To hear Republicans tell it, the fate of the universe (and their electoral prospects) rests on whether or not they can pass a tax-reform bill by the end of the year. It’s rather curious, then, that on Thursday, the House G.O.P. released a plan that seemed calculated to repulse as many people as possible. The winners, of course, are the ultra-wealthy and corporations. And while the bill is supposed to deliver, in the words of Donald Trump, “one of the greatest Christmas presents” to the masses, the losers hail largely from America’s middle class. Republicans, of course, are still selling this whole thing as a major boost for working-class families, based on the (thoroughly debunked) claim that the tax-savings companies generate from slashing the corporate rate will ultimately trickle down to workers.
Unsurprisingly, some are wondering how the Tax Cuts and Jobs Act will be different from Bush tax cuts, which did a lot for the rich but blew out the deficit and failed to juice the economy. Also unsurprisingly, House Republicans don’t have a good answer. Asked by a reporter on Thursday why he was “certain that this will be different,” given that the “Bush tax cuts did not result in growth or higher wages or more jobs,” House speaker Paul Ryan pawned the question off on House Ways and Means Committee Chairman Kevin Brady, who did not remotely answer the question. “This is a complete redesign of the code, so we can simplify it so much that 9 out of 10 Americans can file by using a postcard-style system,” Brady said, insisting that lower rates would boost the middle class. “We’re not just putting higher-octane fuel in the old clunker of a tax car—we propose to drive a newer tax car that can compete and win against any country in the world.”
Amazingly, less than 24 hours later, Brady was forced to walk back one of his primary selling points for the G.O.P. plan. “Taxpayers will not be able to fill out a postcard-sized piece of paper to file their tax returns based on the House G.O.P. tax plan,” Axios reported after speaking with the Ways and Means chair. Brady announced that he will “offer an additional amendment making more substantive improvements to the bill” next week. What those improvements might be, only he knows. But the larger problem for Republicans, and taxpayers, remains: who the hell are these tax cuts for? The Bush tax cuts blew up the deficit, but at least their broad effects made them popular, unlike the Trump plan, which has only 25 percent support. The current G.O.P. bill, meanwhile, which has a little something to annoy everyone, doesn’t seem to have any obvious constituency beyond the corporations that would see the biggest benefit. They can’t vote, but they can talk with their wallets, which just might be enough.
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Trump wants to fire head of agency designed to protect consumers, but is worried about turning him into “a hero for the left”: report
On the list of things Republicans hate, the Consumer Financial Protection Bureau falls just under “food stamps” and “lazy Americans.” The Grand Old Party has railed against the agency, which is designed to protect consumers from abuses in the financial sector, since its creation in 2010 in response to the financial crisis. To hear Congressional Republicans tell it, the C.F.P.B. simultaneously treats banks as second-class citizens and goes door to door stealing hard-working Americans’ money. House Financial Services Committee Chairman Jeb Hensarling has likened the C.F.P.B. to “a dictator,” and in June the House passed a bill that would gut the agency. And while the Choice Act has not made it to the Senate, last month Republicans scored a victory when Vice President Mike Pence cast an 11th-hour tie-breaking vote to overturn the C.F.P.B. rule that permits class-action lawsuits against banks and credit unions, essentially forcing customers into mandatory arbitration. On Wednesday, at the bill signing making the repeal official, the president and Republicans got to brainstorming. Per CNBC:
Rep. Jeb Hensarling, who chairs the House Financial Services Committee and will retire at the end of his term in 2018, remarked that President Donald Trump would expend less energy undoing the C.F.P.B.’s actions if he removed [C.F.P.B. chief Richard] Cordray. . . . In response, Trump went around the room and asked what he should do about Cordray, who has three months until the Feb. 1 filing deadline to run for governor of Ohio. According to three of the attendees, the view shared by Trump and the White House view is not to make Cordray a “martyr”—the assumption being that ceremoniously ousting him would afford him hero status among the left and fundraising momentum in a key swing state. Hensarling and Rep. Sean Duffy were said to push doggedly for Cordray to be fired, suggesting they could write letters to expedite the process. But a White House official notes the views were not unanimous, with Rep. Patrick McHenry disagreeing with his Capitol Hill colleagues. As the signing was scheduled to wrap, White House chief of staff John Kelly entered the room and suggested the discussion be taken “offline,” according to three attendees. Kelly’s entrance into the Oval Office, in the words of one attendee, ended the conversation “in a New York second.”
Republicans open to making wildly unpopular tax bill so, so much worse
Despite claiming that come Monday the G.O.P.‘s terrible tax bill will morph into something everyone will love, reports circulated Friday that Brady is open to making a change that would take the legislation from massively unpopular to near-universally reviled. At an event hosted by Politico, the House’s lead tax writer said that the final bill could include a measure scrapping Obamacare’s individual mandate. Getting rid of the mandate would save hundreds of billions of dollars, but only because some 15 million people would go uninsured. But it would potentially doom the tax bill, in the same way it ultimately torpedoed Republicans’s attempt to repeal and replace the Affordable Care Act over the summer. “The president feels very strongly about including this at some step before the final process,” Brady said, noting that there were “pros and cons” to adding the measure. At this point, it’s unclear if Brady is just humoring Trump, who tweeted about his desire to jettison the mandate earlier this week, or if he’s seriously considering taking his advice. (Representative Mark Meadows, the divisive Freedom Caucus chair, told Politico that there is an “overwhelming consensus” to tie some sort of Obamacare repeal to tax reform, and that other Republicans “aren‘t shooting [the idea] down altogether.”)
Steph Curry has no idea why he was the only person referenced in the G.O.P. tax plan, either
“It was weird, that’s about it,” Curry said Thursday night of Republicans’ decision to use him as an example of a scheming rich person who might theoretically take advantage of the proposed 25-percent tax rate on pass-through businesses. “There’s a lot of people wondering why I was called out, whatever the case may be, but mama, I made it.” We’re sure that the president‘s feud with the Golden State Warriors player had absolutely nothing to do with it—pure coincidence.
Trump’s Fed chair pick satisfies his 1 percenter prerequisite
While Jerome Powell is probably one of the more qualified people in an administration that includes Rick “What do energy department do?” Perry, Betsey “What’s a public school?” DeVos, and Scott “Who needs clean air?” Pruitt, the fact that he is fantastically wealthy presumably helped his case with Donald “[I want] a rich person to be in charge of the economy” Trump.
Powell, who is already a Fed governor, is a former Carlyle Group executive and investment banker. Most reports have pegged his wealth at as much as $55 million. His actual net worth could be double that. The $55 million figure comes from his most recent financial disclosure form. But that form leaves off much of the value of what is likely Powell’s largest asset, his investment in the Vanguard Total Stock Market index fund. Powell’s investment in the fund is listed on the form as “over $1 million,” and so most reports have valued the holding at the seven-figure mark. But Powell’s disclosure also says he received as much as $1 million in income from the fund in the past year. The dividend yield of the Vanguard Total Stock Market index fund has been 1.71 percent over the past 12 months. For Powell’s investment in the fund to generate that much income, it would have to be worth as much as $58.5 million, putting his total potential wealth at more than $112 million. The fact that arguably one of the most important people in the economy is also among the top 0.1 percent—nearly 800 times richer, even after adjusting for inflation, than Paul Volcker was when he headed the Fed—could shade Fed policy. Perspective matters. For example, when the Fed under Ben Bernanke lowered interest rates to near zero and kept them there, critics contended he was hurting savers. But the only savers hurt were really wealthy ones. Bernanke, thankfully, shrugged off the criticism. Would someone worth 40 times as much with more of a Wall Street sensibility do the same?
Unemployment Hits 17-Year Low as Job Growth Rebounds (US News)
Trump’s Fed pick Powell Will Continue Yellen’s Path “Unless He’s Crazy,” Says Ex-Fed Vice Chair (CNBC)
Private-Equity Firms Have a Beef with Tax Bill—But Things Could Be Worse (W.S.J)
Cohn Says New Mortgage Deduction Limit Won’t Hurt Housing Market (Bloomberg)
Dark Side at Fidelity: Women Describe Culture of Bias, Revenge (Bloomberg)
Goldman Sachs C.E.O. to Join Trump in China (CNN Money)
Cryptocurrencies’ Market Cap Hits Record $200 Billion as Bitcoin Soars (Reuters)
Wells Fargo Says It Faces Lawsuits Over Mortgage and Auto Loans (Reuters)
Goldman Retreats from Options as Stock Derivatives Trading Struggles (W.S.J)
Airbnb offering a night in Denmark’s ‘Lego House’ (UPI)