Morning Reads — November 27

Here a read on how the “compassionate conservatism” (my application of the phrase to article ideas, not application of the phrase by the article itself) of Republicans of only a decade or two ago is being jettisoned in the GOP tax bill to reward capital at the expense of labor: https://www.vox.com/the-big-idea/2017/11/16/16665604/republicans-tax-reform-labor-capital-wages

A couple of choice quotes:

“If the United States is going to run a deficit, it shouldn’t do so in order to reduce the taxes paid by those at the top. Yet it is extra irresponsible given recent economic developments. Corporations are flush with cash from large profits and aggressively low interest rates, yet they aren’t investing. This is a big hint that large tax cuts for corporations will have very little effect on the economy.”

“Notably, because around a third of stocks are foreign-held, a significant amount of the benefit won’t even go to US citizens. The Institute on Taxation and Economic Policy estimates that “foreign investors would receive [benefits roughly equal to the] benefits that would go to the bottom three-fifths of Americans.”

“Much of the plan involves changing the definition of “income,” in various ways. A central part of the reform plan involves reducing the taxes on “pass-through” entities like sole proprietorships, S corporations, and partnerships. This creates a huge incentive for people to take whatever it is they do for a living and redefine it as a pass-through company. In 2012, Kansas went down this road: It entirely eliminated state taxes on pass-through companies. A team of economists looking at taxpayer data has found that the main effect has been for people to simply reclassify their income to dodge taxes, while not actually starting any new businesses.”

It’s sad how little reality, facts, and logic matter to a GOP establishment beholden to service at the pleasure of the rich.