Of Course: Trump Trashed Reagan Tax Cuts as Democrat-Called 'Expert' Witness

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.

https://en.wikipedia.org/wiki/Tax_Reform_Act_of_1986

By enacting 26 U.S.C. § 469 (relating to limitations on deductions for passive activity losses and limitations on passive activity credits) to remove many tax shelters, especially for real estate investments, the Act significantly decreased the value of many such investments which had been held more for their tax-advantaged status than for their inherent profitability. This may have contributed to the end of the real estate boom of the early-to-mid 1980s as well as to the savings and loan crisis.

Prior to 1986, much real estate investment was done by passive investors. It was common for syndicates of investors to pool their resources in order to invest in property, commercial or residential. They would then hire management companies to run the operation. TRA 86 reduced the value of these investments by limiting the extent to which losses associated with them could be deducted from the investor’s gross income. This, in turn, encouraged the holders of loss-generating properties to try and unload them, which contributed further to the problem of sinking real estate values.

Mortgages and similar real property loans constituted a significant portion of S&Ls’ asset portfolios. Significant declines in the market value of real properties resulted in the erosion of the value of these institutions’ major assets.

>> It was a tax write-off to encourage investment in building and construction <<

Yes, that’s exactly what it was. Moreover, it was a prime example of a wrong-headed government policy that favors one sector of the economy over the other sectors. So I guess it’s not surprising that Mr. Trump wanted to keep this gimmicky loophole, while President Reagan wanted to eliminate it.

The critical point is this:

If you truly believe in free markets and economic liberty, then you will hold that the government has no business giving special favors to building and construction, when it doesn’t give exactly the same favors to every other sector of the economy. It’s the difference between free-market capitalism and the Mr. Trump’s favorite, government-managed crony capitalism.

> “If you truly believe in free markets and economic liberty, then you will hold that the government has no business giving special favors to building and construction, when it doesn’t give exactly the same favors to every other sector of the economy. It’s the difference between free-market capitalism and the Mr. Trump’s favorite, government-managed crony capitalism.”

Your statement is preloaded with judgmental phrases, false premises and conclusions.

For example, “if you truly believe” implies a respondent is not genuine unless they dance to your tune.

For example, “free markets and economic liberty”, two theoretical constructs that learned economists of every stripe including Milton Friedman could not fully characterize. Further, legitimate arguments exist across the spectrum as in Free Trade is more correctly characterized as Dumb Trade when it comes to accounting for the benefits received by American industries. Free Trade that is in any one instance unfair is not Free Trade, therefore, it is a construct that demands perfection, thus exists as an idealistic notion that is impossible to achieve in practice. Further again, Free Trade benefits the Oligarchs who have control of the profiteering thereof and as a result, abandon their country of origin to subscribe to a New World Order where they rule by actions of Central Banks.

For example, “government has no business giving special favors to building and construction, when it doesn’t give exactly the same favors to every other sector of the economy” is a falsehood because indeed, the federal government does give special favors to every sector of the economy and has created a lobbying industry to trade in favors for which the profits, kickbacks and revolving doors are obscene.

Mr. Trump played the game at the larger end of the scale for the purpose of obtaining passes for his businesses to move forward. He is no different than millions upon millions of builders who every day must deal with building departments, city councils, mayor’s offices, county executives and state governor’s offices. For you to name-call Trump’s work as crony capitalism serves to insult and belittle tens of millions of hard working Americans.

Excuse me but I knew Milton Friedman. As a PhD in Statistics from one of the top 3 departments in the world, I was in contact with Milton Friedman via the Chair of my Thesis Committee who was not only a long-time colleague of Milton but also a long-time personal friend.

You’re out of your league with me. Go play among the other loud sassy mouths on FR who are more at your level.

Do not post to me again.

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