taxes – Advance the Dialog

Presidential Debate 3: Jobs & Growth

Though I was shocked to realize that neither education nor healthcare—two giant issues—were chosen as topics for any of the 3 debates, in the end, it’s still ‘the economy, stupid’. Through all the diversions, and outrageous, unseemly and sad degradation of this election, that is still the take away for me.

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Whatever you think of the candidates, too many people really are suffering as the American Dream drifts further and further away, and that’s not going to change until we deal with our chronic reality of stagnant wages and low growth. That is why, though the official topics are Debt & Entitlements, Immigration, Economy, Supreme Court, Foreign Hot Spots and Fitness to be President, I am focussing on the Economy and Jobs for my debate Questions in this blog.

For Secretary Clinton:

On your website under An Economy That Works For Everyone, you say you will fight to pass a plan in the first 100 days to invest in infrastructure, manufacturing, research and technology, clean energy, and small businesses.
ATQ: Could you give one specific example of how you would invest in each of those categories? Also, in which of those areas will the most jobs be created?

Under Jobs & Wages, you write that you will: Advance our commitment to research and technology in order to create the industries and jobs of the future.
ATQ: What are the jobs of the future? What percentage of the unemployed could realistically be retrained for those jobs? Please Cite The Basis for your answers.

You also claim you will ensure caregiving and services jobs of the future are good-paying jobs.
ATQ: How will you ensure this when healthcare costs are running out of control? Again, Cite The Basis for answers.

Under Manufacturing, you plan to: Strengthen American manufacturing through a $10 billion investment in “Make it in America” partnerships that bring together workers and labor, business, universities, community colleges, and government at every level to harness the strength of manufacturing communities across America.
ATQ: How exactly will this work?

* * *

For Mr. Trump:

On the Economy page of your website, you list as the first item of your vision: Create a dynamic booming economy that will create 25 million new jobs over the next decade by sweeping reforms in tax, trade, energy and regulatory policies.
ATQ: Please apportion the 25 million jobs created to the four areas of reform you list, and Cite The Basis for each.

On your Fact Sheet link, you state: Every income group receives a tax cut under the Trump plan, with million more being removed from the income tax rolls and low-income Americans paying no income tax at all.
ATQ: How much will this grow the deficit? If you pay for these tax cuts, what government programs will you cut to do it, and by how much?

Under Regulation: Every year, over-regulation costs our economy $2 trillion dollars a year and reduces household wealth by almost $15,000 dollars.
ATQ: Please Cite The Basis of these figures, and identify the regulations with the worst impact and how you would reform them.

You have nothing on your website for small business, yet small businesses comprise 39% of GNP, 52% of all U.S. sales, and employ 54 million people (57.3% of private workforce).
ATQ: How would you foster small business growth, and please Cite The Basis to support your ideas?

They keep saying they want to talk about the issues. Let’s see if they do. What’s more, did they Cite The Basis?

Vote on Ask The Question: Taxing $250k+ Earners

Ok, I didn’t plan it this way, but I’m punting on my first ‘Ask The Question’ poll that I want you to vote on. (Your Input at right.) Though I intended for these polls to reflect the publics preferences amongst three options, I added ‘All the above’ as a fourth. I know, defeats the purpose, right?

In this case, I’m going to keep it since I believe the answers to all the questions will yield a much clearer picture of what the benefits and costs are of raising taxes for $250k+ earners vs. not.

Some broad brush strokes. We have two ‘opposite’ problems in our economy: an increasing deficit/debt, and slow growth with high unemployment. They are ‘opposite’, because the solution to one, exacerbates the other. If we cut spending, it will help the deficit, but cause a recession, slowing growth and employment. If we increase targeted spending (jobs bill), the opposite occurs. Similarly, if we lower taxes, it stimulates the economy, but increases the deficit. Doing the opposite, flips the result.

However, these economic controls can be fine tuned, so the question is- is there a policy combination that tackles both problems while maximizing the overall upside and minimizing the downside?

My first ‘Ask the Question’ poll deals with the tax part, leaving spending for later.

As regards the first poll option- the % of $250k earners that are actually ‘job creators’- the few answers I got in the news in over a years time, ranged from less than 1%, to 3%. Whatever the exact figure, it’s pretty low if that’s the range. But why haven’t we nailed this down, and what else is relevant regarding this issue? To hedge my bets, I threw in the second part of the question- how many jobs are we talking about? The best article I read, by Gail Collins, sheds a lot more light on this question, but is still frustratingly imprecise in some areas.

On the second question, lots of figures are being given by the news media, and for varying ‘tax increase thresholds’- from $250k to $1M. The current threshold offer from President Obama is now $400k. All good data and much needed. But some make the case for raising taxes on lower income levels as well. For President Clintons’ opinion, see Part 2 (4:15 minutes in) of [intlink id=”110″ type=”page” anchor=”VoW_FiscCliff_GrndCan”]this previous Video of the Week[/intlink].

Addressing the third, in David Leonhardt’s article “Do Tax Cuts Lead to Economic Growth?”, the answer suggests there is a tenuous link at best, with several Republican advisors weighing in. I hedged my bets on this one too- adding the ‘multiplier effect’* part of the question. If there’s additional ‘bang for the buck’ to be had going into the future with one policy vs. another, don’t we want to know about it?

Vote!

* The multiplier effect occurs when one person’s spending becomes someone else’s income, and some of the second person’s income is subsequently spent, becoming the income of a third person, and so on, leading to economic growth.