Tax magicians

The GOP in the House is about to start muddling through tax reform. As it has become a pattern, the big initiative relies on Paul Ryan’s legislative dreams, in this case his proposal, still called “A Better Way”.

A little media offensive followed: the House Committee on Ways and Means unveiled their big announcement and began to saturate social media with the excerpts from their main supporting document, a report prepared by the “non-partisan” Tax Foundation.

Congressional GOPniks as if on cue started to share the gospel. Rodney did, of course, and so we had to have a look at what the shining future brings us…

A lot. Rodney assured us that $5,256 more will land in an average Illinoisan’s pockets, and the GDP will grow 9.1% above the levels expected under the status quo. Nice, right? How would they achieve that, one marvels?

Elementary, it turns out. You don’t even have to learn anything about taxation to understand how.  It works like this:

Open the Tax Foundation’s report. In the middle of the page, look for the Table 5. The Tax Foundation experts computed how much each tax innovation concocted by Speaker Ryan would improve – or hurt – the GDP growth. These impacts sum up (we checked) to the promised 9.1%.

Now, two of them affect the individuals’ incomes. One eliminates “all itemized deductions except for the mortgage interest and charitable contributions deduction”, and is expected to add to the budget $2.331 trillion over 10 years. As it is a tax increase (all tax increases are bad!) it will slow the GDP growth by 0.4%.

Now, a few lines below that, the impact of reducing the number of income brackets is analyzed (inter alia, they bump up the rates for the poorest taxpayers, but what’s a few thousands between friends, let’s not get distracted). The Tax Foundation estimates that this will reduce the tax burden, subtracting from the budget revenue $1.954 trillions over the same 10 years. According to the report, this will accelerate growth. By how much, you’ll ask? – by 1.5%.

This is pure genius. You increase tax by some amount, then simultaneously decrease tax by about the same amount and expect the overall effect to be zero? No Way! As Tax Foundation has it, it will accelerate the growth by 1.1%! That’s truly A Better Way, growth created out of thin air… (Why stop there, actually? Why not add and subtract 20 trillions: nobody will notice, but the GDP will accelerate by 11%And if you accelerate GDP at will, your average income will grow just as readily, making you and everyone richer and richer and richer…)

This level of dissembling cannot fail to amaze.  A big, presumably respectable (not really) think tank publishes a study which is supposed to prove inherent goodness of the GOP big important tax proposal. The study however is wrong, wrong well beyond repair, and yet the House committee starts to popularize it left and right as the prima facie.

But deep inside, are we actually surprised? Not really, – after all,  the budget submitted by the current administration was just as fraudulent, based on overcounts and omissions. Why should we expect anything better from the GOP-ruled Congress, which enables the administration? It was to be expected that Speaker Ryan would plainly cheat. It was no surprise that Rodney Davis just does not have a mental register in his mental hardware where a doubt in the Party Line could be recorded.

But still, this level of dishonesty does add urgency. The ruling Party seems to be ready to gamble with our livelihoods with sadistic abandon. If we want to survive, as a democratic, wealthy society, we need to stop this madness.

Step by step – starting with retiring Rodney, this hapless robot meekly retweeting red hot lies.


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