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Economy

As the GOP banks on the tax bill for preserving majorities, their real threat is the economy

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As the GOP banks on the tax bill for preserving majorities their real threat is the economy

Republicans believe their tax cut bill is the first step in winning enough during the midterm elections to preserve their majorities in the House and Senate. It’s absolutely necessary following the Obamacare repeal debacle. If they finish their first year with control of the House, Senate, and White House without passing any meaningful piece of legislation, voters will rightfully wonder what they’re doing in DC in the first place.

The tax bill is not a guarantee they’ll win. In fact, passing it will temporarily hurt their chances. As David M. Drucker pointed out, the bill is unpopular at a time when a majority of Americans want Democrats in control on Capitol Hill:

Republicans stake control of Congress on tax bill

http://www.washingtonexaminer.com/republicans-stake-control-of-congress-on-tax-bill/article/2643895Republicans are counting on the Tax Cuts and Jobs Act to change the minds of unhappy voters who would prefer to have the Democrats in charge on Capitol Hill by an 11-point margin and consistently rate Trump’s job performance at around 40 percent, according to polling averages.

That’s a tall order for a proposal that has been underwater for weeks and is viewed skeptically by upscale suburban voters in Republican strongholds who worry it will raise their taxes. A fresh Monmouth University survey pegs support for the package at just 26 percent; 47 percent disapproved.

Drucker and Republican strategists agree that passing it launches a new campaign: selling it to the American people. How the GOP tries to sell it will determine their success in the midterm elections. If they go down the road of telling people they’re better off because of this cut or that change, their message will be completely ineffective. Leftist mainstream media isn’t on their side, which means they need more than facts and figures to convince people the tax bill is a good thing.

They need emotion. They need to make it personal. To do this, they’ll need to attach the tax plan to every piece of good economic news that comes in for the next 10 months while shifting blame for any negative economic news. They need to learn from the mistakes the Democrats made in attempting to defend Obamacare. The healthcare bill was more popular in its early days than the GOP tax plan is today, so Republicans have to work both harder and smarter if they’re going to avoid massive losses.

Avoiding the Obamacare defense mistakes

Republican majorities in the House and Senate are 100% due to Obamacare. They used it to get conservatives rallying behind them more than ever, especially through the Tea Party movement. Democrats failed to defend their policy because they weren’t willing to accept any responsibility for its shortcomings.

The GOP needs to own up to the shortcomings of the tax plan when they pop up, then redirect overall blame. An example of this will be the incessant stories about families in New York or California who end up paying more taxes thanks to cuts in state and local deductions. The Democrats and the media will find some suburban middle-upper class family who had to sell their home and move into a cramped apartment thanks to unexpected tax hikes hitting their bottom line. This is a fair point that the Democrats and media will make just as it was fair for Republicans to point out how people lost access to good healthcare because of Obamacare.

The Democrats played the “isolated case” card and it didn’t work. To avoid this mistake, the GOP will need to own up to the fact that somewhere around 20% of taxpayers, mostly in very blue states, will see their taxes rise. They need to then redirect it back on the blue states themselves, demonstrating how these states have become addicted to high taxes and had to lean on deductions from federal taxes to make up for it. This will be challenging for Republicans in these states to keep their seats, but many have simply opposed the bill to protect their own chances of reelection. It may be enough to distance themselves. As for all the other Republicans, their narrative should be that California and New York need to rein in their tax and spend mentality to protect their own people rather than reliance on federal breaks to make up the difference. Why should these blue states penalize red states by overcharging taxes and sucking up these breaks?

If it sounds like a tough case to make, that’s because it is. Nevertheless, there’s no better narrative for defending their home turf than to say the Democrat-controlled states are the ones paying their fair share now that the new tax plan is in place.

That’s the defensive message. The positive message will be attributing fiscal success to the tax cuts at every level. Americans who have more money come tax time can thank the tax cuts. Increased job and wage numbers can thank the corporate tax cuts. Every company that moves operations back to the United States will do so because of tax cuts. If money is good, it’s because of the tax cuts.

There’s a potential problem with this strategy. What if the economy doesn’t do so well in 2018? The economy is looking great, but did it peak too early? Can the nation sustain strong economic indicators all the way through to election day? That’s a question that concerns the standard financial crystal balls out there. These are tumultuous times in the United States and around the world. The GOP desperately needs all indicators to be strong, attributed to tax cuts, and showing no signs of weakness if they’re going to be able to maintain their majorities.

If things start to go south with the economy, the best ally for pushing Republican victories in 2018 will become their worst enemy. He sits in the Oval Office.

The wild (Trump) card

As long as the economy can continue down the road it’s on, President Trump and Republicans on Capitol Hill should get along just fine. If things turn south and questions start getting asked, expect the President to put all the blame on the Republican-controlled Congress.

This is why the Democrats want so badly for the economy to start failing. It’s not just the standard good-money/bad-money narratives that come into play every election. President Trump magnifies it in both directions. If the economy continues to thrive, he’ll take all the credit, including “his” tax plan. That should be just fine for Republicans on Capitol Hill as it will mean they can keep their majorities. If the economy starts having problems, President Trump will turn against the House and Senate. Doing so will hurt the economy even more. Then more blame. Then worse economy. It we be a domino effect that reaches far and wide across the nation.

Financial indicators may end up determining whether President Trump helps the GOP or hurts it.

The sad part is we shouldn’t need the GOP to use subterfuge and politics to sell their tax plan. If they did as the Federalist Party would do (dramatically cutting national budgets and spending while committing to true tax reform rather that cuts within the current progressive system) the GOP could let the results do the selling for them. Instead, they have to hope for certain things to happen while manipulating the narrative to support their premise.

Christian, husband, father. EIC, NOQ Report. Co-Founder, the Federalist Party. Just a normal guy who will no longer sit around while the country heads in the wrong direction.

Economy

House bill will rein in Trump’s abuse of trade powers

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As much of the nation focused yesterday on the Supreme Court and who Trump would nominate to fill the seat being vacated by Anthony Kennedy’s retirement, Rep. Mike Gallagher (R-WI) was busy working on a bill that would limit Trump’s authority to levy tariffs.

Under Gallagher’s bill, Congress would reclaim its constitutional authority by requiring the president to obtain congressional approval before levying tariffs “in the interest of national security.” This bill is in response to Trump abusing his power to levy tariffs under a provision in the law that allows him to do so on an emergency basis when national security is threatened.

Gallagher’s measure is a companion bill to a Senate measure co-sponsored by Pat Toomey (R-PA) and Mike Lee (R-UT) designed to “rein in the executive branch’s power to impose (tariffs)” and to empower Congress to “assert its Constitutional responsibility and lead on trade policy.”

The recessionary/depressionary consequences of Trump’s self-declared trade war are beginning to take their toll. US companies in various industries are making plans to move operations overseas to avoid the financial impact of tariffs while others are laying off employees due to skyrocketing prices on steel.

To be fair, tariffs haven’t been all bad, especially if your name is Trump.

Trump managed to leverage his tariff threats against China to haul in over $500 million to finance Trump golf courses and hotels in Indonesia and secure trademarks for his and Ivanka’s business interests in China. And Ivanka’s questionably ethical payday has continued as we have just learned that her clothing empire—exclusively manufactured in various Asian countries because MAGA™–is exempt from Daddy’s recent 25 percent tariff on $34 billion worth of imported Chinese goods.

It looks like Trump won’t be backing down anytime soon. It was last week that we learned that Trump is working on a bill he hopes Congress will consider that would shift ALL tariff power from the legislative branch to the executive branch. Known as the U.S. Fair and Reciprocal Trade Act (FART Act), Trump’s proposal would give him Emperor-like power to levy tariffs anywhere anytime and for any reason.

Would Congress ever pass such a law? Who knows?

A few weeks ago, the Senate Finance Committee grilled Commerce Secretary Wilber Ross over Trump’s trade-war strategy in light of the administration’s kid-gloves handling of China and of retaliatory tariffs against the US by Canada, China, Mexico, and the EU. It’s tempting to get excited when Republicans get fired up and appear to be doing their job, unfortunately Mitch McConnell always shows up to throw water on the flames, turning the excitement into ashes.

As the election draws near and with the GOP officially rebranded as the Party of Trump, I find little reason to hope that efforts to rein in Trump’s abuse of power will succeed.

Originally posted on The Strident Conservative.

 


David Leach is the owner of The Strident Conservative. His daily radio commentary is distributed by the Salem Radio Network and is heard on stations across America.

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Economy

Emperor Palpatine would love Trump’s U.S. FART Act

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Ever since Trump officially launched his self-declared trade war earlier this year, countries around the world have been lining up to retaliate against his arbitrary use of tariffs—the Senate Finance Committee recently called it “knee-jerk impulses”—in his pursuit to advance his anti-free trade, protectionist agenda.

In January, Trump lobbed the first economy-killing grenade when he imposed tariffs on imported solar panels and residential washing machines. Weeks later Trump launched a second round of attacks with across-the-board tariffs of 25 percent on steel and 10 percent on aluminum.

Following the second round of attacks, Trump’s trade advisor Peter Navarro appeared on FOX Business Network to assure America that Trump knew what he was doing and that fears of a trade war were misplaced because no country would dare retaliate for Trump’s tariffs.

Obviously, with retaliatory tariffs being leveled by Canada, China, Mexico, and the EU, Navarro was not only wrong in his conclusion, but we now find ourselves in the throes of a trade war, with casualties here at home such as we witnessed recently with Harley Davidson’s announcement to move some production overseas to avoid tariffs.

Additionally, the price of steel has doubled, causing layoffs and possible business closures for smaller businesses. For example, last week Mid-Continent Nail announced layoffs for 60 of its 500 employees and may be forced to relocate to Mexico to survive Trump’s trade war.

But don’t worry. Trade wars are “good” and “easy to win.”

Already guilty of abusing his authority to level tariffs—he can only do so as a matter of national security—and in true “Damn the torpedoes! Full speed ahead!” fashion, Trump is working on a bill he hopes Congress will consider that would shift tariff powers from the legislative branch to the executive branch.

The U.S. Fair and Reciprocal Trade Act would give the president power to level tariffs anywhere, anytime, and for any reason. Former White House Communications Director Anthony Scaramucci refers to Trump’s proposal acrostically, calling it the U.S. FART Act because it “stinks.”

Personally, I think a better nickname for it is the Emperor Palpatine Act because it gives Trump…

I would like to believe, as the editorial board of National Review does, that Congress would never consider surrendering its Article 1, Section 8 power to “lay and collect Taxes, Duties, Imports, and Excises” to any president, especially Trump. But when you consider that they already allow Trump to abuse his authority to impose tariffs—national security, remember?—not to mention that efforts to rein him in have been shot down by Mitch McConnell and other Republicans sold out to Trumpism, I’m not so sure FART wouldn’t fly if given its wings.

Case in point: We need only remember how Sen. Bob Corker (R-TN) successfully led the charge to surrender the Senate’s Constitutional authority to approve treaties to Obama during the Iran deal to know just how feckless Republicans can be when dealing with unpopular issues.

Originally posted on The Strident Conservative.

 


David Leach is the owner of The Strident Conservative. His daily radio commentary is distributed by the Salem Radio Network and is heard on stations across America.

Follow the Strident Conservative on Twitter and FacebookSubscribe to receive podcasts of radio commentaries: iTunes | Stitcher | Tune In | RSS

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Economy

What do Democrats and Obamacare have in common with Republicans and tax cuts?

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During the Obama administration, the most obvious example of the disastrous consequences of making laws in this fashion is Obamacare—legislation negotiated behind closed doors and so full of special interests that Nancy Pelosi famously stated that Congress had to pass the bill before we could find out what was in it. Obama also provided cover for Obamacare before and after its passage with his now-famous repeated lie: “If you like your plan, you can keep your plan.”

Trump and the GOP have created an Obamacare moment of their own with the Tax Cuts and Jobs Act (TCJA).

Like Obamacare, TCJA was so massive and contained so many special interest considerations—mostly to corporations and donors—that it was hammered out behind closed doors, and under McConnell’s Pelosi-inspired instructions, TCJA could not be read by Senators until after it passed the Senate. And just like Obama before him with Obamacare, Trump kept the details of the tax cut plan hidden while spreading the lie that it would provide “the biggest tax cuts in history.”

The folks at InfoWars.com said that Trump’s promise had an Obama-esque “if you like your money, you can keep your money” ring to it.

The similarities between Obamacare the Trump tax cuts don’t end there. In the same way that much of the damage from Obamacare wasn’t known until after it became law, the damage from Trump’s tax cuts are now being revealed.

A previously unnoticed change to the tax code included in the TCJA has been discovered that imposes newly created taxes on churches, synagogues, and other non-profit organizations of 21 percent on employee benefits like meals and parking, forcing these organizations, regardless of size, to pay taxes for the first time ever. This is a costly burden when you consider that many nonprofit organizations operate with small and/or volunteer staff.

Rep. Michael Conaway (R-TX), who is apparently one of those who didn’t read TCJA before voting for it, is trying to fix this “oops” moment, but House Ways and Means Chairman and Trump loyalist Kevin Brady (R-TX) is defending the stealth-like tax grab because it will provide “parity”—GOP-speak for fairness—regarding taxing employee compensation.

Parity has nothing to do with it. From day one, Republicans targeted charitable deductions as a source of income to offset the massive tax breaks they were giving big business and special interests. Failing to get as much as they had hoped from adjusting deductions, the GOP went after the recipients of those donations.

This is why the Tax Cuts and Jobs Act was created behind closed doors, why nobody could read it before voting, and why Trump lied to protect it. It’s also a sign that our great Republic is quickly approaching its end.

Originally posted on The Strident Conservative.

 


David Leach is the owner of The Strident Conservative. His daily radio commentary is distributed by the Salem Radio Network and is heard on stations across America.

Follow the Strident Conservative on Twitter and FacebookSubscribe to receive podcasts of radio commentaries: iTunes | Stitcher | Tune In | RSS

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