Thursday, November 30, 2017

It seems that Donald Trump is confident about passing his tax cuts

A planned meeting between Trump and "Nancy and Chuck" (the democratic party leadership in Congress and Senate) was abruptly cancelled. The operative part of Trump's tweet on the issue was that "there was no deal". Apparently everyone was supposed to meet in Donald Trump's office and decide what give and take would occur before the debt limit was raised on Dec 8th to allow the US government to function.

Anything that steps away from a "deal" on a debt limit rise usually attracts negative momentum on the markets, but around the same time the DJIA and BTC began to rally. This seems like the opposite of what one would expect.

I think this signals that Donald Trump is convinced he can pass the "tax cuts". Given how little his government has had to show for itself, he is keen to keep up the appearance that he is capable of delivering something - however ridiculous it may seem to others. During the earlier situation with the "Obamacare repeal" - there was the desire repeatedly expressed on Capital Hill by various GOPers - that they just wanted to "pass something" otherwise they would "look bad", Some of what we are seeing on the Tax Cuts or the "Cut Cut Cut Act" is that kind of sentiment. The GOPers are tired of looking like a bunch of complete incompetents who can't get anything done.

As we all have probably guessed by now, the GOP has drafted the bill and given how much the average GOP guy on the hill earns, the bill is largely designed to give themselves a tax cut and everyone else below them will be shafted. Most GOP voters and Trumpers are too stupid to grasp the fine print of the tax bill and will support it out of their tribal mentality or they will support it with the vague sense that it will somehow kill their peer competitors more than it will kill them personally.

It seems that Secy Mnuchin is lying when he says he has an analysis that the "tax cuts will pay for themselves". There is no such analysis. No one appears to have actually read a copy of the tax bill and I am sure that Mitch McConnell will use his usual tricks.

So given how badly this is driven by the desire to make it look like Trump and the GOP actually did something. My guess is that it will go through.

In other news - Roy Moore is back in the lead in Alabama. Again not surprising given its Alabama we are talking about.


At 8:13 AM, Blogger Ralphy said...

there is a small problem of college tuition assistance being considered as income under the proposed tax law. for graduate students this is especially grievous.

if this is not changed there will be major problems.

ditto for state and local tax deductions.

the real estate industry not happy with mortgage caps either.

if this crap is passed it will hit the fan.

At 8:50 AM, Blogger maverick said...

I don't think GOP much cares for college educated people - they don't exactly vote GOP.

The pro-Trump GOPers want to do something to make it look like they are not completely worthless.

The anti-Trump GOPers want to hasten his demise. As you point out, the Tax plan should achieve that admirably.

JMHO - but it should pass with a 54:46 partisan vote.

At 8:54 AM, Blogger maverick said...

I thought it would not pass as both the GOP and Trump would compete for ownership and given how the tax cuts have to translate into specific gains for each GOPer, there would be too much fission to allow the cuts to actually pass.

But the GOP has largely kept a highly fluid text, the bill has things in there that appeal to both Pro-Trump and Anti-Trump factions and as there is no one single text, it is anyones' guess what is actually going to be passed with the vote.

I would not be surprised if a bait and switch is pulled multiple times in the text. A lot of GOPers are going to find out that the text is not what they were told it is going to be.

They really haven't had time to work out the details and they are trying to cram too many of Trump's wish list items into the text.


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