Finally, a bad idea dies.

In a joint statement on tax reform, congressional Republican leadership and the Trump administration said Thursday afternoon that the idea of adjusting corporate taxes at the border won’t be part of the plan.

Why can’t more bad policy ideas die?



“The truth is the people I care most about are the middle-income people in this country who have gotten screwed. And if there’s upward revision it’s going to be on high-income people,” President Trump

This is politics. It plays to his base. It puts Democrats in a bind because they represent the richest areas of the country. Democrats have gotten a two-fer free ride for decades by advocating higher taxes on higher income earners and then having the Republicans oppose it on economic grounds.

I’d like to see Trump flip the question back to Hillary skillfully. The real issue is the tax code. Does it need to be reformed or not? If Trump took deductions, it was because the tax code provided for them. Once the deductions are there in the tax code, he pretty much has to take them and would be a fool not to take them. If it looks wrong, what’s really wrong is the tax code. So, is Hillary proposing to take away this deduction? Is Trump? Presumably, the deduction is there because it’s good policy. Will either candidate defend the policy and, if not, promise to change it? I don’t see what else matters here. And I suspect the candidates don’t even disagree about that.

Yes, these are the questions that need to be asked, not more gotcha b.s.

Yes, he would be a fool not to take deductions. Do you not try to minimize your tax burden?

And this is yet another issue that does not get debated this election cycle.

Via Instanpundit.

Trump at the Economic Club of Detroit on August 8:

My plan will also help reduce the cost of childcare by allowing parents to fully deduct the average cost of childcare spending from their taxes.

Dan Mitchell responds:

From an economic perspective, Trump’s statement doesn’t make sense. At best, creating a big deduction for childcare expenses simply creates the illusion of lower cost because of the tax loophole. . . .

When income is shielded from taxation, either based on how it is earned or how it is spent, that creates an incentive for taxpayers to make economically irrational decisions solely to benefit from the special tax preference. . . .

Providers will boost prices to capture much of the benefit (much as colleges have jacked up tuition to capture the value of government-provided loans and grants).

And Trump’s plan will create unintended side effects:

The actual result will be to increase costs and make the tax code even more convoluted. . . .

Creating a new distortion in the tax code also will have a discriminatory impact. The tax loophole will only have value for parents who use outside care for their kids. Parents who care for their own kids get nothing. Moreover, the new loophole also won’t have any value for the millions of people who don’t earn enough to have any tax liability. Yet these people will be hurt when childcare providers increase their prices to capture the value of the deduction for parents with higher levels of income.



[Hillary] Clinton has repeatedly called to put a larger tax burden on the wealthiest Americans to boost investment in infrastructure and job creation. The revision will put a 65 percent tax rate on estates valued at $1 billion or more per couple, the Clinton campaign said Thursday.

Yes, $1 billion is a lot of money. But that figure will be debated, and possibly lowered, if and when this proposal is taken up and debated. As well, the 65% rate will go through the same debate process. I know this because this proposal, like all other campaign proposals, are announced for campaign purposes by the candidates. After the election and legislative action begins, the details are worked out.

But make no mistake. If this proposal is debated, something will pass and millennials and many others will be affected.


Today’s “brutal tax beating” is about what happens when a left-leaning journalist writes a sophomoric column about tax policy and then gets corrected by an expert from the Tax Foundation.


. . . part of Bill Clinton’s 1993 tax hike was a provision to bar companies from deducting executive compensation above $1 million when compiling their tax returns (which meant, for all intents and purposes, an additional back-door 35-percent tax penalty on salaries paid to CEO types). But to minimize the damaging impact of this discriminatory penalty, particularly on start-up firms, this extra tax didn’t apply to performance-based compensation such as stock options.


The bottom line, as Scott points out, is that Bill Clinton’s provision means that CEO pay is penalized rather than subsidized.


I was looking for an explanation of how executive pay is taxed and now I found it.


I’m not impressed. First off, the Democrats enacted an $800 billion “stimulus” program in 2009. This is a smaller version of that. Why should this have any better result? Second, these programs always sound good and look good on paper. But the reality is the potential for corruption is enormous. This program will require hundreds of pages, several government agencies, debate and alteration by Congress, lobbying, and who-knows what else.  Third, how is it going to be paid for?  If spending is not reduced, the Treasury will issue yet more debt.  That will have to be paid off just like our credit cards, mortgages, car loans, etc.

Yes, it would be nice to have a few extra bucks in my pocket from the payroll tax reduction. I know its temporary so I’ll just spend a portion and save a portion. It’s like a small gift, easy come easy go. Nothing earned, no incentive to work harder or smarter. The actual amount will be too small to make a difference to my family. However, if the amount was $400, $500, or $1,000 more per month permanently, then we’re talking real money. I’d probably de-leverage more.


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