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Sen. Sherrod Brown’s economic illiteracy is frightening at the same time it isn’t surprising. Sen. Brown’s spirited exchange with Sen. Orrin Hatch revealed how little Sen. Brown understands about capitalism. What was particularly illuminating was when Sen. Brown said “I just think it would be nice, just tonight, to just acknowledge, well, this tax cut isn’t really for the middle class. It’s for the rich, and that whole thing about higher wages, well, it’s a good selling point, but we know companies don’t just give away higher wages. They just don’t give away higher wages just ’cause they have more money.”

Sen. Brown is either economically illiterate or he’s dishonest. Either way, it frightens me that he’s on the Finance Committee. It’s disturbing that he doesn’t understand what creates great economies. Brown has voted for some of the most counterproductive economic policies in recent history. Those policies have led to slow economic growth and stagnant wages. During the Obama administration, companies left the United States because of high tax rates and unreasonable regulatory burdens.

This isn’t opinion. Since Trump took office, consumer confidence has surged, unemployment has dropped, companies have started investing again and the workforce participation rate has improved. That’s because Trump has eased the regulatory burdens and promised competitive corporate tax rates.

At no time during the Obama administration did the economy grow at 3% per year for a full year. Right now, we’re on target to exceed 3% economic growth in Trump’s first year in office. If I’m forced to trust Trump’s policies or Obama’s policies, it isn’t much of a fight. This was fun to watch but it wasn’t much of a fight:

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It isn’t a stretch to say that the DFL hates cutting taxes. Further, it isn’t a stretch to think that the DFL doesn’t understand economics. When Democrats, whether they’re in the US Senate or the Minnesota legislature, complain about tax cuts for “the rich”, I’m reminded of Ronald Reagan’s cliché that you can’t create jobs if you hurt employers. There’s indisputable proof that companies are leaving the US for low-tax countries. Not all companies leave but there’s no doubt that many companies do.

Yesterday, the Minnesota Supreme Court ruled that Gov. Dayton’s veto of the legislature’s operating budget was constitutional. At the heart of that fight is Gov. Dayton’s hatred of tax relief. If Gov. Dayton understood the power of pro-growth tax policies, he wouldn’t have objected to the Republicans’ tax relief bill.

Further, after watching every DFL legislator vote against the tax relief package last spring, it isn’t a dishonest statement to say that the DFL hate pro-growth tax policies. At what point will the DFL admit that pro-growth tax policies work? Will they ever admit that?

It isn’t just DFL legislators that hate pro-growth tax policies. By now, most LFR readers have seen this fight between ‘Uncle Orrin’ Hatch, (R-UT), and Sherrod Brown, (D-OH), during Thursday night’s mark-up of the Senate Tax Cuts and Job Act:

Way to go, Uncle Orrin! That’s what I’d call a beat-down! Beyond seeing Republicans fighting Democrats over the benefits of this pro-growth tax policy, that exchange is instructive because Sen. Brown said something totally stupid. Specifically, Sen. Brown said “And I get sick and tired of the rich always getting richer.” Let me state this clearly. I can’t imagine a politician saying something more foolish than that. Why wouldn’t you want the rich to keep getting richer? If they aren’t getting richer, that means that they aren’t making a profit. People that aren’t making a profit can’t continue employing people.

I don’t know who Republicans will run against Sen. Brown but whoever they run should run that clip morning, noon and night against Sen. Brown. I’d finish the ad by asking ‘Was Sherrod Brown just gratuitously grandstanding? Or is he that economically ignorant?’

Seriously, how can a U.S. senator be that stupid? That’s painful to watch.

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It’s now official. Blue Dog Democrats officially stated that they oppose middle class tax cuts and tax simplification. They officially stated “We simply cannot support a bill that, by every kind of measurement, has been determined to add over $2 trillion to the deficit at the expense of middle-class Americans. It’s a fact that some middle-class Americans will see their taxes go up and small business owners will face a more complex tax system under this bill.”

Their statement went further, saying “Unrealistic, rosy economic growth projections should not be used to offset the costs of tax reform or tax relief.”

During the Obama administration, Blue Dog Democrats sat silent. They didn’t offer plans to simplify the tax code or provide middle class tax relief. They especially didn’t criticize President Obama’s super-sized deficits. Simply put, they acted like spineless eunuchs. Now that there’s a Republican president that’s pushing major improvements to the tax code, though, Blue Dogs are suddenly criticizing plans that will strengthen the economy, create jobs and grow families’ 401(k)s.

Their position paper supports corporate tax reduction, income tax simplification, and emphasizes deficit reduction.

That’s nice-sounding but it’s totally BS. They were nowhere to be found for 8 long yeas on the topic of deficit reduction. Had they stood up to President Obama and Nancy Pelosi back then, they’d have some credibility.

Legitimate conservatives have a different idea:

Thanks to Republicans, tax relief will soon become reality. During her interview with Kevin Brady, Harris Faulkner asked him if they’d done a whip count. Chairman Brady said that they’d done a whip count and that they had the 218 votes needed to pass the House Bill:

The Senate bill includes the repeal of the individual mandate, which isn’t part of the House’s legislation. Last night during his townhall, however, Speaker Ryan said that House Republicans didn’t have a problem with repealing the individual mandate. Chairman Brady said that they wouldn’t add it to the House bill but said that they wouldn’t have a problem agreeing to it in the conference committee negotiations.

UPDATE: Ron Johnson just announced that he won’t vote for the Tax Bill in its current form:

“We have an opportunity to enact paradigm-shifting tax reform that makes American businesses globally competitive, helps our economy reach its full potential, and creates greater opportunity and bigger paychecks for every American. In doing so, it is important to maintain the domestic competitive position and balance between large publicly traded C corporations and ‘pass-through entities’ (subchapter S corporations, partnerships and sole proprietorships). These businesses truly are the engines of innovation and job creation throughout our economy, and they should not be left behind. Unfortunately, neither the House nor Senate bill provide fair treatment, so I do not support either in their current versions. I do, however, look forward to working with my colleagues to address the disparity so I can support the final version.”

The key part of Sen. Johnson’s statement is where he said “I do not support either in their current versions. I do, however, look forward to working with my colleagues to address the disparity so I can support the final version.” That isn’t slamming the door shut. It’s leaving the door wide open. Frankly, this sounds more like the opening of negotiations rather than a rejection.

Tuesday night, Speaker Ryan was Bret Baier’s and Martha MacCallum’s guest for a townhall meeting in Herndon, Virginia. Specifically, the subject was the Tax Cut and Jobs Act. It would be fun watching him slice-and-dice Nancy Pelosi on the subject, though I’m certain she’d never participate in such a debate.

Ryan on how the tax cuts would help veterans:

Ryan on small business growth:

(Notice the specificity of his response.)
Ryan on the need to grow the economy:

Thus far, the Democrats’ economic plan is to criticize the Republican plan. That’s the plan offered by Pelosi and Schumer. That’s bad enough. The Bernie/Warren plan is even worse. They want to raise taxes and drive companies overseas.

Do we want a vibrant economy led by robust small business investment or do we want the pathetic economic growth we had during the Obama administration? That’s a pretty easy answer for most people.

This week, Democrats are crowing about their victories in New Jersey and Virginia. That’s fair enough. They turned out the vote in Virginia bigtime. Meanwhile, Republicans are left wondering how they’ll fare in the 2018 midterms. If I was advising House Republicans, I’d tell them to start early with a steady diet of granting TV and radio interviews to local shows with the major focus being on the strong economy and the other focus being on what the House has passed to help the economy grow.

Part of that growth message would focus on the robust energy industry growth. Another part of that message would highlight the candidate’s willingness to vote for building pipelines and other vital infrastructure. Whenever possible, highlight the times when you’ve worked with President Trump on these issues.

The thing that brings all Republicans together is economic growth. Voting for the tax reform legislation is still a positive, especially in the Midwest. Republicans shouldn’t be shy in highlighting the Democrats’ opposition to everything on Trump’s agenda, either. It’s one thing to be the loyal opposition. It’s another to simply oppose everything. The other thing Republicans shouldn’t hesitate in doing is calling out Bernie’s candidates. Republicans shouldn’t hesitate in exposing the Democrats’ beliefs.

Right now, Democrats are opposing the GOP tax plan because, in their words, it explodes the deficit. At the same time, Democrats are extolling the virtues of Bernie’s single-payer health care plan. The estimated cost of single-payer in California is $400,000,000,000 per year. The national tax cuts that Democrats oppose on the basis that it explodes the deficit adds less than $150,000,000,000 to the deficit per year. Force Bernie’s brigades to explain why they support something that expensive but reject something that puts money in middle class families’ pockets.

This isn’t a time for GOP timidity. It’s a time for them to go on offense. The Democrats don’t have an agenda except opposition to everything. Republicans have a record of accomplishments that have helped the economy grow. Not going on offense in this situation is sinful.

If Democrats ask for a Republican’s opinion on President Trump’s latest Twitter storm, that Republican should reflexively reply ‘I’m here to talk about how to improve families’ lives, not provide commentary on the latest from Page 6.’ The point is that this is about positive change that people are noticing. Unemployment is dropping. The economy is growing. People’s 401(k)s are growing rapidly. By Election Day, 2018, millions of jobs will have been created. Taxes will have been cut. Anti-mining regulations have been repealed.

Finally, does anyone think that this would be happening if Democrats held the gavels in the House or Senate? The Democrats’ Resistance Movement would certainly have led to a government shutdown, financial instability and tepid economic growth.

Bernie Sanders’ economic policies don’t lead to prosperity. They lead to income inequality, increased government dependency and stagnant wages. We know this because we just lived through 8 years of it.

Republicans need to do a compare-and-contrast with Democrats on economic growth, job creation and consumer confidence. Then Republicans should ask whether people think whether Democrats are capable of delivering economic growth, robust job creation and soaring consumer confidence.
Twenty-five minutes into this video, Kim Strassel nails it:;

People want to know that their policymakers are putting policies in place that quickly help them. Republicans haven’t gotten big ticket items passed but they’ve implemented important pro-growth economic policies. If you ask families whether it’s more important to get high-profile legislation enacted or whether it’s more important to get the economy running, I’m fairly certain that they’ll pick the strong economy.

If any paragraph written establishes as fact that tax simplification is needed, it’s found in this article. Specifically, the paragraph that says “To finance a 15 percent cut in the corporate tax rate, House Republicans have already signed on to revenue-generating measures that would weaken the real-estate market, hurt orphans, disadvantage the disabled, hobble research on cures for rare diseases, make it harder for veterans to find jobs, soak upper-middle-class voters in blue states — and, thereby, put their caucus’s most vulnerable members at grave political risk.”

Predictably, every DC lobbyist is whining about their special carve-outs getting eliminated. The lobbyists’ goal is to portray each deduction as essential to the health of that specific industry. In 1986, most of the tax code’s deductions were stripped away. Not only didn’t the economy falter, the economy kept chugging along.

Think of this hysteria as a Chicken Little defense.

This is a bit deceptive:

According to the JCT, if the Republican plan passes, one-fifth of American households will pay higher taxes in 2027. While more middle-class families would be helped than hurt by the GOP plan, the fact that any will wind up forking over more money to Uncle Sam, while the super rich and corporate America collect trillions in benefits, is a political migraine for Trump & Co.

If the bill is passed using reconciliation, the tax cuts expire in 2026. The chances of those tax cuts being allowed to expire isn’t nothing but the chances aren’t exactly high, either.

There is one way around this impasse. Republicans could make the House plan better for the middle class, and easier on the deficit, at the same time, if they’d only scale back their $2 trillion giveaway to corporate America.

Thanks to the Obama tax increase, there’s now over $4,000,000,000,000 in profits sitting overseas rather than being invested here in the United States. Fairness sounds nice but it’s the best way to quiet the US economy. The Obama administration was famous for economic silence. We don’t want a replay of those years. The quack that wrote the base article is hysterical, not credible. The expert in this video is credible:

Something jumped out at me while reading this article. Specifically, I’m upset with Melissa Hortman after she said “I think that Senator Gazelka should work with Democrats like Governor Dayton and me and Senator Bakk to solve a problem rather than using people as pawns in a political dispute.” Actually, Gov. Dayton is the problem. If he hadn’t negotiated in bad faith, this wouldn’t have happened. In fact, he negotiated in bad faith twice, once when he said he’d sign the Republicans’ tax relief plan 2 years ago. He negotiated in bad faith this year when he signed the tax relief bill, then line-item vetoed the funding for the legislature.

Gov. Dayton’s holding the people of Minnesota hostage because he wants to renegotiate legislation he’s already signed. Giving a governor that type of authority is unforgiveable. With that authority, governors could hold the legislature hostage every budget session. Is the Supreme Court willing to give the executive branch that authority over the legislative branch? If they’re willing to do that, then the Supreme Court is corrupt. They’re willing to give one branch of government the upper hand in budget negotiations. It isn’t difficult to envision a governor holding the legislature hostage if the legislature doesn’t give him what he wants.

Here’s what I’d tell Rep. Hortman. Rather than defending people in the DFL, she should defend the people of Minnesota. Thus far, she’s defended the DFL. She hasn’t defended Minnesotans.

By vetoing the legislature’s funding, then filing the appeal after losing the first court case, Gov. Dayton has endangered the funding for the Office of Legislative Auditor, aka OLA, and the Revisor’s Office. I wrote in this post that those offices aren’t inconsequential offices:

The office of the Legislative Auditor is funded through the LCC. Legislative Auditor Jim Nobles has already expressed concerns about certain functions of his office being suspended – specifically the certification of state financial reports that support the state’s credit rating and the receipt of federal funds.

The Office of the Revisor of Statutes is also funded through the LCC and they work year-round with state agencies on rule making authority. The Revisor’s office would also be necessary to draft a bill to restore legislative functions once session begins in February.

Thanks to Gov. Dayton’s line-item veto, the office that certifies Minnesota’s financial reports that keep our credit rating healthy is getting its funding stripped. The Revisor of Statutes Office is essential to Minnesota’s rule-making and legislation writing processes. What is Gov. Dayton thinking when he’s stripping funding from these essential offices? Was Gov. Dayton thinking when he forced the stripping of these funds?

Anyone that’s willing to shortchange these offices just so he can renegotiate a bill that he’s already signed is disgusting. Gov. Dayton isn’t a man of integrity. He’s a man who thinks that the ends justify the means. How pathetic.

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If there’s a message coming from Newt Gingrich’s op-ed, it’s that Republicans must put together a compelling message to pass the Tax Cuts and Jobs Act. Gingrich reminds Republicans that “passing serious legislation is very hard work. There is still a great deal to do, and the timeline is incredibly tight”, adding that “The Joint Committee on Taxation has already provided preliminary analysis for the bill. Its estimates are static and assume tax cuts will have no impact on growth. As a result of this bad assumption, the JCT incorrectly estimates the bill would create a significant budget shortfall, $1.43 trillion over 10 years.”

Gingrich continued, saying “The truth is, our gross domestic product is growing at 3 percent, largely due to deregulatory efforts by the Trump administration and the expectation of tax cuts. Passage of the Tax Cuts and Jobs Act would further spur GDP growth, so the bill should be scored dynamically. The Tax Foundation has made dynamic estimates on the Tax Cuts and Jobs Act, which show the bill would ‘significantly lower marginal tax rates and the cost of capital, which would lead to 3.9 percent higher GDP over the long term, 3.1 percent higher wages, and an additional 975,000 full-time equivalent jobs.’ This economic growth would raise federal revenues by nearly $1 trillion over 10 years, according to the Tax Foundation. In the end, this new revenue could bring the bill close to neutral, depending on what baseline is used to score it.”

Let’s get serious about something. The Tax Cuts and Jobs Act will speed up the economy. That’s indisputable even though Nancy Pelosi insisted in this speech that it would kill jobs. Ms. Pelosi has told lots of whoppers in the past. This is another whopper. Republicans seem interested in self-destruction.

Sen. Lankford has announced his opposition to it because it supposedly increases the deficit. Here’s a simple question for Sen. Lankford. If Republicans fail to pass this bill, what’s the likelihood they’ll have to vote on a Democrat budget that would hurt job creation and economic growth? What’s the likelihood that a Democrat budget would increase the deficit more than this bill would?

The Tax Cuts and Jobs Act isn’t perfect but it’s definitely a step in the right direction. There’s economic growth happening right now. This isn’t just the right time to pass tax cuts. It’s the best time to pass the Tax Cuts and Jobs Act.

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If I had to give this article a title, I’d give the title ‘You can’t beat something with nothing’. Another title I’d consider is ‘Republicans win while Democrats whine’. Katie Packer Beeson’s article is spot on.

It starts by saying “The Democrats seem to enjoy gloating about the hot mess that is the Republican Party these days. Former GOP presidents warning the president about the people he surrounds himself with; sitting Republican U.S. senators calling the president unstable and unqualified; and a former GOP speaker of the house saying “there is no Republican Party. The president isn’t a Republican.” And Democrats’ friends in the mainstream media have kindly created an echo chamber that makes them think that they are always right and the Republicans are a bunch of sexist, racist, whack jobs. So why aren’t they winning?”

It continued, saying “So when they lost the election, there was a reckoning. The leadership of the Democratic Party was drummed up and new, forward-looking leaders took the reins and offered an alternative to what they saw as the disaster of Donald Trump. Wait, no. That isn’t what happened. Instead, they re-elected Nancy Pelosi as speaker of the house. They elected Chuck Schumer as Senate majority [editor’s note: Schumer is minority leader] leader and completely sold out to the New York and California wings of the Democratic Party.”

Then there’s this:

Instead of talking about middle-class tax cuts, they talked about transgender bathroom access. Instead of talking about fixing Obamacare, which was crushing many in the middle class with high premiums and complicated doctor selections, they walked right into the trap of the alt-right and began tearing down Civil War statues.

Democrats still haven’t figured out how to talk to blue collar America. They’re experts at talking to college professors and progressive activists but they’re worthless at talking with factory workers, small businesses and tradesmen. It’s like those people are from another planet. (Perhaps, it’s the Democrats that are from a different planet?)

Look how paralyzed Hillary looks when confronted by a coal miner:

Hillary looked positively petrified. She looked like she would’ve rather been anywhere else in the world than at that roundtable.

What [Democrats] don’t seem to understand is that you can point out your opponent’s weaknesses all day long, but if you don’t provide an alternative, then people will stick with the status quo. I’ve spoken to dozens of Republican women in recent months who have grown disillusioned with the Republican Party, and when I ask why they don’t defect, the answer is always the same: “It’s no better over there.”

Until Democrats learn what animates blue collar workers, they should expect to lose lots of races, at least enough to keep them in the minority for a decade or more.

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This USA Today Our View editorial is biased and unworthy of serious consideration. That said, it’s instructive of what Republicans will have to fight.

For instance, the editorial says “The measure’s cut in the corporate income tax rate from 35% to 20%, for example, could boost the economy. And its limit on the interest deduction for new mortgages has angered the powerful homebuilding and Realtor lobbies, which suggests that its drafters might be doing something right. But by the standards of President Reagan’s landmark 1986 tax reform, this plan is a major disappointment. It lacks fiscal discipline, is needlessly indulgent of the wealthy, and is purposely punitive to universities, college students and people who live in high-tax states. Taken as a whole, this plan is partisan, even petty.”

Let’s examine that. It isn’t that cutting “the corporate income tax rate from 35% to 20%” might boost the economy. Cutting that tax rate will boost the economy. The DJIA is chomping at the bit waiting for that tax rate cut. If it becomes reality, expect companies to invest that extra capital into hiring extra R & D personnel. Expect small businesses to buy new equipment, which, in turn, will strengthen the manufacturing sector and durable goods orders.

With consumer confidence shooting through the roof, it likely wouldn’t take much to get the economy roaring. It’s disappointing, though predictable, for the editorial to say that the tax plan “is needlessly indulgent of the wealthy.” President Reagan was fond of saying that it’s impossible to be pro-jobs and anti-employer. The first Reagan tax cuts were on capital gains with the intent on getting Detroit back on its feet. It worked magnificently. Then there’s this:

Preliminary estimates are that it would increase deficits by $1.5 trillion over 10 years. To put that in perspective, an only slightly different cast of GOP lawmakers screamed bloody murder in 2009 over an Obama economic stimulus plan half that size. Republicans were deficit hawks then. Now, not so much.

I wrote about the stimulus back in the day. It just threw money at people. Republicans predicted that it wouldn’t spur the economy. The Republicans’ predictions were right. Further, Republicans argued that the Obama stimulus was nothing but pork. They were right. It’s foolish to argue that the Republicans’ Tax Cuts and Jobs Act is nothing but pork and special favors. Predictably, though, that’s what the Democrats are doing.

Finally, saying that “an only slightly different cast of GOP lawmakers screamed bloody murder in 2009 over an Obama economic stimulus” is mathematically insulting. There were 178 Republicans in the House in 2009. There are 239 Republicans in the House as of Oct. 21. That’s a difference of 61 Republicans in the House. I wouldn’t call that a “slightly different cast of GOP lawmakers.”

Then there’s this BS:

The biggest flaw in the GOP plan is that, for all the rhetoric about helping the middle class, it is tilted toward the wealthy. Benefits for the rich include:

Termination of the tax on inherited wealth, a priority of wealthy GOP donors but not many other Americans. Immediately upon passage, estates of up to $22 million could be passed on to heirs tax-free. After six years, estates of any size could be passed on tax-free. Over a decade, this change alone would drain $172 billion from the Treasury.

The wealth that’s been accumulated in these estates has been taxed already. It’s been taxed at a high rate, too. There’s nothing moral about the government taxing estates twice.

Further, this doesn’t benefit the wealthy. People like the Gates family, the Clinton family or the Dayton family create foundations to shelter their wealth. Family farmers would benefit from this. Small business owners would benefit, too.