One simple tax cut to grow the economy & shrink the rich/poor Gap

Image result for make america ignorant again


It takes only two things to keep people in chains:
The ignorance of the oppressed
and the treachery of their leaders.


The following should come as no surprise to you who see news from other than Breitbart and FOX:

Why the GOP Tax Bill Is So Unpopular
The Atlantic • November 25, 2017

President Donald Trump says he doesn’t want to cut taxes on the rich. His Treasury Secretary Steven Mnuchin said he doesn’t want to cut taxes on the rich. The Democratic Party says they don’t want to cut taxes on the rich. Americans say they don’t want to cut taxes on the rich.

Right. Billionaire Donald Trump, widely known for caring more about his money than about people, says he does not want to cut his own tax bills. And yes, billionaire Steven Mnuchin says he doesn’t want to increase his own income, either.

Fortunately, most of America (about 2/3) is smart enough to recognize a con when they hear one.

Trump, Mnuchin and the rest of the Republicans, aka “the Party of the Rich,”  always are ready to vote against the 99%, as their hideous “health care reform” attempts demonstrated.

Their tax “reform” bills are true to form. Continuing the Atlantic article:

The House and Senate Republican tax bills cut taxes on the rich—significantly.

Their plans would slash the corporate tax rate by almost half, cut taxes on pass-through income for smaller businesses, eliminate the Alternate Minimum Tax, and erode the estate tax, all of which disproportionately help rich families.

This comes at a time when post-tax corporate profits as a share of GDP have hovered at a record-high level for the last seven years, and the top 1 percent’s share of total income is higher than any time in the second half of the 20th century.

Nearly 50 percent of the benefits of the Senate tax cut would go to the top 5 percent of household earners in the first year of the law, according to the Tax Policy Center.

By 2027, 98 percent of multimillionaires would still get a tax cut, compared to just 27 percent of households making less than $75,000.

Other than Republicans, all party, gender, education, age and racial groups disapprove of the bill.

Despite the unpopularity of both the House and the Senate bills, the GOP is plowing ahead with their pro-rich, anti-middle, anti-poor programs, just as they did with their anti-poor, health care bills.

Here is why, in the words of The Atlantic. 

My donors are basically saying, ‘Get it done or don’t ever call me again,'” Representative Chris Collins, a New York Republican, told The Hill.

The financial contributions will stop” if the GOP fails to deliver corporate tax cuts, Senator Lindsey Graham, a Republican from South Carolina, told NBC News.

The donor class … has concluded that the inaction of this administration and Congress is totally unacceptable,” Josh Holmes, the former chief of staff to Senator Mitch McConnell, told CNN.

(Donors) would be mortified if we didn’t live up to what we’ve committed to on tax reform,” Steven Law, the head of Senate Leadership Fund, a super PAC, told the New York Post.

In summary, the GOP tax plans, like the GOP health care plans constitute a taking from the 99% and giving to the 1% “donor class.”

Rather than give a huge, permanent tax break to all of the rich and a small temporary tax break to some of the poor:

We could eliminate FICA.

According to the Tax Policy Center of the Brookings and Urban Institutions,  the government collects about $1.2 trillion in FICA taxes.

If the FICA tax were completely eliminated, the federal government simply could deficit spend to pay for Social Security (retirement, survivor, and disability) benefits and Medicare benefits.

This directly would benefit you salaried people of America. If you earn $127,200 per year or less, you pay 7.65% of your salary in FICA taxes.

Let’s say your salary is $100,000 That’s $7,650 coming directly out of your paycheck.

But it gets worse. Your company also pays another 7.65%, and when your bosses are deciding what to pay you, they figure that additional $7,650 as part of the cost of employing you.  So, in actual effect, FICA costs you, a $100,000 worker, $15,300 a year. 

That’s not chump change. If you own your home, that may be close to what you pay for your mortgage.

Not only would the elimination of FICA put important dollars in your pocket, but it might help you get the job in the first place. Your company continually decides whether or not to hire, and the cost of hiring is the single biggest factor. FICA adds more than 15% to the cost, which could dissuade them from adding an employee.

FICA also would be an excellent tax cut for businesses, a tax cut which would be used to increase profits, business growth investment, or salaries.

No matter how the dollars are used, eliminating FICA would provide an annual $1 trillion stimulus to economic growth.

This is a big number. Last year, GDP grew a comparatively anemic 2.78%. That translates into $500 billion growth.

The formula for GDP is: GDP = Total Domestic Spending + Net Exports. A mathematical case can be made that the elimination of FICA. Adding $1.2 trillion to the economy, would increase Total Domestic Spending growth an average of 7%-8%.

Particularly, with Net Exports currently taking $500 billion a year out of the economy, economic growth desperately needs increased Domestic Spending, which in turn, requires increased federal deficit spending.


You can read a more detailed description of this recommendation at: Step 1. Eliminate FICA of the Ten Steps to ProsperityImage result for give to the rich

Eliminating FICA would be simple to accomplish, requiring no additional labor (less labor, actually), no new loopholes, and no complications. Just stop collecting it.

The government would continue to pay the bills, as it already does. No change there.

We can grow the economy and shrink the Gap between the rich and the rest, all with one quick, simple tax cut.

With the current talk about tax cuts and tax reform, this is the time to end FICA, the most regressive, least fair tax in America. Even if we make no other changes, this one change will have a profound positive effect on our nation and us.

We don’t need to settle for the GOP’s crazily complicated gift to the rich. We can have a simple, easy tax break for the workers and a boost for the economy.

Our opportunity is now. We have only to demand it.

Rodger Malcolm Mitchell
Monetary Sovereignty
Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell


The most important problems in economics involve the excessive income/wealth/power Gaps between the have-mores and the have-less.

Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics.

Implementation of The Ten Steps To Prosperity can narrow the Gaps:

Ten Steps To Prosperity:
1. ELIMINATE FICA (Ten Reasons to Eliminate FICA )
Although the article lists 10 reasons to eliminate FICA, there are two fundamental reasons:
*FICA is the most regressive tax in American history, widening the Gap by punishing the low and middle-income groups, while leaving the rich untouched, and
*The federal government, being Monetarily Sovereign, neither needs nor uses FICA to support Social Security and Medicare.
This article addresses the questions:
*Does the economy benefit when the rich can afford better health care than can the rest of Americans?
*Aside from improved health care, what are the other economic effects of “Medicare for everyone?”
*How much would it cost taxpayers?
*Who opposes it?”
3. PROVIDE A MONTHLY ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA (similar to Social Security for All) (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB (Economic Bonus)) Or institute a reverse income tax.
This article is the fifth in a series about direct financial assistance to Americans:

Why Modern Monetary Theory’s Employer of Last Resort is a bad idea. Sunday, Jan 1 2012
MMT’s Job Guarantee (JG) — “Another crazy, rightwing, Austrian nutjob?” Thursday, Jan 12 2012
Why Modern Monetary Theory’s Jobs Guarantee is like the EU’s euro: A beloved solution to the wrong problem. Tuesday, May 29 2012
“You can’t fire me. I’m on JG” Saturday, Jun 2 2012

Economic growth should include the “bottom” 99.9%, not just the .1%, the only question being, how best to accomplish that. Modern Monetary Theory (MMT) favors giving everyone a job. Monetary Sovereignty (MS) favors giving everyone money. The five articles describe the pros and cons of each approach.
4. FREE EDUCATION (INCLUDING POST-GRAD) FOR EVERYONE Five reasons why we should eliminate school loans
Monetarily non-sovereign State and local governments, despite their limited finances, support grades K-12. That level of education may have been sufficient for a largely agrarian economy, but not for our currently more technical economy that demands greater numbers of highly educated workers.
Because state and local funding is so limited, grades K-12 receive short shrift, especially those schools whose populations come from the lowest economic groups. And college is too costly for most families.
An educated populace benefits a nation, and benefitting the nation is the purpose of the federal government, which has the unlimited ability to pay for K-16 and beyond.
Even were schooling to be completely free, many young people cannot attend, because they and their families cannot afford to support non-workers. In a foundering boat, everyone needs to bail, and no one can take time off for study.
If a young person’s “job” is to learn and be productive, he/she should be paid to do that job, especially since that job is one of America’s most important.
Businesses are dollar-transferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the federal government (the later having no use for those dollars). Any tax on businesses reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all business taxes reduce your personal income.
7. INCREASE THE STANDARD INCOME TAX DEDUCTION, ANNUALLY. (Refer to this.) Federal taxes punish taxpayers and harm the economy. The federal government has no need for those punishing and harmful tax dollars. There are several ways to reduce taxes, and we should evaluate and choose the most progressive approaches.
Cutting FICA and business taxes would be a good early step, as both dramatically affect the 99%. Annual increases in the standard income tax deduction, and a reverse income tax also would provide benefits from the bottom up. Both would narrow the Gap.
There was a time when I argued against increasing anyone’s federal taxes. After all, the federal government has no need for tax dollars, and all taxes reduce Gross Domestic Product, thereby negatively affecting the entire economy, including the 99.9%.
But I have come to realize that narrowing the Gap requires trimming the top. It simply would not be possible to provide the 99.9% with enough benefits to narrow the Gap in any meaningful way. Bill Gates reportedly owns $70 billion. To get to that level, he must have been earning $10 billion a year. Pick any acceptable Gap (1000 to 1?), and the lowest paid American would have to receive $10 million a year. Unreasonable.
9. FEDERAL OWNERSHIP OF ALL BANKS (Click The end of private banking and How should America decide “who-gets-money”?)
Banks have created all the dollars that exist. Even dollars created at the direction of the federal government, actually come into being when banks increase the numbers in checking accounts. This gives the banks enormous financial power, and as we all know, power corrupts — especially when multiplied by a profit motive.
Although the federal government also is powerful and corrupted, it does not suffer from a profit motive, the world’s most corrupting influence.
10. INCREASE FEDERAL SPENDING ON THE MYRIAD INITIATIVES THAT BENEFIT AMERICA’S 99.9% (Federal agencies)Browse the agencies. See how many agencies benefit the lower- and middle-income/wealth/ power groups, by adding dollars to the economy and/or by actions more beneficial to the 99.9% than to the .1%.
Save this reference as your primer to current economics. Sadly, much of the material is not being taught in American schools, which is all the more reason for you to use it.

The Ten Steps will grow the economy, and narrow the income/wealth/power Gap between the rich and you.


Trade War! Oh, woe is US ?

Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell

It takes only two things to keep people in chains: The ignorance of the oppressed and the treachery of their leaders..

I just received an Email from FT Exclusive. Here is the entire text:

White House civil war breaks out over trade

A civil war has broken out within the White House over trade, leading to what one official called “a fiery meeting” in the Oval Office pitting economic nationalists close to Donald Trump against pro-trade moderates from Wall Street.

According to more than a half-dozen people inside the White House or dealing with it, the bitter fight has set a hardline group including senior adviser Steve Bannon and Trump trade adviser Peter Navarro against a faction led by Gary Cohn, the former Goldman Sachs executive who leads Mr Trump’s National Economic Council.

At the centre of the debate is Mr Navarro, a firebrand economist who has angered Berlin and other European allies by accusing Germany of exploiting a “grossly undervalued” euro and calling for bilateral discussions with Angela Merkel’s government over ways to reduce the US trade deficit with Europe’s most powerful economy.

The officials and people dealing with the White House said Mr Navarro appeared to be losing influence in recent weeks. But during the recent Oval Office fight, Mr Trump appeared to side with the economic nationalists, one official said.

When evaluating the above, the key thing to remember is the U.S. government is Monetarily Sovereign. It creates unlimited dollars at will.

Bannon et al want the other nations to make our imports more expensive and our exports less expensive, so we can export more and import less. That leaves us with two questions:

  1. Should we want our Net Imports to be more expensive?
  2. Should we want to increase Net Exports?

Question #1 seems like a no-brainer.  Do you really want all the things you import to cost you more? Do you really want inflation?

No? Well, that’s the way to reduce imports, which is what Bannon and Trump want. (Though not even Trump knows what Trump wants, today. Tomorrow’s 4:00AM tweet could change everything.)

Which gets us to the meat of the argument, question #2. Should we want to increase Net Exports?

That is a no-brainer too, but not in the way you may think.

The fundamental effect of increased Net Exports is to increase the money supply, which on the surface would seem to be a good thing.

But remember, the U.S. government is Monetarily Sovereign. It has the unlimited ability to increase our money supply.

Congress controls the money supply by spending, which it has the unlimited ability to do. So, there is no money-supply need to increase or to decrease imports or exports.

Some may argue that increasing Net Exports by weakening the dollar helps American businesses that exportbut it hurts American businesses that import, as well as hurting consumers who will need to pay more dollars for imports.

And if our government really wants to help American business, it simply would reduce or even eliminate business taxes. Then there would be no need for silly trade conflicts like the Bannon, Cohn, Navarro, Trump ado about nothing.

Ah, but if the government reduced or eliminated business taxes, the populace first would complain about business not paying its “fair share,” as though business expenses somehow benefit the populace.

And then after the “fair share” argument ran its course, the populace might come to see that the federal government neither needs nor uses the tax dollars anyway.

Imagine the kerfuffle when government flunkies try to explain why our Monetarily Sovereign government does not need tax dollars, but has been collecting them all these years.

Here is the teapot on this tempest:

  1. A Monetarily Sovereign nation does not need to export. It can control its money supply, and can support its industries, endlessly.
  2. Importing benefits the nation. When we import we exchange dollars, which cost essentially zero to create, for goods and services which cost time, materials, and labor to create.

In effect, when a Monetarily Sovereign nation imports it gives nothing and gets something.

For instance, when we import from China, we give them dollars we create at the touch of a computer key, and they give us products and services that cost them the blood, sweat, and tears of their workforce along with their precious raw materials.

So who comes out the winner? Clearly, the importer. That so-called “grossly undervalued euro” benefits America.

Those are the simple facts of import/export for a Monetarily Sovereign nation.

Now, sit back and watch the fighting dispassionately, and shake your head in wonder at the treachery of our leaders and the ignorance of the populace.

Rodger Malcolm Mitchell
Monetary Sovereignty



•Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.

•Any monetarily NON-sovereign government — be it city, county, state or nation — that runs an ongoing trade deficit, eventually will run out of money.

•The more federal budgets are cut and taxes increased, the weaker an economy becomes..

•No nation can tax itself into prosperity, nor grow without money growth.

•Cutting federal deficits to grow the economy is like applying leeches to cure anemia.

•A growing economy requires a growing supply of money (GDP = Federal Spending + Non-federal Spending + Net Exports)

•Deficit spending grows the supply of money

•The limit to federal deficit spending is an inflation that cannot be cured with interest rate control. The limit to non-federal deficit spending is the ability to borrow.

•Until the 99% understand the need for federal deficits, the upper 1% will rule.

•Progressives think the purpose of government is to protect the poor and powerless from the rich and powerful. Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.

•The single most important problem in economics is the Gap between the rich and the rest.

•Austerity is the government’s method for widening the Gap between the rich and the rest.

•Until the 99% understand the need for federal deficits, the upper 1% will rule.

•Everything in economics devolves to motive, and the motive is the Gap between the rich and the rest..