our gullibility referendum

It now appears likely that Congress will pass an, you should excuse the expression," tax reform bill". The main components of that bill have become fairly clear. What is also more than clear is that this bill will have precious little to do about the tax code. It is almost entirely the implementation of congressman Ryan's trickle down economic fantasies. The tax changes, if looked at over the ten yearperiod of the bill rewards  those who have capital–corporations including sub - S corporations–and wealthy individuals. It has nothing to do with " reform" and change is very few provisions of the tax code. For instance, it doesn't even do away with the indefensible carried interest treatment given to such people as hedge fund managers. It simply changes a few tax rates, eliminates some deductions that the middle-class uses, allows businesses to expense capital expenditures rather than depreciate them over time which really only affects cash flows.

Ryan has been proposing schemes such as this since approximately 2008. At that time his proposals were created by economists at the heritage foundation. The analysis was published and deemed by impartial economists at Academic institutions, the IMF and the like as being" implausible". They deal with the deficits created by positing ridiculous multipliers of GDP from the tax cuts and claiming that this will increase tax revenues. That is what Pres. Reagan claimed and it didn't happen. He created deficits that had to be erased by the Clinton administration. Ryan's former proposals we're based on multipliers 5 to 7 times greater that had ever been observed. . The  deficit shrinking mechanism that will become mandatory will be  cuts in programs such as Medicare, Headstart, Food stamps and the like. These cuts were also part of Ryan's former proposals. People with incomes under $100,000 will over the period of 10 years actually pay more taxes, and also lose benefits. The series of articles by Dave Leonhardt in the New York Times lays all this out quite thoroughly.

The other quite nonsensical part of the claims of Ryan and his merry band of tax cutters is that giving tax cuts to corporate businesses will lead to capital expenditures and increased wages. Won't happen. The Democrats proposed an amendment that would take away tax cuts from businesses which do not increase wages. That went nowhere. There is no historical evidence to support the fact that corporations give wage increases when they do not have to. What corporate managers consistently say is that their job is to increase returns to shareholders. That is not done by increasing wages. On the capital expenditure side, White House economic adviser Gary Cohen asked a group of corporate CEOs if they would increase Capital expenditures if they received tax cuts. Practically none of them said they would much to Cohen's consternation.

So, the information is out there if the voters, particularly in the Midwest, care to think about it. It requires some effort. Will those voters be gullible enough to actually believe this bill is about tax relief for the middle-class? That is the referendum we face. Regrettably, I am not optimistic.