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Thread: Mnuchin Scams the Tax-Cuts, claims they pay for themselves

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    Mnuchin Scams the Tax-Cuts, claims they pay for themselves

    Treasury released a one-pay document, that says that the tax-cuts will pay for themselves, contrary to every analysis of the tax bill.

    How did he do it? It's easy, make unfounded assumptions about economic growth. By the way, this report, such as it is, wasn't done by the over 100 people in Treasury “working around the clock on running scenarios for us.” It just seems to be made up and there wasn't any staff assigned to any major analysis.

    Mr. Mnuchin’s Magical Math on Taxes

    It [the report] projects a budget surplus created by 2.9 percent annual growth in gross domestic product over 10 years — that’s more than 50 percent faster than the most recent forecast by the nonpartisan Congressional Budget Office. Half of that growth would come from corporate tax cuts, the other half from other tax cuts and regulatory reform and from “infrastructure development and welfare reform,” neither of which has advanced past the talking stage.

    Scott Greenberg, a tax analyst at the conservative Tax Foundation, called the one-pager “a thought experiment on how federal revenues would vary under different economic effects of overall government policies. Which is, needless to say, an odd way to analyze a tax bill.”

    No other analysis — not from Congress, bipartisan tax policy groups, economists, past Republican Treasury secretaries — supports these claims. Instead, most experts say the bill would add at least $1 trillion to the debt.
    Paul Krugman weighed in too:

    Steve Mnuchin Pulls a Paul Ryan

    Even reporters hardened to Trump administration lies seemed shocked by the brazenness of this bait-and-switch. What made Steve Mnuchin, the Treasury secretary, think he could get away with it?


    Well, one answer is that similar scams on the part of congressional Republicans, Paul Ryan in particular, have generally received highly respectful treatment from the news media. Why shouldn’t Mnuchin imagine he can pull off the same trick?

    ...
    About that Treasury report: The department has an Office of Tax Policy, or O.T.P., which provides “economic and legal policy analysis” for tax policy decisions. Normally we’d expect this office to carry out a full analysis of the effects of Republican tax bills, similar to those conducted by Congress’s Joint Committee on Taxation and by independent, nonpartisan organizations like the Tax Policy Center.

    But either O.T.P. didn’t do that, or it did an analysis that Mnuchin is suppressing. (The department’s inspector general is investigating what actually happened, because Mnuchin repeatedly claimed to have such an analysis in hand.) If the experts actually did do an analysis, they probably found what everyone else has found — namely, that tax cuts come nowhere near to paying for themselves.
    "I never meant to say that the Conservatives are generally stupid. I meant to say that stupid people are generally Conservative. I believe that is so obviously and universally admitted a principle that I hardly think any gentleman will deny it." --J.S. Mill

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    Re: Mnuchin Scams the Tax-Cuts, claims they pay for themselves

    To my knowledge the CBO doesn't predict economic growth.
    And a 2.9% growth rate is like low level for a healthy economy.

    It should be in he 3-4% range.
    So their calculation is not far off.

    We will have to see what happens.

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    Re: Mnuchin Scams the Tax-Cuts, claims they pay for themselves

    Quote Originally Posted by ludin View Post
    To my knowledge the CBO doesn't predict economic growth.
    And a 2.9% growth rate is like low level for a healthy economy.

    It should be in he 3-4% range.
    So their calculation is not far off.

    We will have to see what happens.
    Actually, the post-war annual real GDP growth rate is 2.9% -- factoring in the growth after the war, the baby boom, etc. In modern times, a 3.0% 10-year sustained growth in unheard of -- the closest coming under Clinton. Thus, to rely upon a 3% 10-year growth to make the tax-plan pay for itself is not only fantasy but gives us an indication about how the number was derived. They simply backed into the number to give them the p% needed to make the calculation work.

    "I never meant to say that the Conservatives are generally stupid. I meant to say that stupid people are generally Conservative. I believe that is so obviously and universally admitted a principle that I hardly think any gentleman will deny it." --J.S. Mill

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    Re: Mnuchin Scams the Tax-Cuts, claims they pay for themselves

    Quote Originally Posted by MTAtech View Post
    Actually, the post-war annual real GDP growth rate is 2.9% -- factoring in the growth after the war, the baby boom, etc. In modern times, a 3.0% 10-year sustained growth in unheard of -- the closest coming under Clinton. Thus, to rely upon a 3% 10-year growth to make the tax-plan pay for itself is not only fantasy but gives us an indication about how the number was derived. They simply backed into the number to give them the p% needed to make the calculation work.

    your graph shows that it can be done and it has been done.
    again the CBO doesn't predict economic growth it can't. In fact no one can.

    If people could predict the market and the economy we could easily avoid recessions.

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    Re: Mnuchin Scams the Tax-Cuts, claims they pay for themselves

    Quote Originally Posted by ludin View Post
    your graph shows that it can be done and it has been done.
    again the CBO doesn't predict economic growth it can't. In fact no one can.

    If people could predict the market and the economy we could easily avoid recessions.
    Which is exactly why it shouldn't be factored in.

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    Re: Mnuchin Scams the Tax-Cuts, claims they pay for themselves

    Quote Originally Posted by ludin View Post
    your graph shows that it can be done and it has been done.
    again the CBO doesn't predict economic growth it can't. In fact no one can.

    If people could predict the market and the economy we could easily avoid recessions.
    As MrPeanut said, that's why it's presumptuous to factor it in. It's clear what they did: 'Let's see, how much economic growth will we need in a 10 year period to make this massive tax-cut on the rich pay for itself.' 1%? No; 2%? No; 3%?, ah, that's it. We're going to have 3% growth for 10 years straight and that proves that the tax-cuts pay for themselves." Really, how stupid does Munchkin think we are?

    They provide no methodology as to how they derived 3%, no analysis at all. They are merely asserting. If this was an ECON 101 paper, they'd get an F.
    Last edited by MTAtech; 12-12-17 at 11:53 AM.
    "I never meant to say that the Conservatives are generally stupid. I meant to say that stupid people are generally Conservative. I believe that is so obviously and universally admitted a principle that I hardly think any gentleman will deny it." --J.S. Mill

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    Re: Mnuchin Scams the Tax-Cuts, claims they pay for themselves

    Quote Originally Posted by MrPeanut View Post
    Which is exactly why it shouldn't be factored in.
    yet that is exactly what he is doing when he says that it won't pay for himself.
    the fact is we need a new tax structure that promotes growth and gives more money to people.

    i have run the numbers on myself. i do pretty well under the new tax structure and better under the senate plan.
    my federal taxes drop by quite a bit from where they are now.

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    Re: Mnuchin Scams the Tax-Cuts, claims they pay for themselves

    Quote Originally Posted by ludin View Post
    yet that is exactly what he is doing when he says that it won't pay for himself.
    the fact is we need a new tax structure that promotes growth and gives more money to people.

    i have run the numbers on myself. i do pretty well under the new tax structure and better under the senate plan.
    my federal taxes drop by quite a bit from where they are now.
    Why do we need a new tax structure that lavishes the wealthy with tax-cuts and raises taxes on the middle class? Oh, I know -- because Republican donors demanded it. It has nothing to do with economic growth. Every other analysis said that this will do little for economic growth. It's merely a Robin Hood in reverse wealth transfer.

    Moreover, the Senate version throws millions off of health insurance.

    Medical doctors will tell you that the first thing you do is No Harm. The current tax system is superior to the proposed one.

    I seem to remember that Trump promised that the carried interest deduction would be eliminated and that loopholes would be closed. The carried interest rule remains and there are more loopholes.

    I'll save lots of money flying my private jet to my golf course under this bill.
    Last edited by MTAtech; 12-12-17 at 12:00 PM.
    "I never meant to say that the Conservatives are generally stupid. I meant to say that stupid people are generally Conservative. I believe that is so obviously and universally admitted a principle that I hardly think any gentleman will deny it." --J.S. Mill

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    Re: Mnuchin Scams the Tax-Cuts, claims they pay for themselves

    Quote Originally Posted by ludin View Post
    yet that is exactly what he is doing when he says that it won't pay for himself.
    the fact is we need a new tax structure that promotes growth and gives more money to people.

    i have run the numbers on myself. i do pretty well under the new tax structure and better under the senate plan.
    my federal taxes drop by quite a bit from where they are now.
    Who are you talking about? I'm fine with the idea of a middle class tax cut. I don't support the tax cuts on the wealthy as I think that will lead to cuts in programs that will negatively impact people from the poor to the middle class.

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    Re: Mnuchin Scams the Tax-Cuts, claims they pay for themselves

    Quote Originally Posted by MTAtech View Post
    As MrPeanut said, that's why it's presumptuous to factor it in. It's clear what they did: 'Let's see, how much economic growth will we need in a 10 year period to make this massive tax-cut on the rich pay for itself.' 1%? No; 2%? No; 3%?, ah, that's it. We're going to have 3% growth for 10 years straight and that proves that the tax-cuts pay for themselves." Really, how stupid does Munchkin think we are?
    your using the same argument to say it won't work. that is double speak. You can't say that it is valid here but not valid there.
    either both are valid arguments or they both are not.

    more than likely they took the optimistic value vs the pessimistic value. really to be better off they should have taken the 3 point estimation.
    which is (Optimistic+ 4(most likely) + pessimistic)/6

    that would give them a value then the SD for this would be (pessimistic-optimistic)/6 or in this case (optimistic - pessimisctic)/6

    so lets say that 3 is their optimistic value and 2.0 is the most likely and that 1.5 is the pessimistic.
    so the SD is about +- .25

    this is based on PMP PERT analysis

    (3+4(2)+1.5)/6= is about 2.08
    with a SD of

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