Trump’s Tax Policy Is Populist, Not Conservative

RUSH: The earned income tax credit. I did some checking during the break. I can’t find anything on it. It’s not mentioned. USA Today says that it remains but is untouched. But other sources… The Washington Post says that top Republican officials haven’t decided to do with earned income tax credit. Do you know what that is, folks? The earned income tax credit is a way of assuming poor people earn money. You just assume they earn money and the amount is based on a formula, “the earned income.”

And then they get a credit on what their taxes would be if they earned it. They didn’t earn it. We assume that they did, and then give them a tax rate based on what they didn’t pay. Now, the typical Washington thinking behind this is that this is how we’re going to reward people who work, who try to get a job, as opposed to sit there and just cash welfare checks or food stamps or whatever. But this is all part and parcel of that statistic that 50% of income earners in America don’t pay any income tax.

The earned income tax credit ends up giving, essentially, tax refunds because an earned amount of income is assumed, is calculated. And then they calculate what tax rate and what taxes would have been paid on that assumed income, and then after assuming the person paid the tax, then they refund it. The only thing missing is that nobody paid anything. It’s all… It’s a scam. It is a way for… Alot of illegal immigrants capitalize on this, but a lot of poor Americans do too.

You can’t blame ’em. Hey, it’s these people in Washington setting up the rules. You know, we oftentimes sit here and blame the participants, but how can you blame them? If you tell a group of people, “You know what? All you gotta do is go out and get a job and we’re gonna assume you earn a certain amount of money and then we’re gonna assume you pay taxes on that money that you’re not earning, and then we’ll give you a tax refund on the taxes you didn’t pay.” Who wouldn’t go for that, if you’re in poverty or just barely above it?

But if that’s not gotten rid of it, if the earned income tax credit stays, then all the rest of this is… (sigh) Well, it’s just not what the Democrats and it’s not what the media are saying. Let’s go to the audio sound bites on this. The Associated Press: “The $5 Trillion Question for Trump Tax Plan: How to Pay for It.” They never ask that when Obama or Democrats are gonna do a tax cut (chuckles) ’cause they never do one. I just remembered! The question of how we’re gonna pay for Obama’s stimulus never came up.

How are we gonna pay for Obamas new health care plan never came up. It’s only when Republicans propose tax cuts that, “Well, how are we gonna pay for this?” And the premise is that Washington must break even at least. Whatever tax policy or economic policy emanates in Washington, it cannot cost the government any money. Oh, no. Government must at least break even. Why? Why can’t government shrink? It’s what conservatives believe.

And we’ve heard endless talk about small government, efficient government. But since Newt and the boys, Contract with America 1994, it hasn’t happened. Never happens. Government constantly gets bigger. And if they don’t have enough, they print what they need. All of this is smoke and mirrors. All this is designed to get votes. Here’s Trump justifying the fact that there will not be much, if any, relief at all in the top tax rate…

THE PRESIDENT: Our framework includes our explicit commitment that tax reform will protect low-income and middle-income households, not the wealthy and well-connected. They can call me all they want. It’s not gonna help. I’m doing the right thing — and it’s not good for me, believe me.

THE PRESIDENT: But what is good for me, not only as president and legacy — what is good for me — is if everything takes off like a rocket ship, like it should have for 20 years. That’s good for me.

RUSH: Okay. Now, right there is populism. That is pure populism. Some might say it’s liberal. It’s a derivative of Democrat Party class warfare rhetoric. “Our framework includes our explicit commitment that tax reform will protect low-income and middle-income households, not the wealthy and well-connected. They can call me all they want. It’s not gonna help.” So you see, we continue to demonize high earners and high taxpayers. We demonize them. Somehow it’s not fair. So we demonize them, and then we punish them.

When everybody else getting a tax break, they don’t, and this is called “fairness.” What it really is is how to get votes from the middle class. This is a pure populist approach. This is not a conservative approach to tax reform whatsoever. On this one, President Trump is who he is. He is a full-fledged nationalist-populist, and this tax policy indicates that. That’s fine, that’s who he is. I’ve always… I’ve told everybody, “He’s not a conservative. He’s not an ideologue.

“And he thinks that there is great political value in telling the country that the well-connected and the rich aren’t gonna get anything.” He is of the belief that a lot of people react favorably to the news that the rich are gonna get soaked or that the rich are not gonna benefit when everybody else does. That doesn’t promote growth. See, that’s the problem. They talk about this being a pro-growth plan.

I’m just using the numbers here, folks. I couldn’t care less personally, either. The fact of the matter is the growth engine requires people being hired, requires people being invested in small businesses and their growth. And if there’s no incentive, and if the high earners who do all that don’t have any additional discretionary income to hire, if they’re gonna depend on employees to grow the economy… Let’s take a look at it that way.

Gonna depend on employees to grow the economy? Nothing wrong with employees, but employees, by definition, don’t have equity stake. Employees don’t invest unless they buy stock, but I mean the management structure, the employees don’t have any ownership. Something’s gonna have to happen for the employees to have more disposable income so that they can then create this economic activity, but the employees don’t hire other people. They, by definition, get hired.

So if you want growth, you’re gonna have to have the people who hire and who grow and expand, you’re gonna have to find a way to get them more disposable income too. If you leave ’em out, where’s the growth gonna come from? Growth smowth. Any tax plan that comes along that genuinely raises more money to Washington, the Democrats still unilaterally oppose it, because they say the rates are unfair.

So it isn’t about revenue. And, by the way, why would it be? They can print money whenever they want. I think the whole federal budget’s a scam. When we have a $20 trillion national debt and a deficit every year that’s inexorably high with no fiscal discipline at all, why even have a budget? Why even talk about budget constraints when your entity, the government, is just going to print money?

Or you go to the Federal Reserve and say, “You know what? We need $5 trillion funneled to the stock market. We’re gonna cause it quantitative easing. We need to print some money, give it to the stock market, because we want to infuse the stock market with new cash that didn’t cost anybody anything.” And it worked. It grew the stock market. They just printed the money.

So I find all of this, “You need to grow the economy,” of course politicians want to grow the economy. That redounds to their favor if it happens on their watch. But it’s not gonna happen as rapidly here as it could. Now, here’s Schumer. This is classic. This is Schumer, Chuck You Schumer on the Senate floor yesterday. As I’ve said, there are some really good elements in this plan, folks. But listen to Chuck You, listen to the way the Democrats want to deal with this. It’s right out of the playbook.

SCHUMER: What about the deficit? The chief economic adviser to President Trump, Gary Cohn, said the administration believes it, quote, “can pay for the entire tax cut through growth,” unquote, by using a dynamic scoring model. Gary Cohn comes from Goldman Sachs. If he used that funny kind of math at Goldman Sachs, he would have been kicked out. Dynamic scoring is fake math.

SCHUMER: Income tax cuts with growth is fake math. This idea that the administration can pay for a five to $7 trillion tax cut through growth is simply selling a bill of goods using fake, fake math.

RUSH: It isn’t. Dynamic scoring is exactly what ought to happen. Let me explain this to you again. Static scoring is what the CBO does. So you have the federal budget. And let’s say that — I’m just gonna pick a number ’cause it’s close. Federal budget, $3 trillion. Now, somebody comes along and proposes a tax cut that, on paper, is $1 trillion. And so the static scores, “Oh, my God, government’s gonna lose a trillion dollars and is only gonna collect two trillion?”

So then they have to find a way to pay for it. Well, nothing is static. If you give people in the country a tax cut combined total of one trillion, those people are in fact are going to increase economic activity because they’re gonna have more money to spend or invest or whatever. You’re taking the money out of Washington and you’re putting it back in the economy, there’s only one thing that can happen, even if they save it. It grows the economy. It takes the money out of Washington and grows the economy! But the CBO doesn’t count any of that activity that will take place after people get their tax cut.

They stick there with the static. “Oh, my God, government’s out a trillion dollars!” And that’s when you hear the language, “We gotta find a way to pay for it.” So if they’ve given a tax cut over here to Joe Schmo and his buddies, that’s a trillion dollars, then they’re gonna raise taxes or fees somewhere else to regain that one trillion, and guess what? There’s no net new money in the economy, and government hasn’t shrunk, it’s only grown, and there isn’t any economic growth because there really isn’t any additional money in the economy!

So Chuck You Schumer’s coming along and calling dynamic scoring fake math when it isn’t. That’s common sense. People do things with the money they get. They don’t just put it in a mattress, Chuck! This is how these Democrats lie through their teeth about this. How in the world did Reagan cut taxes from 70 to 28% in eight years and double the amount of money that was created by the tax code? How did that happen? More people were hired. More people were made taxpayers. Taxes increased even though per capita taxes went down. More people paying taxes meant lower per tax payment per person, but the combined total was way up. That’s dynamic scoring. And it’s damn time somebody did it!

Static scoring is stupid! Static scoring is simple-minded. Static scoring is abandoning and denying reality. Dynamic scoring attempts to calculate what’s gonna happen when the economy has a trillion dollars injected into it. Like Obama’s stimulus, which they loved back then when Obama did it. But Obama, he didn’t put it where he said he was gonna put it. He gave it to unions to keep ’em employed. He didn’t build roads, bridges, schools, and all that happy malarkey that he promised.

In fact, it did end up with government. A lot of it went to state governments, state teachers, state this or that. It was a transfer from federal government to state, much of it to unions, which came back to the Democrat Party as campaign contributions. That’s another story. Money laundering scheme is what Obama’s stimulus was. But it makes total sense. If you put a trillion dollars in the economy by taking it away from government, giving it back to people who earn it, that’s a trillion dollars in the economy that wasn’t there. Of course it’s gonna make a difference.

But then the people in government, “Oh, my God, we’re out a trillion dollars. We got make it back.” So they go and they raise somebody else’s taxes a trillion dollars to make up for the loss, which means there isn’t a trillion dollars in the economy. Everything’s a wash. That’s static. And that’s what happens. And that’s why when they do a tax cut that doesn’t pay for itself, there isn’t any growth. There can’t be, the way they do it.

I gotta take a break. This stuff, it ticks me off. It’s been ticking me off for 29 years to put up with this lying, stinking characterizations of the Democrats like this.

EIT is a freakin scam.

You tell the givernment you “earned” $6,999 and they send you a check for $900....

I am of the opinion that the only true conservative form of tax collection would be representative apportionment. By that, the prior years federal spend is divided into a per Senator and per Representative amount. Each state’s tax bill is then calculated by adding the bills for each senator and representative. States would be required to pay their federal tax bill before being allowed to spend money on state projects or pay salaries. States would be free to collect taxes from their citizens as best fit that state.

Some states would favor property taxes, others sales taxes, others income taxes.

Pretty upset with the plan.

It will mean a tax increase for me, once the state deduction is removed. Honestly, I don’t think this bill has much of a shot.

You don’t tell them what you earned. Your W-2 tells them what you earned, and it tells them how much FICA was withheld. The EITC is a FICA rebate.

http://www.payroll-taxes.com/articles/earned-income-credit-infromation

I think it will be a tax increase for us...

we don't have many write offs...children are grown, mortage winding down, no rental properties or side businesses..

the biggest problem is the property tax, which never goes down and is becoming a sizeable chunk...

“Pretty upset with the plan.

It will mean a tax increase for me, once the state deduction is removed. Honestly, I don’t think this bill has much of a shot.”

I agree with your comments. Also, as best as I can find, the medical expense deduction also is going. So, for all of us Seniors who have significant medical expenses, long term care expenses, drug deductibles and co-pays, etc., etc., etc., we will be seeing higher taxes.

One article I read, hit the nail on the head. For upper middle income taxpayers, most would see an increase in our taxes. If this bill passes as written, my tax bill for the tax year 2016 would have been 16% higher.

“...bull shit scam...”

If by that you mean it is wealth re-distribution, then you are totally correct.

I disagree with the policy of directing tax breaks at fat people on hills in the hope that those fat people will buy more cake, stuff themselves with it, and allow a few crumbs to trickle down to the hardworking people in the valley below.

You need to learn about FICA. It is an income tax and is what the EITC rebates. Nobody has ever gotten EITC that hasn’t paid FICA taxes.

"You need to learn about FICA."

Learning is hard. However, my employer and I are painfully aware of the dark force known as FICA.

Regardless, my quote with which you seem to disagree came from your link. Here it is again:

"The EIC may lead to a refund even if no income tax was withheld or owed."

The author that wrote that doesn’t consider FICA to be an income tax. I don’t agree with every single sentence from every article I post.

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