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katiezstorey93 · 7 years ago

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The Kansas Experiment Is Bad News For the Tax Cuts of Trump

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With apparently all of the political media focused on James Comey’s testimony on Capitol Hill, the most fascinating policy news of the week may have come in 1,000 kilometers off, in Topeka, Kansas.

The Kansas state legislature on Tuesday voted to override Gov. Sam Brownback’s veto and roll back $1.2 billion of tax cuts over a couple of years. The election marked a repudiation of exactly what Brownback had clarified as an “experiment” in a specific brand of anti-tax fiscal conservatism.

The failure of that experimentation has implications beyond Kansas since Brownback’s approach was supposed to be a version for conservatives elsewhere, including in Washington. (It had been drafted with the support of prominent conservative thinkers, including former Ronald Reagan advisor Arthur Laffer and Heritage Foundation economist Stephen Moore.) Brownback’s version was especially radical: He directed to push personal income taxes to zero and exempted certain kinds of companies, called “pass-through” entities, in taxes altogether. President Trump’s tax program does not go up to now, however, it follows the same standard roadmap of sharply lower taxation on both people and businesses.

Brownback and his fans predicted that cutting taxes will create jobs and spur entrepreneurship. That isn’t what occurred. Kansas’s economy has performed reasonably well because the initial cuts have been passed in 2012, however its own neighbors’ economies have performed as well if not greater; a recent study reasoned that the business tax cuts at the core of Brownback’s strategy had little if any impact on the nation’s market. Meanwhile, the state’s fiscal condition fell off a cliff: Tax revenue plunged, making huge budget shortfalls and leading ratings agencies to downgrade the country’s credit score.

A few conservatives have argued that Brownback’s experiment isn’t a fair test of the economic theories because Kansas did not pair its big tax cuts with equal reductions in government spending. But there is a reason for that: Members of people may not like paying taxes, however they do like the services those taxes cover. When it seemed like Kansas’s budget gap could lead to large reductions to instruction and highway spending, voters reacted by throwing conservative legislators out of office and substituting them with the Democrats and moderate Republicans who week overrode Brownback’s veto. Whether Republicans from the U.S. Congress learn the economic lessons of the Kansas experiment remains to be seen. However, you can make confident that they’ll be analyzing the classes .

Climate change: Costs and advantages

When he announced last week that the U.S. could be withdrawing in the Paris Agreement, ” Trump said he had based his decision on information that showed just how much the accords, that are designed to slow the pace of climate change, could hurt the U.S. market. “The cost to the market [by 2040] will be close to $3 trillion in missing [gross domestic product] and 6.5 million industrial projects, while families would have $7,000 less earnings and, in many cases, worse than that,”Trump said in a Rose Garden ceremony announcing their choice.

Those figures come from a single report prepared in March by National Economic Research Associates, an independent consulting firm. However, the report comes with a reason that is important , right there in a footnote on page : It’s not a cost-benefit investigation. In other words, the quotes Trump cited don’t take into consideration jobs any financial gains or costs avoided as a result of implementing electricity regulations. It’s a grossprofit, not a web. And this isn’t the only reason to consider Trump’s numbers with a grain of salt –economists cautioned with Politifact remarked that the economic model NERA uses makes a string of assumptions that typically generate higher prices, including supposing that industries won’t adapt to a changed regulatory environment.

This is nothing special to NERA. All models make assumptions that affect their results, which explains precisely why outcomes to project. Ideally, estimations should be based on the results of versions working with a set of assumptions and constraints. Isn’t a prediction but rather a selection of outcomes. Paradoxically enough, that is almost exactly what the Intergovernmental Panel on Climate Change does when reports are prepared by it such as those that resulted in the Paris Agreement. And this type of report does exist to its Clean Power Plan, the set of Obama-administration regulations that was supposed to help the U.S. fulfill the aims of the Paris accords. Ready in 2015 by the Center For Climate And Power Solutions, that report compared six versions, including NERA’s. Even though most of those models did not attempt to estimate the overall economic cost of their program, as NERA did, their findings show how different strategies can yield quite different results: The models showed that the plan could cost the electricity sector as much as $33.5 billion per year (since NERA found), or even rescue as much as $4.5 billion (according to a version in the Natural Resources Defense Council). The odds are that the real answer lies somewhere in the middle.

Health care: Who possesses health care?

In a speech in Ohio earlier this week, ” Trump once more asserted to reform and replace with the Affordable Care Act, talking with “victims” of their legislation and explaining a grim scene where “premiums are skyrocketing, insurers are imposing, as well as the American folks are paying considerably more for worse policy.” While there is little doubt that premiums will rise up in several states, or that insurance companies are leaving the economies, there is also growing evidence that the Trump government is largely to blame this time.

By way of example, in Ohio, Anthem announced it would stop selling plans on the ACA marketplace leaving people in more than a dozen cities without a means to purchase insurance that was subsidized. The insurance giant noted marketplace volatility and doubt, not even a failure to make a profit, as its reason for exiting. After several counties in the Knoxville, Tennessee, region were nearly left with no insurer, Blue Cross Blue Shield of Tennessee agreed to step in and extend plans, stating that, following three years of deficits, it had been doing better financially in 2017. It cautioned, however, that given all the doubt (there is that phrase again) from the marketplace, the state should expect steep rate rises therefore the firm could protect itself. In North Carolina, Blue Cross Blue Shield said it increases premiums by 22.9 % annually instead of 8.8 % since the Trump government hasn’t committed to paying insurers back to subsidies that they need to give to low-income enrollees to help pay for out-of-pocket expenses. In Pennsylvania insurers estimate premiums will rise by an average of 36.3 percent, instead of 8.8 percentage, if the government decides to not make those payments and repeals the individual mandate.

Some say marketplaces could have had problems this season even. But in most states, where the dust of implementing the Affordable Care Act had finally settled, numerous markets have been poised to do relatively well this season, with a increasing number of insurers reporting positive revenues for 2017. Which might be why polls have shown that the majority of all Americans, including Republicans, consider that the Republican party is liable for what happens with health care moving forward. While senators function to write a bill that will repeal and replace sections of the ACA, Trump has continued to assault law. “Obamacare is lifeless. I have been mentioning it for a long time,” he said in Ohio. The issue is, today that Trump is president while it’s true that he ‘s been a critic of former President Obama’s signature health care reform, it’s up to him determine whether his predictions of the ACA implosion will come true.

Instruction: Career counselor

Secretary of Education Betsy DeVos has been on Capitol Hill this week to shield Trump’s projected $59 billion budget for her department, which boosts spending on “school choice” plans such as charter schools and vouchers while slashing the department general spending $9.2 billion, or 13.5 percent. The department faces widespread reductions to fulfill that spending target, also at Tuesday’s hearing, one area where DeVos faced bipartisan opposition was the budget’s projected reductions to technical and career coaching applications. Missouri Sen. Roy Blunt said those reductions, amongst others, could be ” all but impossible to get through this committee.”

Slashing funding for technical instruction is a bit of an odd selection for Trump, who campaigned on a promise to produce tasks for blue-collar workers– exactly the people these applications are supposed to provide help. Trump’s education budget proposes a $166 million, or around 15 percent, cut to state licenses for vocational education plans in high schools, technical schools and community colleges. It also includes a $95 million cut to state grants for adult instruction applications that teach instruction and supply training in other basic skills people need to locate jobs. Relevant programs from different departments also face reductions; the Labor Department budget, as an example, will cut job training plans by 36 percentage.

Trump’s budget isn’t all reductions, however — it could raise financing for some programs intended to greatly help train workers, such as apprenticeship applications. (Trump recently praised Germany’s approach to vocational education, which relies heavily on apprenticeships.) And the government has argued that the Education Department budget reductions give more control on countries (as well as parents) while defunding applications that aren’t supported by evidence. But according to this week’s hearings, it seems unlikely that those arguments will carry the day in Congress.

from network 8 http://austresearch.com/the-kansas-experiment-is-bad-news-for-the-tax-cuts-of-trump/

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austresearch · 7 years ago

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The Kansas Experiment Is Bad News For the Tax Cuts of Trump

With apparently all of the political media focused on James Comey’s testimony on Capitol Hill, the most fascinating policy news of the week may have come in 1,000 kilometers off, in Topeka, Kansas.

Climate change: Costs and advantages

Health care: Who possesses health care?

Instruction: Career counselor

from austresearch http://austresearch.com/the-kansas-experiment-is-bad-news-for-the-tax-cuts-of-trump/

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solanosjelly · 7 years ago

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TrumpBeat: There Is No Pivot Welcome to TrumpBeat, FiveThirtyEight’s new weekly feature looking at how developments in Washington affect people in the real world.

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alecorrea75-blog · 7 years ago

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A email Friday, Aug. 18, 2017 Welcome to TrumpBeat, FiveThirtyEight’s weekly feature on the latest policy developments in Washington and beyond. Want to get TrumpBeat in your inbox each week? Sign up for our newsletter. Comments, criticism or suggestions for future columns? Shortly before 4 p.m. on Tuesday, President Trump walked up to a set of microphones in the lobby of Trump Tower to talk to reporters about what was once meant to be one of the signature issues of his administration: infrastructure. Armed with a visual aid — a huge flow chart that purportedly shows the federal highway permitting process — and flanked by senior aides and Cabinet members, Trump explained how a thicket of environmental reviews and other regulations slow infrastructure projects, and he announced a new executive order intended to streamline the process. “This overregulated permitting process is a massive, self-inflicted wound on our country,” Trump said. Then, of course, everything went off the rails. Trump spent most of the impromptu Q&A that followed the infrastructure announcement defending his response to last weekend’s deadly white supremacist protests in Charlottesville, Virginia, and arguing that the right-wing protesters — some of whom chanted Nazi slogans and carried Nazi flags — included some “very fine people.” It was, one might say, a “massive, self-inflicted wound” on Trump’s presidency. There is, perhaps, no better encapsulation of Trump’s first seven months in office than a press conference about the economy being derailed by a defense of — or at the very least equivocation about — white supremacists. Trump’s comments, and the near-universal condemnation they drew, have been much-discussed this week. But it’s also worth noting what wasn’t discussed as a result: the infrastructure plan that, in an alternate universe, could have been a lynchpin of a populist — and popular — Trump agenda. Increasing infrastructure spending was one of the few policy areas where Trump and Hillary Clinton were in agreement during last year’s campaign. Economists mostly endorsed the idea too; repairing the nation’s roads and bridges could create jobs immediately while also boosting the country’s long-term productivity. It’s not hard to imagine a world in which a newly inaugurated Trump scored an early bipartisan win by daring Democrats to vote against a plan that would directly benefit their states and districts (and that their presidential candidate had broadly supported). Instead, Trump chose to prioritize a divisive fight over health care, and he has seen his agenda repeatedly pushed from the headlines by distractions, mostly of his own making. His first days in office were dominated not by talk of policy proposals or Cabinet appointments but by a fight over how many people attended his inauguration. An early press conference announcing his new nominee for labor secretary devolved into an attack on the news media. A March speech meant to make the case for health care reform instead turned into a tirade against the 9th Circuit Court of Appeals. This week wasn’t even the first time that a Trump-induced controversy has distracted from infrastructure, specifically: The White House’s planned “Infrastructure Week” in June turned into a running joke on Twitter when the headlines were instead dominated by fired former FBI Director James Comey’s congressional testimony. Twitter jokes aside, it’s hard to assess exactly how damaging the various scandals and distractions have been to Trump’s policy agenda. It’s possible that a more popular, savvier president would have been able to round up the one additional Senate vote necessary to pass a repeal of Obamacare, but it’s far from certain; the repeal effort was undermined, as much as anything, by internal divisions within the Republican Party. Tax reform, similarly, would be hard to get done under any president — that’s why it hasn’t happened in three decades. And for all Trump’s failures on Capitol Hill, his administration retains the power to make major policy changes in immigration, criminal justice, business regulation and other areas. As we’ve noted before, it’s a mistake to label Trump a “do-nothing” president. But it would also be a mistake to think that the controversies and distractions — and Trump’s historic unpopularity — are having no effect on the president’s ability to govern. For one thing, they effectively guarantee that Democrats will be united in their opposition to all but the most trivial administration proposals. It’s notable that Democrats from red-leaning states, such as Sen. Joe Manchin of West Virginia and Sen. Heidi Heitkamp of North Dakota, have voted with Trump far less often than would be expected based on how handily Trump won their states in 2016. In a narrowly divided Senate, losing those votes can be the difference between a narrow win and a painful loss. Democrats have also held up Trump’s nominees for key administration posts, which could make it harder for him to enact his policies through executive action. And then, of course, there is 2018: Historical patterns suggest Trump’s unpopularity could imperil Republicans’ congressional majority in next year’s midterm election. Trump’s challenges will likely only grow following his Charlottesville comments. Numerous Republicans denounced Trump’s “blame on both sides” equivocation (though some have been more direct than others), and business leaders abandoned him in droves. Trump was forced to disband two advisory councils on Wednesday after their members — including the CEOs of some of the country’s biggest companies — organized a mass resignation. The councils were largely symbolic, but they were powerful symbols: Trump, the businessman-turned-president, rallying titans of industry to fix the American economy. This week, they instead became symbols of Trump’s mismanagement, lack of focus and increasing isolation. If Trump wants to get anything done, he’ll have to find a way to get out of his own way. Environmental policy: Still getting sued During last year’s presidential campaign, Trump repeatedly railed against the Environmental Protection Agency, saying it was an example of regulatory overreach by the federal government. One of the surest signs of that overreach, according to Trump’s EPA administrator, Scott Pruitt, is how often the EPA had been sued under President Barack Obama. “The previous administration … did not respect rule of law,” he told the Conservative Political Action Conference in February. “So when you do that, what happens? You get sued.” Those comments might suggest that Trump’s EPA was being sued less often than Obama’s, but that isn’t what has happened so far. Between Feb. 17, when Pruitt took office, and Aug. 2, the organization has been sued 50 times, according to records available through the federal electronic court records search. In contrast, the EPA was sued 57 times during roughly the same period in 2016,1 under then-EPA Administrator Gina McCarthy. And during the first year of the Obama administration, Lisa Jackson’s EPA incurred far fewer lawsuits — just 30 between February and July of 2009. The lawsuits being filed against Pruitt’s EPA have a lot to do with the rule of law, though now it’s often Democratic attorneys general and environmental advocacy groups filing them, instead of Republican attorneys general and energy companies. For instance, a lawsuit filed earlier this month by several environmental groups accused the agency of providing loopholes that would allow companies to circumvent laws governing the control of toxic chemicals. Meanwhile, the State of California sued the agency on Aug. 11 for failing to provide records that the state’s attorney general requested as part of an investigation into Pruitt’s alleged conflicts of interest. “Administrator Pruitt and the Trump administration are not above the law,” wrote California Attorney General Xavier Becerra in a public statement not all that dissimilar from the ones Pruitt used to make when he was Oklahoma’s attorney general. Now, as EPA administrator, Pruitt is forced to take the same sort of rhetorical challenges he once dished out. Health care: Costs and benefits The Trump administration on Wednesday said that it would go ahead with a key payment to companies that participate in the insurance marketplaces set up under the Affordable Care Act. Under normal circumstances, these “cost-sharing reductions” would be deep in the weeds of health care policy, but this week’s announcement drew “breaking news!”-style tweets and coverage because Trump has threatened to withhold the payments — a step that experts warn could send the insurance marketplaces into a tailspin. That threat has not passed, however: Trump’s decision drew quick condemnation from conservatives, and he’s only been agreeing to make the payments on a month-to-month basis since he took office. Cost-sharing reductions are discounts insurers are required to give to some of the lowest income enrollees on the marketplaces; at issue are the government reimbursements to insurers for these discounts. The government payments have a complicated — and ongoing — legal history. They were written into the ACA, but Congress refused to appropriate the funds to pay them. Obama paid them anyway, sparking a lawsuit by the House of Representatives against the executive branch. A federal court ruled with Congress last year, though it allowed the payments to continue while the White House appealed the decision. That suit is still wending its way through the courts. If Trump follows through on his threats to stop making them, the impact on the insurance marketplaces could be substantial. The Congressional Budget Office’s weighed in this week with a report finding that ending the cost-sharing payments would cause short-term chaos: Insurance premiums would rise by more than 20 percent for the majority of people who currently buy insurance on the ACA marketplaces, and many insurers would flee. Those findings follow previous work by the Kaiser Family Foundation that reached similar conclusions. The long-term consequences of ending the payments, however, are a little bit different. Under the ACA, lower-income people also qualify for subsidies to help them pay for insurance on the marketplaces. Those subsidies are based on premiums, so when premiums rise — as the CBO says they would if the cost-sharing payments end — so do subsidies. As a result, the CBO doesn’t think many people would actually lose insurance if the cost-sharing payments ended, because the government would pay the majority of the price difference. The increase in subsidies would, however, increase the federal deficit by $194 billion from 2017 through 2026, according to the agency’s estimates. For complex reasons tied to the structure of ACA subsidies, ending cost-sharing payments could also result in people having more coverage choices in the long-term.2 But a lot of things could change in the long-term, and likely will; the GOP has signaled it plans to keep pushing to repeal and replace parts of the ACA. What is more certain is that cutting the payments would cause chaos in the immediate aftermath, and the Trump administration would be left to deal with it. 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