On the surface it may look like the Tax Cuts and Jobs Act is bad for real estate. The reduction in the deductibility of mortgage interest and the combined $10,000 cap on state and local tax (SALT) deductions for income, sales and property, along with the elimination of moving expense deductions would make a compelling
Why don’t Americans want Jeb Bush to be President?
It is easier for me to answer your question by starting with who would want Jeb Bush as president. (I added an update at the end about what may happen now that Jeb! has left the race). There are two principal types of voters who would like to see George Bush’s younger brother (or someone in his mold) elected:
(1) A significant number of the wealthiest Americans (roughly the top .01%) and
(2) The surprisingly large number of mostly older white (and disproportionately male) citizens who have been manipulated into voting against their own economic interests by the highly effective propaganda paid for by the first group, but who can’t go so far as to vote for Trump.
That sounds cynical, but the facts bear it out. Let me break it down.
The first group wants Jeb or any mainstream Republican (though they are terrified of Trump) for entirely rational, if greedy, reasons. The United States today has the type of extreme concentration of wealth that characterized the Robber Baron-Gilded Age (1890s) and just before the Great Depression (late 1920s). The ultra-rich achieved this ascendancy in large part by controlling the politicians of both parties who make tax policy and who direct government spending. They have directed government policies toward increasing the concentration of wealth, sadly at the expense of the American dream.
There have been a number of interesting studies done about how social mobility is now much easier in “old” Europe than in the United States. The SuperPACS funded by extremely wealthy men like the Koch brothers hold enormous sway, leaving non-wealthy individual voters vritually powerless. The extremely rich have effectively bought the government through campaign contributions that translate into votes (see Citizens United, a 5-4 decision where all 5 were Republican appointees).
They have won and they want to hold onto their victory.
Tax policy is illustrative. Let’s start with how roughly 99% of all Americans pay federal taxes:
The working poor, the shrinking middle class and even the very comfortable professional class (doctors, lawyers, accountants, engineers — some whose incomes pace them into the 1% — but not the .01%) live off of their wages and salaries, as opposed to living off of investments or inheritances. They mostly earn “ordinary income,” which is taxed progressively at up to 39.6%, on top of other taxes.
Truly poor people, whose income falls below the minimum threshold for paying federal income tax, nonetheless pay a federal tax on their income (despite the Fox “news” propaganda that millions pay “no income tax“). It is called the “payroll tax” and it is a substantial part of poorer people’s paychecks.
If you are tempted to believe the Republican/Fox “news” line about 47% of the country not paying income tax, please research it from objective sources. Here is one good link:
The poor and middle class cannot build wealth in these times of outsourced jobs, absurdly low minimum wages, still-high (though improving) unemployment, part-time work, and automation. When good economic times come, the poor and middle are passed by entirely. A rising tide does not lift all boats any longer, but only lifts the mega-yachts. This is a relatively new phenomonen, and corrosive to the economy. Before the “Reagan revolution” and its tax cuts tilted toward the very wealthy, an improving economy did in fact lift people from all income levels, which made for better recoveries for all.
Today, fortunate people making $200,000 and more — and even those well into the top 1% of incomes — cannot accumulate wealth like the very wealthy .01% can. They are taxed at progressive rates and they spend their income on food, shelter, transportation and at the higher end, expensive private schools (necessitated in their minds by how poorly public schools have fared under the low-tax, low-service model of government that “conservatives” insist on).
In contrast, think about how the ultra-rich are taxed. Their income is largely passive: it comes from capital gains, dividends, interest on bonds, and other investment income. It is also “tax managed.” The capital gains tax rate is significantly lower than the top income tax brackets. Billionaires pay 20% on their income from capital gains; their accountants pay top rates of 35% or 39.6% (depending onwhich bracket they are in) on their regular income. Interest income on municipal bonds is taxed at zero. Have you heard of “1031 exchanges?” Anyone can sell one piece of real estate and put the gains in different real estate — and pay zero tax on the gain realized, under Section 1031 of the Tax Code (the tax is “deferred”, and can be deferred until extinguished upon death). This is NOT the sale-of-primary-residence exemption that common folks can do once — this is a special IRS rules that allows tax to be “deferred” on gains made on unlimited sales of real estate. So while a few average folks might do it once in a lifetime and pocket some small-potatoes gains tax free on a rent house or other investment property, a Donald Trump can make $100 million in profit on sale of a casino and pay zero tax on that gain. Then he can do it again — and again. There is no cap.
These are just some of the tax code provisions the ultra-rich use to reduce their tax rates. Look up the hedge fund manager’s special tax break called the “carried interest rule” for an especially absurd example of how the very rich own the system. Even Mr. Trump has denounced this one!
A Wal-Mart heir (or George Soros or Warren Buffett for that matter) can invest his or her billions entirely in U.S. municipal bonds — and live utterly tax free, entirely legally, on many millions of dollars in annual income. How can this be fair, in a country where the infrastructure that carries goods to markets, the court system that enforces property rights and the defense complex that protects us from foreign powers or terror — all paid for by tax dollars — is what allowed these extremely wealthy people or the ancestors they inherited from to accumulate such fortunes?
Apologists for the Republicans cannot factually challenge the fact that the very wealthy, who earn millions a year, pay a far lower tax rate than people earning a few hundred grand a year. Facts are a vexing thing for today’s GOP… See global warming, evolution, well the list is long, and off topic.
The skewing of the tax code to favor the extremely wealthy is how Mitt Romney paid 13.9% in tax on his fabulous income in the single year he released his tax returns to the public (And does anyone believe it wasn’t his highest year? Or maybe the only year he paid any income tax at all?) — while his staff members, pilots, drivers, and even landscapers paid at higher rates. How can this be fair, or even rational? The parallels to Rome before the fall are irresitable.
The IRS code says what it says. Politicians wrote it. Contributions to politicians are unlimited. (see Citizens United) Connect the dots.
In short, the system is rigged. The rich have been getting richer and the wealth gap has been increasing since the tax cutting began under Reagan and accelerated under George W. Bush. While Obama was able to raise the top income tax rate back to the level before the Bush tax cuts, he has been unable to do more to address inequality due to obstinate Republican opposition.
Republican candidates are required by big donors to sponsor even more tax cuts for the rich and block any attempts at making taxation more fair. Jeb Bush has repeatedly stated that he support his party’s stance on taxation. Marco Rubio has embraced it enthusiastically as well, as have Christie and all the even less successful candidates. Ted Cruz, a US senator running as an “outsider” because he has insulted all the “establishment” Republicans, proposes reducing taxes to a “tithe” of 10% — with a regressive VAT to make up some of the lost trillions in revenue. It is hard to take some of this seriously (after all, are we going to stop having a defense department? Default on military pensions? We have to have some revenues, don’t we?). But whether it makes sense or not, the very wealthy dictate what the Republican politicians say.
Do you recall what happened when Obama proposed a modest temporary surcharge only on incomes above $1 million (starting at the million and first dollar) to address the deficit caused by the recession? Unanimous Republican opposition blocked it. What percentage of citizens earn over $1 million a year in ordinary income?
Look up the current GOP platform on the party’s official website and ask yourself who these proposals help. They want to repeal the estate tax entirely — even though it only applies after the first $5.43 million passes to heirs, tax free. How many estates are worth over $5.43 million?
The fact you will never hear from a Republican, or on one of the media outlets that does their bidding, is that 99.8% of all estates pay no estate tax at all. The so-called “death tax” is largely a myth.
And no, the estate tax does not threaten “family farms.” Here is a quote from a recent news story you can look up:
Neil Harl, an Iowa State University economist whose tax advice has made him a household name among Midwest farmers, said he had searched far and wide but had never found a case in which a farm was lost because of estate taxes. ”It’s a myth,” Mr. Harl said. Even one of the leading advocates for repeal of estate taxes, the American Farm Bureau Federation, said it could not cite a single example of a farm lost because of estate taxes.
Look into Paul Ryan’s much-praised (by the Murdoch-owned press) budget proposals. Their main feature is yet another big tax cut for the rich.
All Republicans are bound to this policy of coddling the extremely rich. If any candidate deviates, even slightly, Republican fundraisers suddenly find a more compliant challenger to run against them in their own primary. Anyone who doesn’t “stay hitched” to the platform is labeled a RINO, a Republican In Name Only, and is promptly drummed out of office.
What happens when Republicans win the presidency? We have a very recent case study: the presidency of George W. Bush. He inherited a budget surplus (the first in decades, and the result of some good luck and compromises with Gingrich) from Bill Clinton in 2001. What did Bush-Cheney do with it? They immediately (well before 9/11) squandered it, putting the nation’s budget back into structural deficit with a big tax cut that mainly benefited the very rich. His first treasury secretary, Paul O’Neill, a lifelong Republican and former chairman of Alcoa, complained about going back into deficit spending to Cheney and was promptly fired. The book he wrote with co-author Ron Suskind, The Price of Loyalty, is worth reading.
Dick Cheney famously said at the time “It’s our turn,” in talking about the tax cuts — and “Deficits don’t matter” in response to the fact that the tax cuts would turn surpluses into deficits. You won’t find these quotes mentioned in the WSJ or on Fox “news,” but you can Google them. More inconvenient facts.
Tax policy is just one example of the rigged system and how the GOP favors the ultra-rich. Other examples include lax pollution enforcement under Republicans, big breaks that amount to corporate welfare for the oil and gas industry, and of course the ritual repetition of the “all regulation is bad” mantra that justifies letting the biggest financial institutions gamble with taxpayer money. These gigantic financial institutions, whose recklessness magnified the housing bust into the deepest recession since the Great Depression, have only grow larger. Their “Too Big To Fail” status exempts them from the discipline of the marketplace, resulting in socializing their losses, lest they bring down the whole economy with them.
Republicans are also reqired by their mega-donors to try to keep the poor from gaining any ground. They oppose any rise in the grossly inadequate minimum wage, claiming it would harm corporate profits. Corporate profits are soaring while workers subsist on minimum wages so low that nobody could live on them without public support. Wal-Mart was at one point handing out forms to its workers about how to get welfare and other forms of public assistance, acknowledging that nobody coud live on what it pays.
The wealthiest Americans have become far wealthier since the Reagan Revolution reduced taxes and regulations. Yet real wages for most Americans have stagnated since the 1970s:
Thus the subset of .01% who want a Republican president have a vested interest in electing one of their own, someone who will preserve and add to the preferences and privileges the super-rich enjoy. They prefer Jeb Bush, above all the candidates. He is one of their own. But they will take any mainstream Republican and are furiously trying to derail Donald Trump as the nominee, knowing Trump would be trounced.
The ultra-rich who wanted Jeb (but will now take any “mainstream” Republican) have the most fear of Democrats like Bernie Sanders and Elizabeth Warren, who see through the rigged system and wants to change it. They are quiet aboutit but far less fearful of the Clintons, Chuck Schumer, and other Democrats who have had a cozy relationship with the Wall Street elite — just not as cozy as Jeb Bush or Marco Rubio. Interestingly, the Uber-Rich fear one of their own, Donald Trump, far more than they fear Hillary. Hillary can beat them in an election or two, but Trump could ruin the party that has so reliably done their bidding for decades. His nomination could turn the party into a Eurpoean-style anti-immigrant fringe party, like the Le Pen movement in France.
Now turn to the second, far more numerous, group who want Jeb Bush or another Republican: the people who have bought the elaborate web of lies spun by the ultra-rich through their media outlets. This propaganda machine includes Fox “News”, The Wall Street Journal (both owned by Murdoch), the Limbaugh-Savage-Hannity talk shows, and largely untraceable dark money campaigns funded by the Kochs and Karl Rove’s list of contributors.
Some of the propaganda is crude and would be laughable — had it not worked so well in some demographics: Obama’s a Kenyan. His birth certificate is a fake. He’s not a citizen. He’s Muslim. He’s a socialist (and he’s coming for your guns!) Big Republican money paid for these lies to be spread in places where some ignorant people believe every word. Look up what Ted Cruz’s father said about Obama. Read what Donald Trump said about him. Michelle Bachman recently said Obama was going to bring about the biblical rapture and Sara Palin blamed Obama for her son’s girlfriend-beating arrest!
There have been many overtly racist attacks too — like saying Obama’s a monkey, and far worse.
The GOP has embraced racism and anti-immigrant rhetoric in order to pander to a part of the population who respond well to those issues, at the expense of their own very real economic issues. This has been Republican strategy since Nixon’s “Southern strategy,” and it has worked. Recall Reagan’s “welfare Cadillac” remark and Bush Sr’s Willie Horton ads. Now the most racist propaganda is handled with untraceable dark money so the candidates can maintain plausible deniability.
The GOP has also used and manipulated the religious right. Their dark money ads claim Obama is “ruining the institution of marriage” — code for he doesn’t think it’s right to have government discrimination against gay people. Do you really think the Koch brothers or Karl Rove care if a couple of lesbians have a wedding? Of course not! But they will see to it that millions of dollars are spent against Democratic candidates with “dark money” and PAC money that emphasizes attacks on candidates who support “gay marriage.”
Some Republican-controlled states have passed “religious freedom” laws, making it lawful to discriminate against gay people and in effect turn them away at the door at public places. The Texas attorney general has told county clerks that they do not have to obey the U. S. Supreme Court on granting marriage licenses for gay marriage… They know better. They are doing this to manipulate people through fear and misinformation — and as part of a plan to tag Democrats as being pro-gay, or anti-marriage. The Big Money people behind these campaigns use gay marriage as a wedge issue to convince religious voters to vote against their own economic interests, to keep politicians in office who will do the bidding of the .01%, many of whom chuckle at the gullibility of the people they are manipulating.
Sadly, a large number of Republican voters believe the propaganda, even its most extreme (and ridiculous) points:
The creators of this Big Lie propaganda machine — Fox, the radio shows, the “dark money” internet campaigns — thought they were making the angry white male much easier to manipulate into voting for a Republican “establishment” candidate like Jeb, who would continue to favor the ultra-rich with policy. But they have been hoisted on their own petard. Donald Trump emerged to hijack all the ignorance and anger created by the propaganda — and now threatens to derail the Rove-Koch-SuperPAC plan to capture the presidency after Obama. Trump (who is probably as liberal as most mainstream Democrates on most issues) has deftly captured the anger and channeled it into his column. The “establishment” Republican donor class, who thought Jeb Buch would take the nomination in a cakewalk, is shocked — and petrified. They can’t control Trump (nobody can) and so they are scrambling to find a way to stop him. They detest Ted Cruz, but may end up having to hold their noses and support him as a way to block Trump’s path to the nomination. Cruz has brilliantly played his hand as well, carefully coddling the Trump voter so they will slide into his column of Trump drops out, while tapping into the Religious Right’s core issues with his angry message.
The extremely wealthy backers of the Republican party have also funded a web of lies designed to ensnare somewhat more sophisticated voters into thinking Republicans will be “fiscal conservatives” who will soundly manage the economy. Often, this propaganda is not-so-subtly mixed with the racial messages, implying that Democrats favor “tax and spend” policies to coddle the “lazy” lower class. They brazenly claim — against all the objective evidence — that the GOP is the party of balanced budgets and “small government.”
But what’s the reality? The last Republican president (Jeb’s brother) orchestrated a massive swing from budget surplus to deficit (well before any justifications about spending to combat terror), started a needless and poorly conceived war in Iraq that ended up benefitting only Iran and Republican contributors like Halliburton, gave Big Pharma a HUGE new program of direct-pay of our tax dollars to the drug manufacturers under the so-called prescription drug benefits plan, an expansion of Medicare, and coddled the “too big to fail” financial institutions whose imprudent gambling led to the Great Recession — allowing them to keep their profits, while socializing their losses.
The rich got their big tax cut, but millions of jobs were lost, not created.
Republicans have in fact been the party of “big government,” directing taxpayer dollars to people and corporations who contributed heavily to the GOP. Look up what President Bush did with the bailouts — $182 billion to AIG alone, the largest seller of the credit default swaps, the toxic insurance-like instruments that multiplied many times the effects of the crash of housing prices. AIG in turn paid it out on claims filed by as required to pay the Too Big To Fail institutions like Goldman Sachs, who had (imprudently) purchased the credit default swaps from AIG as insurance against the collapse of the stinking piles of sub-prime loans these same TBTF institutions packaged up into collateralized debt obligations (CDOs). The TBTF institutions like Goldman Sachs did not bother to inquire whether AIG had the reserves to pay out on these insurance products before buying the swaps. Had they looked, they would have seen that AIG did not have such reserves — and was not required to by regulators because “all regulation is bad” and the “free market” will regulate businesses. That turned out to be yet another lie — thus the need for massive bailouts. Even Alan Greenspan has admitted that it was a huge mistake to not regulate these exotic finincial instruments that turned into what he labeled the “contagion” that spread a subprime morgage bust into a massive recession. Yet those who want Jeb or his clones press for even less regulation of Wall Street.
Non-wealthy Americans lost their jobs and homes in the Great Recession. The bankers and titans of industry who supported Bush got tax cuts, bonuses and bailouts. They kept their jobs of course.
Fox “news” and the GOP propaganda machine routinely blame Obama for the recession and unemployment — but the Great Recession of 2008-2011 (caused in large part by the culmination of politicians adopting the conservative manta that “all regulation is bad”) happened on Bush’s watch. The government bailouts themselves that followed were also put in place under Bush, well before Obama was elected. Obama was elected in time to try to clean up the mess — only to find that the Republicans in Congress would fight him every step of the way.
In the aftermath of the financial collapse, when newly-elected Obama tried to pass real financial reforms to prevent the same thing from happening again (like FDR did in 1933, when Glass-Steagall was passed and the SEC was created), Republicans blocked any meaningful reforms. They watered down Dodd-Frank — and now want to repeal the few real reforms made. Their slavish devotion to the TBTF banks and Wall Street titans has even angered some of their own party members, though these “tea party” types are quickly shut down when it comes time to state the party’s platform and nominate its candidate.
Enraged that Obama won despite the huge money poured into demonizing him, the GOP turned purely obstuctionist. It torpedoed the president’s plan for infrastructure spending that would have accelerated the recovery by employing millions to rebuild the nation’s crumbling roads, bridges, ports, dams and other infrastucture. This was an act of economic treason done in a failed attempt to prolong and even deepen the recession so the Republicans could blame it on the man in office and take over the presidency once more. Mitch McConnell famously said that his number one priority was not jobs or ending the recession — but was defeating Obama in 2012. He pursued this priority by systematically blocking meansures that could have accelerated the recovery. The GOP lost in 2012 too — but the damage they did to the economy by trying to make Obama look bad is still being felt.
Anyone who doubts that economic treason was official Republican policy should read the letter John Boehner, Paul Ryan, Mitch McConnell and others wrote to the Fed to try to stop the Fed from helping the country out of recession. Having blocked any more stimulus spending, they sought to choke off the fledgling recovery completley by also eliminating the Fed’s bond-buying program known as QE:
The Republican leadership wrote that QE would cause runaway inflation and weaken the dollar. Bernanke, a Republican and hardly a liberal, is a master economist whose life work was study of the Great Depression. He refused the GOP entreaty. The Fed went forward and did what it could in the face of the gridlock caused by GOP opposition to stimulus spending. The Fed’s steady hand helped the economy crawl out of the deep recession. Bernanke is very much a hero.
The Republicans’ cry that Fed action would cause “runaway inflation” and kill the dollar proved to be (as Bernanke knew it would be) completely false. The economy was in such bad shape that deflation was a far more serious threat than inflation. Today, several years after the dire warnings by McConnell, Boehner and their fellow travelers, inflation remains extremely low. The dollar is soaring Mortgage interest rates are the lowest in decades. These are unassailable facts that the GOP doesn’t like to talk about.
It is baffling that President Obama doesn’t use his bully pulpit to educate the public as to what the Republicans did and tried to do.
Republicans do not balance budgets; they expand deficits while giving away tax cuts and benefits to their largest financial supporters. That is not an opinion. It is fact.
Yet enough people have been manipulated by prejudice, lies and dark-money propaganda to make the Republican party viable. The smart guys who run things at the GOP (like Karl Rove) know they cannot win elections in the long run on these methods alone, so they employ voter suppression and other anti-democratic tactics to stop likely emocratic voters from being able to vote. Thus the “voter ID” laws (again, only in Republican-run states), the long lines to vote in a single voting booth provided to poor precincts — but short lines with scores of booths in rich precincts, the disenfranchisement of a significant portion of the black population through biased prosecutions, as felons cannot vote, etc. The Republican smart guys know they cannot win fair and square on the issues (given their slavish devotion to the super-rich, their slaps at Hispanics, their alienation of young people and most women), so they hide their intentions, put out propaganda and try to keep poorer people from voting.
Who does not want Jeb Bush as president? Two main categories:
(1) Angry Donald Trump voters who were stirred up by the very proganda machine put in place to elect a guy like Bush, which is beautiful to me in terms of poetic justice; and
(2) Those of us who:
(a) think the very fortunate should pay at least as much as their secretaries in taxes (rate wise), to support the system that allowed them or their ancestors to accumulate such massive wealth,
(b) want to build up budget surpluses in good economic times, so we have a cushion and can use it on deficit spending to temper the bad times,
(c) want good economic times to be shared across the income and wealth spectrum — not just gobbled up by the top .01%
(d) want reasonable people appointed to the Supreme Court instead of more right wing ideologues, hopefully leading to the overturning of Citizens United and allowing Congress to reform the way that big money dictates political results.
We do not want Jeb. But believe me, there are powerful people who do.
Update: Now that Jeb! has dropped out, The Republican establishment’s best chance is a brokered convention, where they can make back room deals and try to steal the nomination from the near-winner. They hate Cruz and cannot really bypass Trump for someone Trump has beat handily in every primary. My bet is that they will try to hand the nomination to unscathed, fresh-faced Paul Ryan. He is a well-spoken figure and completely loyal to the billionaire donors who back the Establishment. Ryan’s vaunted budget features more tax cuts for the super rich and unspecified cuts that amount to Flint water for the rest of us. He hasn’t been skewered by Trump, lied about by Cruz or lambasted by Christi, so he is relatively undamaged. Watch for him to emerge in coming weeks.
Republican establishment types (think Karl Rove) are well acquainted with the kind of shennanigans needed to wrest the nomination from Trump at the last minute. They are experts at stealing elections: by frustrating the right of students and minorities to vote, by limiting the hours polls are open, by creating long, long lines in poor neighborhoods (by providing fewer ballot boxes) while making it easy for people in Republican-leaning precincts to vote in short lines with abundant ballot boxes. Don’t get me started on “Voter ID” laws, which were blatantly passed by Republican legislatures to hold down the vote in minority communities.
They are experts at stealing elections — and I think there is a strong chance they will steal the nomination from Donald Trump. If so, he will be enraged and will bolt the party and run anyway. A reverse Nader effect is my hope.