Ted Cruz: "I heard the Owl call my name!" ;-)
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Posted on 04/20/2016 7:58:50 AM PDT by TexasCajun
It's not especially remarkable that House Democrats once summoned fellow liberal Donald Trump to Capitol Hill to testify about the alleged adverse effects of Ronald Reagan's 1986 tax reforms. What is somewhat remarkable is that this clip wasn't dug up by a conservative opposition research team, but rather by Trump's own campaign -- which proceeded to blast it out into the public bloodstream as evidence that "Mr. Trump" is an all-caps EXPERT on economic matters. And what conclusion did his "expertise" produce? I'll let Trump answer that question in his own words. Again, this comes via Trump's social media director, who -- ta da! -- can't vote for his boss today because he's not a Republican:
Trump called Reagan's tax cuts an "absolute catastrophe for the country," demanding that income tax rates be raised as a means of spurring investments in his industry. After all, the new policy rendered the US "no different than the Soviet Union," or something. He added that slashing the top rate to 25 percent was a "disaster." Say, under Donald J. Trump's current (fiscally incoherent, deficit-exploding) tax plan, is he proposing to reduce the top income bracket tax rate, perchance? He is, as a matter of fact -- to, ahem, 25 percent, while also pushing nonsense spending cuts, insisting on "building up" America's military (while also cutting defense spending), and rejecting entitlement reforms that are mathematically necessary to curb the biggest drivers of our long-term debt. But Mr. Trump believes in tax cuts now, which is all that matters, Trump defenders will argue.
(Excerpt) Read more at beta.townhall.com ...
He's no longer the Liberal Democrat he used to be!
uh...in 86 Reagan effectively Raised taxes. I LOVE Reagan but his 86 reforms was a corrupt hacks Dream. Let to much of the bastardization of the tax code we see today. So much hidden corruption in that bill.
+/- 20-25 years before becoming a prominent conservative and eventual Republican presidential candidate, ___________began his political career as a Democrat. He joined numerous political committees with a left-wing orientation, such as the American Veterans Committee. He fought against Republican-sponsored right-to-work legislation.
He planned to lead an anti-nuke demonstration and only his employer's intervention prevented it. He was elected president of a large, famous union twice--a union which had known communists among its members. He appeared ONSTAGE to endorse the Democratic presidential candidate, who subsequently won.
19 years later, as a governor he signed into law a liberalization of abortion that led to an explosion of abortions in his state.
Almost 20 years later, as president, he signed a law that legalized all illegal immigrants who had arrived in the US during the first almost 200 years of the existence of our nation.
I'll fill in the blank for you: our greatest president of the 20th century, known as Ronaldus Magnus, RONALD REAGAN.
How many times you have to repost same article ?
Do you have looping problem?
Cruz is out and gone. Go out and breath fresh air.
I was thinking 84 mostly not as much 86...sorry
I suppose that you want someone to post a resume of something you did or said thirty years ago, on the subject of whether to employ you today. Some of us would rather examine your behavior in more recent times, when you were focused on the subject at hand. Each to his own taste, of course. (I notice that you seem to echo some of Glen Beck’s little tirades in some of your posts, today. I will not insult you by drawing any conclusion from that.)
http://www.freerepublic.com/focus/f-chat/3422096/posts
It could be argued that Trump has a less risky plan than Reagan.
Reagan’s plan was to cut the taxes in hopes that we were far enough up the Laffer curve that the tax cuts would boost economic activity and in turn boost government revenues avoiding a run up in debt.
Trump’s plan to tariff imports is what the founding fathers put in place that worked great for 180 years.
The tax cut isn’t likely to stop offshoring because the wage differential dwarfs any tax cut. A tax cut is a bandaid that covers 1/50th of a massive hemorrhage. Tariffs directly address the problem.
And with the Tariff revenue and the increase in jobs that will result, Trump will have excess revenues and cut taxes from there.
He certainly has, his hair has gone not grayer with with age but more blonde.
As to his politics, the operative word is "now" because what he is today is not what it was yesterday and it is not what he will be tomorrow.
What fools we mortals be…
I proudly voted for Reagan in ‘80 and ‘84, and only didn’t vote for him in ‘76 because I was 15. To date, he is (IMHO) the finest President that we’ve had in my lifetime, and probably since Coolidge. Nonetheless, the man wasn’t perfect, and he signed some legislation that wasn’t so great. Sometimes, he got snookered by the Dems (look at the ‘86 immigration bill, the ‘86 FOPA limits on full autos, and Iran-Contra - the guy got USED by his people as well as opponents, possibly related to him being in the early stages of Alzheimers at the time). I really wish that we could wipe out 1986 from Reagan’s Presidency.
WRT the ‘86 Tax Act, I graduated law and business school in 1987, and went right to work for a national accounting firm doing taxes. The ‘86 Act, which was taught a great length in my final year in school, was positive for the economy in some areas, to be sure, but one of the negative things that it did was to effectively destroy the real estate market - which has ALWAYS been a huge part of the economy. It radically changed the depreciation schedules over only 4 years (the phase-in period for the depreciation changes), which is the blink of an eye for long-term real estate investors. These changes led DIRECTLY to the S&L crisis in ‘89 and ‘90, which almost took Citicorp and a bunch of other large banks down the drain with it. It was the biggest financial crisis since the ‘74-’75 recession, and the biggest until the real (Democrat-inspired) big crisis in 2008.
So the fact that Trump, then ONLY a real estate investor, was against it is no surprise. It probably cost him hundreds of millions of dollars, and arguably led to economic conditions that caused his casinos to go belly up (thus costing him even more hundreds of millions or more over time)...and he was far from alone - people all over the country lost their life’s savings because of a tax law change that was shoved down everyone’s throats over only a 4-year period of time, and they couldn’t possibly sell out because every single potential buyer knew the facts and either wasn’t buying, or was buying for $0.25 on the dollar at most.
What would be a surprise, and what would show Trump to be a damned fool, is if he was FOR the ‘86 Act.
Reagan cut taxes but also eliminated a lot of the government tax loopholes so that those paying 86% never actually paid 86%
This was government deciding what you could spend your money on by making it tax free ONLY if you chose to spend it where they wanted you to.
So the effect almost revenue neutral but was a simplified tax code that made investment in what YOU wanted to invest in that much easier, which created the biggest economic boom in history
Nice try, an article with a misleading headline.
Trump isn’t complaining about Reagan’s 1982 tax reform.
He’s objecting to the 1986 tax bill which effectively blew up commercial real estate investment and played a big role in the S&L Crisis that followed.
http://newsok.com/article/2327446
S&L Crisis: Who’s to Blame? 1986 Tax Reform Act Genesis of Today’s Financial Problems
William B. Michaels
Published: August 15, 1990 Updated: Aug 15, 1990
The savings and loan crisis ultimately was precipitated by the passage of the Tax Reform Act of 1986 legislation that could not have been passed at a more inauspicious moment.
The bill’s passage didn’t just choke off investment in real estate, it destroyed it. It gave real estate in the United States commercial and residential a 20 percent to 40 percent haircut across the board.
As if that weren’t bad enough, the action all but silenced new investment, in both real estate and construction.
As a result, demand disappeared, imploding like a punctured balloon the collateral value of S&L and bank real estate-related loans. With the equity portion of each individual loan becoming less valuable, it left only a boulder of unsecured and, in many cases, delinquent and growing debt.
The Treasury Department authorized tax revision in 1986, gutting the two time-honored justifications for investing in real estate: capital appreciation and tax benefits.
The preferential rate was removed for capital appreciation. What’s more, restricting the quantity and application of passive losses precluded the possibility of deals being stretched out and restructured.
Since there was no slack, deals were left to die and S&Ls to go into bankruptcy and be taken over. Industrial revenue bonds, which encouraged overbuilding, also were essentially eliminated with the 1986 tax bill, another nail in real estate’s coffin.
As if removing the capital gains incentive and decimating the passive loss features weren’t enough, the “coup de grace” was administered with the cut in the top tax bracket from 50 percent to 30 percent.
Net result of the loss restriction and the bracket cut was a real cost increase of an investor’s capital of about 300 percent to 400 percent, greatly increasing the risk/reward ratio. Thus, most of the remaining value of what was left of the passive losses was canceled.
This combination of destroying the arithmetic of real estate reduced most of the government subsidization of real estate investing.
Thus, one-half trillion dollars worth of property was dumped into the building and real estate matrix, an arena of commerce that historically has been one of the most vibrant in the country.
Politicians mainly a Democrat-controlled Congress, with help from the Reagan administration did not fully understand or consider the ramifications and domino effect of what the Treasury Department had slipped them.
Real estate investing, like medical services or any product that is subsidized by the tax bracket or direct payments, rises and descends in direct proportion to that “subsidization.” With that eliminated, real estate had only one direction to go.
Besides eliminating the passive losses planned for in good faith in real estate deals, Congress went a step further. Passage last year of the S&L bailout bill formally known as the Financial Institutions Recovery, Reform and Enforcement Act eliminated good will from the financials of all S&Ls that had gone out earlier and bought sick savings and loans.
Cheated and robbed by Congress twice in four years, the construction and commercial real estate investors and lenders have been wounded critically.
In short, the S&L investing regulations that were liberalized in 1982 caused four years of frivolous investing and criminal activity.
Then came the 1986 tax act, which in effect was the death knell to a walking, wounded soldier.
As the effect of the legislation became more and more apparent in recent months, damage control was implemented by lawmakers. They knew they caused the problem, but had to blame it on others. Plenty of crooked managers and judgmental errors also fit the bill. Today, with the investment lure of formerly subsidized arenas reduced, and fewer dollars flowing into them, the country moves inexorably towards deflation.
What can be done to defuse the S&L bailout cost?
The government should work out new tax rules immediately to give tax benefits through credits to those who buy property from the Resolution Trust Corp. Tax credits can be assigned to each piece of property. And unlike deductions, they can be precisely measured by the government and assigned specific values. This idea is workable and can be accomplished easily and should be considered by the administration and Congress.
EDITOR’S NOTE: William B. Michaels, a vice president of Merrill Lynch in Tulsa, has been a stockbroker for more than 30 years. He previously worked for PaineWebber, Bache & Co. and Standard Oil of Indiana.
This is a garbage piece taken completely out of context.
Reagan wanted tax cuts and tax reform but he had to get it through a democrat controlled Congress.
Reagan agreed that in return for cuts and simplification to individual and corporate income taxes, that a PRINCIPLE OF REVENUE NEUTRAL would be agreed to.
Revenue neutral meant democrats in Congress could go about and find every tax credit and loophole they could find and eliminate them.
Donald Trump was speaking about the elimination of the passive investor tax credit which ended up devastating the building industry and also helped spawn the S&L Junk Bond crisis as investors went shopping for alternative investment vehicles.
>> What fools we mortals be <<
Yes, and now Reagan-bashing appears to be accepted as perfectly fine and legitimate on FR, as witnessed by posts on this thread.
What amazing wonders Mr. Trump hath wrought! Praise be to His wisdom and mercy! Glory Hallelujah!
THen the magical Trump had an epiphany when he was 63 years old.
Of course he can’t explain what conservatism is beyond thinking it refers to saving money. But he is the Tumpster, so he can be whatever his supporters imagine him to be facts be damned.
>> Donald Trump was speaking about the elimination of the passive investor tax credit <<
Yes, that credit was exactly the kind of rigged, special-interest loophole that should be opposed by anybody with an informed commitment to free-market capitalism. It was a classic example of the government’s arbitrarily favoring one type of investment over another, a gimmick which made millionaires and billionaires out of some real-estate operators who knew how to exploit the complicated rules of the old system. We should applaud its elimination.
(And for the life of me, I can’t figure out why Mr. Trump would have opposed eliminating this notoriously rigged gimmick in the tax system, because he clearly is against any kind of system that has complicated and exploitable features.)
I did not see a clip of what Trump said. One of the things that the 1986 tax reform act did was to do away, overnight, with abusive real estate tax shelters. No doubt, it is something that should have been done . . . phased in over a few years.
Commercial real estate appraisals, especially non-owner occupied (rental), are largely valued based on cash flow. These tax shelters needed the tax benefits of the pre-1986 reform in order to maintain their cash flow to pay their debt . . . and maintain value. These shelters were abusive because, usually, there was no up front cash investment, and the owners of the entities holding these properties needed to be in high tax rate brackets to make the cash flow work. Since this tax change occurred overnight, immediately many commercial real estate (CRE) deals ceased to cash flow and their values plummeted overnight. This had a chilling effect of CRE values in general, as well.
Many banks lost big bucks CRE deals that soured BECAUSE of the abrupt change in the tax code . . . some of those banks failed. That is likely what Trump was complaining about to Congress, and to a degree he was right.
Again, elimination of the abusive tax shelter was the right thing to do, but it should have been phased in over time to spread the market impact over time . . . IMHO. Bad tax policy encouraged investment in real property that would not have been justified without the tax breaks. In other words, tax policy reallocated capital in the markets away from better, more productive projects that would have been successful WITHOUT such tax benefits. . . THE GOVERNMENT DISTORTED THE EFFICIENCY OF THE MARKET, and great damage was done to the economy because of it.
This story is not complete without remembering the nauseating crowing from House Banking Chairman Henry Gonzalez and Teddy Kennedy about the sorry, irresponsible bankers that did such a poor job of making CRE loans, while all the time, it was the abrupt change in the tax code that caused the banking bloodbath. . . an abrupt change that Henry and Teddy engineered . . . low-life SOBs.
Periodic tinkering with the tax code, also IMHO, is immoral. It should be set impartially to encourage a productive business environment, then left alone.
> “Yes, that credit was exactly the kind of rigged, special-interest loophole that should be opposed”
It was a tax write-off to encourage investment in building and construction.
It was closed by greedy democrats that wanted to preserve their share of the tax revenue pie that Reagan’s income tax cuts were threatening.
So you are in league with greedy democrats.
Of all the reasons to oppose Trump (and trust me, there are many), this one has got to be at the bottom of the list, for several reasons, already listed in this thread.
Reagan was wrong on this as he was wrong on amnesty.
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