cites a 20-fold rise in the national debt as evidence Trump’s tax proposal would put our children and grandchildren at risk. Never mind the fact that a large portion of the national debt level is due to allowing the US private sector to deleverage during the Great Recession in a manner that did not drive us into a Great Depression 2.0.
That is not even remotely to say that debt and deficits do not matter. Far from it. But when debt/GDP is less than 100% and the federal government can issue 30-year debt at less than 4%, the federal government has significant capacity to invest in economic growth.
“…we should be raising the 23.8 percent capital gains rate closer to the top rate of 39.6 percent on earned income, not lowering it.”
This is just nonsense. And again, Rattner knows it.
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Steven Rattner should be appalled, and the NYT should be ashamed of itself for allowing such a putrid form of “analysis” onto its Op-Ed pages. And if you believe my assessment of Rattner is off base, take a quick spin thru the Morning Joe archives in the days leading up to last year’s election – Rattner proudly exclaimed that the equity market was likely to see a 1987-style crash in the “unlikely” event Trump won.