Nov 01 2017

About That Tax Cut

Look, a tax cut for, as Lambert terms them, squillionaires is a bad idea on its face for many reasons (none of which are that it adds to the National Debt or Budget Deficits). $4,000 (and that’s just the average, most people get less than nothing) may seem like a lot if you express it in terms like ‘Happy Meals’ (800 of them but maybe you have more than 2.2 kids) a high end mattress (about 3) or a zippy computer (well, it depends how zippy but you can do 2 pretty good ones). It’s much less impressive measured against your cable TV bill (are you paying less than $100 a month?) or psychotherapy ($200 a week and worth every penny).

Speaking of, if you are invested in the bubble market (sure they look pretty and Spongebob loves them but are they a better “store of value” than tulips?) on the basis of that big, fat, juicy Happy Meal tax cut you may just want to, ahem… adjust your asset allocation to reflect the developing news that Trump thinks it’s a good idea to pair this massively unpopular program with an even more massively unpopular program, one that has been shot down in flames at least half a dozen times- Trumpcare.

Trump throws curveball in tax talks, says bill should include Obamacare changes
By Damian Paletta, Washington Post
November 1, 2017

President Trump on Wednesday said congressional Republicans should make a major change to their upcoming tax cut bill by including changes to the Affordable Care Act, an idea that has divided the GOP for months.

The idea had already been rejected one day earlier by House Ways and Means Committee Chairman Kevin Brady (R-Tex.), who had said it risked bogging down the process. But Trump, in two Twitter posts Wednesday, pushed the idea, which has gained currency with some Senate Republicans. The biggest proponent of the idea is Sen. Tom Cotton (R-Ark.).

In his Twitter post, Trump is referring to a provision of the Affordable Care Act known as the “individual mandate,” which is a penalty that some Americans must pay if they don’t have health insurance. The Congressional Budget Office has estimated that repealing the individual mandate would save more than $300 billion over 10 years and lead to about 15 million fewer Americans having health insurance because of a range of effects.

On Tuesday, Brady was asked about combining this change with his bill to rework the tax code, and he dismissed it during a radio interview with Hugh Hewitt because he was skeptical that the Senate would be able to approve the health-care portion after multiple failed attempts.

“Look, I love these ideas from senators on health care, but what my constituents are looking at are for action on health care from our senators,” Brady said. “The Senate has yet to pass (a bill killing) the individual mandate. I’m still hopeful they can find a way forward. What I don’t want to do is to add things that could again kill tax reform like health care died over there. So I say focus on jobs and growth and leapfrogging America to the lead pack worldwide.”

Be careful what you wish for. Of two evils The Donald is the least effective.