Hillary’s plan to shrink the economy

"The economy is here, and with my plan it would be" -- lowers hand -- "here."

“The economy is already down here, and with my plan it would be (*lowers hand further*) here.”

If you find your wallet is a little too fat these days, Hillary Clinton has a tax plan for you. It doesn’t even matter how much money you make; Hillary’s plan would take some of it away.

You might not see that from looking at the outlines of the plan, which calls for increasing tax rates only on those who earn at least $1 million, with an extra 4 percent “surcharge” on those who earn at least $5 million a year. But the number crunchers at the Tax Foundation also looked at her plan on a dynamic basis, taking account of the way her plan would affect the economy and the resulting, additional effects on tax revenues. You may be used to seeing such analyses for Republicans’ plans, pointing out that if a tax change stimulates growth by cutting tax rates, the reduction in revenue won’t be quite as large as predicted on a “static” basis. (This is not the same thing as saying taxes totally “pay for themselves,” as is often incorrectly claimed by proponents and, especially, opponents of tax cuts.)

Well, the reverse is true, too: If a plan would hurt economic growth by raising tax rates, then that will ultimately make for a smaller revenue boost than a static analysis would show.

The upshot: Rather than raising $498 billion over a decade, the Tax Foundation estimates Hillary’s plan would put only an extra $191 billion in federal coffers over 10 years. Normally, I’m all for smaller tax increases rather than bigger ones. There are just two problems here: First, her plans to grow government in virtually every facet come with an estimated price tag of $1 trillion over 10 years. That’d blow an even larger hole in an already growing deficit.

The second problem is that the tax increase would be smaller than expected because it would reduce economic growth an estimated 1 percent a year. Capital investment would fall by 2.8 percent a year. The job market would get a real double whammy: Not only would the plan kill some 311,000 full-time jobs, but it would reduce wages by about 0.8 percent.

In short, raising taxes only on “the rich” doesn’t harm only them.

Now, back to what I said at the top about your own wallet. No matter where you fall on the wage scale, you’d take about the same hit:

Tax Foundation Hillary Jan 2016

Stagnation in wages is one of the biggest problems this country faces. And that stagnation owes in large part to the sub-par economic growth we’ve experienced for more than a decade. After real GDP grew an average of 3.5 percent during the Eisenhower through Clinton administrations, that rate fell to 2.1 percent under George W. Bush and 1.2 percent during the first six years of Barack Obama’s presidency (full-year 2015 data are not yet available, but growth in the first three quarters of the year was right around the average for those same months in the previous five years).

Taking another percentage point off a trajectory already well below our historical average would be crippling to our future. Whatever economic problem you want to identify, the best antidote is faster growth in a healthier economy. Hillary Clinton’s tax plan would bring us the opposite.

Reader Comments 0

43 comments
RafeHollister
RafeHollister

@Hedley_Lammar You are in favor of prison for a fake ID, which most underaged folks have possessed at one time or another, but not for willful gross negligence in handling the nations secrets.  Secrets which probably resulted in some operatives being endangered.  


Where is the poutrage that you displayed over CIA office worker Valerie Plame being outed?  

Hedley_Lammar
Hedley_Lammar

 President Bush’s budgets hid billions with elaborate budget gimmicks. They took war-spending off the books, tried to eliminate the costs of wildly expensive tax cuts for the wealthy, and claimed savings through unrealistic, unspecified future cuts in vital discretionary spending.


Pretty easy  to have lower deficits when you are cooking the hell  out of the books.

LilBarryBailout
LilBarryBailout

Funny--including the off-budget stuff, Obama has increased the debt more than Our President Bush.

All while lowering incomes, increasing inequality, and increasing poverty.

Awesome.

AvgGeorgian
AvgGeorgian

Trickle down has not worked yet because the pot of money is not yet full enough. Right now, the 62 richest people in the world own as much wealth as the bottom half of the world's population. When only 10 people own as much wealth as the bottom 75% of the people, I bet we will see that trickle flow like crazy. You just got to believe.

LilBarryBailout
LilBarryBailout

Seven years of failed Obamanomics...lower incomes, higher income inequality, more greed, banks more powerful than ever.

AvgGeorgian
AvgGeorgian

@LilBarryBailout

Trickle down is not a republican or democrat idea - it is the idea of the wealthy carried out by bought tax policy from both parties.

Hedley_Lammar
Hedley_Lammar

@AvgGeorgian @LilBarryBailout You have to pair it up with convincing the rubes that some poor smuck getting 100 bucks a month for food stamps is the real problem.


While they continue to get richer and richer.

Lil_Barry_Bailout
Lil_Barry_Bailout

Soooo...Obama has been practicing trickle-down economics? By raising taxes on the productive, creating vast new handout programs, regulating companies out of business, and hassling job creators non-stop? You're delusional.

lvg
lvg

More right wing economic nonsense here. 


Kyle won't admit that Cons are fully responsible for  increasing the deficit with three unfunded wars and free Medicare drugs for the elderly and a nearly 500% increase in the military budget under Bush while cutting taxes.


Maybe Kyle will tell us what GOP has done since Obama took office to increase jobs and productivity particularly since controlling the House and Senate. Corporations and the 1% have more cash and wealth stashed away than ever.


 The only trickling down is when the Cons take a leak that I see.

Lil_Barry_Bailout
Lil_Barry_Bailout

All of W's deficits were less than any of Obama's, so your rant has zero credibility right from the start. And you might want to check your defense spending claim, too. Laughably false.

Lil_Barry_Bailout
Lil_Barry_Bailout

W's largest deficit was $458 billion (2008). Obama's smallest is $485 billion (2014).

Source: whitehouse.gov

lvg
lvg

@Lil_Barry_Bailout Absolutely right- that's why he should have cut the military budget in half, not bailed out the banks and the states ( excess unemployment funds paid out) and raised taxes on evrryoneto pay off the deficit the first year in office.Also abolish Reagnacare and make everyone pay for ER treatment if not insured.Aso abolish W's free drugs for the elederly and tax Social Security benefits.

Hedley_Lammar
Hedley_Lammar

@Lil_Barry_Bailout  W's largest deficit was $458 billion (2008). Obama's smallest is $485 billion (2014).


Yes


Because Bush conveniently left the Iraq war off the books. 

Lil_Barry_Bailout
Lil_Barry_Bailout

The figures I quoted include off-budget items.

What else ya got?

UtahDawg
UtahDawg

@Hedley_Lammar And then I said...socialization of the economy in the name of economic justice  will lead to prosperity for all....Hugo Chavez. Free markets work which is why US economy is double the size of our closest rival even in spite of misguided fiscal policy almost by every president that has grown the size of gov and the deficit...the only respite was during the Clinton years when he was forced to enact the contract with America so save his political rear.  


The average American has a life far better than the vast majority of the World and this is directly a result of Capitalism...what's left of it anyway. Capitalism requires freedom in order to operate...one key component is the right to your own labor in the form of relatively low taxation rates so that the individual is motivated to better their lot in life and take risks through investing resources in productive endeavors. Higher taxes suppress this mechanism and misallocate valuable resources to the inefficient public sector...take this far enough and you end up with Greece, Puerto Rico, or Venezuela...eat the rich at your own peril. 

RafeHollister
RafeHollister

@Hedley_Lammar @UtahDawg No one is poor because of some rich person.  


If the poor shoot holes in the high riding boats the rich are piloting, how does that help the poor,  just puts more folks in the water.

Mrs Ellie
Mrs Ellie

The Tax Foundation is a conservative think tank... their conclusions are less than surprising.


Also, your calculation of GDP growth under Obama as 1.2% is disingenuous, as it is giving full credit to the  -2.8% decrease in 2009 that he inherited from W.  Surely you knew that though?

Hedley_Lammar
Hedley_Lammar

@Mrs Ellie The Tax Foundation says they have done a dynamic study and Democrats are bad for the economy.


Shocked. I'm stunned.

Wascatlady
Wascatlady

 Part of Nathan Deal and the state legislature's plan to shrink the Ga economy:  Refuse to expand Medicaid.

RafeHollister
RafeHollister

@Wascatlady Like expanding Medicaid wouldn't greatly increase taxes, which is harmful to growing the economy.

Hedley_Lammar
Hedley_Lammar

@RafeHollister @Wascatlady Yeah  that is why the economy exploded after Clinton raised taxes in '93


This state has tax giveaways for companies like Gulfstream that dont need them.


But a program that the feds will pay 90 percent of that provides care for the poor.  No way.


Instead our tax dollars are helping those in other states. How dumb is that.

Hedley_Lammar
Hedley_Lammar

@RafeHollister @Wascatlady Its the reverse of the lottery. Alabama residents buy lottery tickets in Georgia which helps Georgia.


We refuse Medicaid  expansion  so those federal  dollars help other states.



Its just dumb. Deal is doing it as some sort of heroic stand against Obama. Not because it makes economic sense. 

lvg
lvg

@Hedley_Lammar @RafeHollister @Wascatlady Anyone want to mention all the rural hospitals closing in Georgia due to lack of public funding. Reagancare at the ER doesn't pay the bills. Of Course Cons are more concerned about guns, tax breaks, redistricting and budget reductions than healthcare.

Hedley_Lammar
Hedley_Lammar

@RafeHollister As long as corporations can stay here and leave  their money overseas tax free they aren't going anywhere


That way they benefit from US infrastructure without actually helping pay for it.

Lil_Barry_Bailout
Lil_Barry_Bailout

@Hedley_Lammar @RafeHollister

Laughably ill-informed.

Just this week, Johnson Controls and Tyco announced they'd be doing a tax inversion to escape the leftist's double-taxing profits earned outside the U.S.

RafeHollister
RafeHollister

Three biggest problems with Hillary's redistribution plan.  1) She has to avoid the pokey, 2) She has to convince folks to ignore her dishonesty, ineffectiveness, and unethical behavior and vote for her. 3) She has to get this confiscatory plan passed in a GOP controlled Congress.  Other than that, she is on her way.


The Dems seem to think they can continue to spend and spend forever, as long as they can peddle that utopian falsehood that the rich, who pay about 86% of all federal income taxes aren't paying enough, while those who pay next to nothing, will pay even less, yet get all this new free stuff.  


People who are this economically challenged have no business leading this country.

Hedley_Lammar
Hedley_Lammar

@RafeHollister You guys dont seriously think Clinton is going to jail do you ?


Petraeus didn't and he knowingly gave up top secret stuff to his mistress.

RafeHollister
RafeHollister

@Hedley_Lammar @RafeHollister It is the scale of the crime, Petraeus a few limited secret documents to one person, Hillary thousands of documents, many TS and SAP, available to our enemies, the Chinese, Russians, Iranians.  Petraeus was punished severely, so I'd take the same against ole Hillary even tho her crime was worse.  She is so entitled, old and decrepit, we can show her a little mercy.  Just don't punish America by electing her to the oval office.



Hedley_Lammar
Hedley_Lammar

@RafeHollister @Hedley_Lammar Ahh  its the scale


Petraeus knowingly doing something. No big deal. It was only a few documents. 


Hillary's emails. Much  bigger deal. Because there are more you know


And BTW the Russians and Chinese can get into Govt servers just as easy if not more so than private ones. They have in the past. 


Bottom line if Hillary wasn't running for President nobody would give a damn about her emails. Just like they didnt care when Bush used buhs43.com to send emails and "lost" millions of them. Americans aren't going to care about this.

lvg
lvg

@Hedley_Lammar @RafeHollister It is different if you are head of CIA whispering top government secrets in your mistress's ear  than if you are a Democratic Secretary of state communicating with your personal  computer . I guess Cons think Hillary was having an affair with her computer Just like Bill.

Caius
Caius

For we conservatives Hillary is not the problem.  The problems are sitting in the Republican Party and running for President.

Do we suffer a RINO in the White House for 8 years, or do we take Hillary/Bernie for 4 years and take the White House in 2020? 



xxxzzz
xxxzzz

@Caius Trump-a Democrat.  Cruz and Paul-Libertarians.  Rubio-A Republican version of Obama.  We really need Jeb!, Kasich or Christie.

RoadScholar
RoadScholar

If the conservative Tax Foundation is against Hillary's plan after stating trickle down and tax breaks would balance the budget or at least reduce the deficit, I'll side with Hillary. Oh and right now she does not have my vote.

Hedley_Lammar
Hedley_Lammar

The Tax Foundation is a very conservative group as well


Thier "dynamic" scoring was never going to be kind to Mrs Clinton.


They would never support raising taxes on " job creators "


That would stop the trickle.

Hedley_Lammar
Hedley_Lammar

 In short, raising taxes only on “the rich” doesn’t harm only them.


Trickle down you see. If only we could do the reverse and give them more money. 


Imagine the results !!!!