Friday, October 13, 2017

Lee Fang — Koch Brothers’ Internal Strategy Memo on Selling Tax Cuts: Ignore The Deficit

The billionaire brothers Charles and David Koch spent much of the eight years of the Obama presidency stoking fears about the budget deficit. Their political network aired an unending cascade of campaign advertisements against Democratic politicians, sponsored several national bus tours, and paid organizers in communities across the country to mobilize public demonstrations, all focused on the dangers of increasing the deficit.
One such ad even warned that government debt would lead to a Chinese takeover of America — which, for many voters, is a concern linked to debt. Another effort, also quietly bankrolled by the Koch network, used Justin Bieber memes to try to reach millennials about too much government borrowing.
Now that Republicans control all levers of power in Washington and the Koch brothers are poised to reap a windfall of billions of dollars through tax cuts, they have a new message: Don’t worry about the deficit.
The Intercept obtained a messaging memo from the Koch brothers’ network on how to sell tax reform legislation. The memo went out to members of the network of likeminded Republican donors, which includes dozens of wealthy investors and business executives.
The talking points suggest that backers of the tax cuts feel vulnerable to the charge that the tax cuts will jack up the deficit.
“In case it is helpful to you in your own discussions with lawmakers and others,” the memo begins, “below is a list of talking points that address some of the key hurdles to passing tax reform this year.”
The memo goes on to encourage lawmakers to avoid becoming distracted by deficit concerns when passing the GOP tax reform package (emphasis added):
“Avoid getting distracted on revenue neutrality; economic growth increases revenues. Some Republican Senators have expressed concern over supporting comprehensive tax reform that adds to short-term deficits. Though we fully appreciate those concerns, the long-term economic growth that would result from the first comprehensive tax reform in a generation would help to offset short-term deficits over time. That was the result of the Kennedy and Reagan tax reforms—there’s no reason this time will be any different.”...
Hypocrites.

13 comments:

Matt Franko said...

they are not hypocrites they are proposing the Laffer-style tax cuts AT THE SAME TIME that will allegedly increase the rate of deposits into the TGA so it won't effect the deficit...

André said...

They are hypocrites in a lot of ways, but they're not here.

The message is clear. They are still worried about the deficit, and they always will be. That is in their DNA, and nothing will change that. So, I'm sorry, they are not changing their minds on that subject as the article implies. The article is dishonest - maybe as dishonest as the Koch brothers themselves.

Their message is that the tax cuts will indeed raise the debt (which is indeed a problem to the Koch brothers) in the short run, but in the long run it would bring growth and more tax revenues. So, in the long run, the deficit would be reduced, which is good in their views. No hypocrisies here, just a dishonest article.

For MMT, of course, this is all bulls**t. The debt doesn't matter. It may rise or fall, it simply doesn't matter. And it would be better for everyone if there was no law imposing a limit to it.

Tom Hickey said...

They are hypocrites because they are against deficits when Dems are in and for them when the GOP is in.

Actually, the Dem deficits owing to spending are more stimulative than tax cuts, since the propensity to consume is a lot greater in the case of spending. A good portion of tax cuts will be saved, which is like no tax cut at all from the macro perspective. This is a big reason that tax cuts don't pay for themselves. The assumption they go to increased domestic productive investment is flat out wrong historically.

André said...

"The assumption they go to increased domestic productive investment is flat out wrong historically."

Agreed. But in their views, it is not wrong. And it's not incoherent. They are true to their (wrong) views. That article is nonsense.

Tom Hickey said...

We have a running debate about moron or liar.

I come down on the side of liar as the default unless it can be shown that ignorance was involved. When it pays someone to be ignorant about things that affect their interest, it's not likely to actually be ignorance.

Moreover, there is culpable ignorance.

"It is difficult to get a man to understand something when his salary depends upon his not understanding it." — Upton Sinclair.

No pass for the Kochs from me on this.

André said...

Well, I guess our difference is that I come down on the side of moron as the default unless it can be shown that lying was involved.

But actually my point is that the article is ill conceived. The Koch brothers did not change sides.

Observation: that CAPTCHA thing is really not working. It is becoming harder and harder to prove that I'm not a robot. I'm almost believing that I'm actually a robot.

Matt Franko said...

theyre libertarians Tom so they have a strong bias which may appear to you as "lying"...

They see the tax cuts as reducing the authority of the govt institution so they go with that every time... spending increases they see as increasing authority so they are against that..

So they can come up with stuff like the Laffer thing to confirm their bias...

Being biased is not 'lying' its stupid... ie they are morons...

Matt Franko said...

Tom you also self-identify as 'libertarian of the left' along with many others in the MMT camp so you are biased too in that you may not want to see the problem with these people is their libertarianism in the first place...

You guys should probably drop your 'libertarian' handle... its some bad shit.

MMT runs on authority via the govt institution... its just the way it is...

Matt Franko said...

The other thing is that dont just dismiss the Laffer thing in this case .... the tax rate will effect the savings rate during any fiscal time interval...

Taxpayers have to accrue tax payments during any fiscal interval and the higher the rates the more that has to be accrued which will effect 'the deficit'...

If govt lowers the rate, then less has to be accrued (saved) to pay taxes...

What we've never seen is a situation where there are tax cuts AND AT THE SAME TIME the govt holds the rate of TGA withdrawals CONSTANT...

This could turn out to actually reduce the deficit while increasing GDP even though govt holds TGA withdrawals near constant...

Since we use an accrual withholding type tax scheme, the tax rate will effect savings rate (ie the deficit)...


Tom Hickey said...

The basic libertarian position, both left and right, is that government is about control, and control is against freedom.

Government needs to controlled itself, or some interests will capture it and use it for their purposes.

This is the historical norm, and it was true of the US right from the founding. It's right in the US Constitution.

Matt Franko said...

It's not control it's regulation...

Matt Franko said...

Govt doesn't control things it regulates things...

Tom Hickey said...

It's not control it's regulation...

That is the difference between the conservative and liberal POVs.

Arch-conservatives or reactionaries are authoritarians, e.g., monarchists. Arch-libereals are libertarians aka anarchists.

There are various positions along the range.