THE NATION’S “LIAR-IN-CHIEF” IS AT IT AGAIN

…The GDP percentage changes.

 

Fact Checking has become a way-of-life in dealing with Donald J. Trump.

 

Well, our “Liar-in-Chief” is at it again when he went from always telling us how wonderful his personal efforts were for the US economy, to his latest statement that the “The US is suffering terribly.”  OK, which is it?

 

His bogus presentation about tax reform as usual, had little real details or any real substance as he once again gave us his so called “principles for a tax plan”.

 

The powers-at-be have done their fact checking on what he said about tax reform and also as usual, there is a pile of horse manure in what he had to say.

 

Here’s his 1^st statement to be checked: “In the last 10 years, our economy has grown at only around 2% a year.”

This is highly misleading, because by going back 10 years, Trump’s gang included the nation's worst recession since the Great Depression.  This severely brings down the 10-year average for the US economy. The above chart shows that that the quarterly average since the recession was well above 2%, even hitting 5% in the third quarter of 2014. The GDP growth rate for the United States averaged 3.22% from 1947 to 2017.

(The dark middle line on the graph is zero %, and the gray area is the Great Recession.  This GDP percentage graph is from the Bureau of Economic Analysis)

 

Next bogus statement: “We just announced that we hit 3% in GDP. Just came out. And on a yearly basis, as you know, the last administration, during an eight-year period, never hit 3%.”

 

This time, Trump had the gall to “annualized” a "quarterly" figure of 3% GDP growth for the second quarter of 2017.  He then compares the "quarterly" percentage to the calendar "year end %" figures for former president Barack Obama.  Both cases are false.

 

Then Trump said: “If we achieve sustained 3% growth, that means 12 million new jobs and $10 trillion of new economic activity over the next decade. That’s some numbers.”

This time he downgraded all the his promises he made during the 2016 campaign.  He had said back then that he would achieve 4% GDP growth and 25 million new jobs over 10 years.

 

Next he said: “In 1935, the basic 1040 form that most people file had two simple pages of instruction. Today, that basic form has 100 pages of instructions, and it’s pretty complex stuff.”

 

There are many reasons the instructions were so simple back then.  First, in 1935, only 4% of the population even paid federal individual income tax. In 1935, the individual income tax largely was a tax on the wealthy. In fact, the top rate in 1935 was 63%, and President Franklin D. Roosevelt raised that to 75% later that year.  This all changed after World War II. “Driven by staggering revenue needs, lawmakers in both parties agreed to raise taxes on everyone: rich, poor, and the middle class.”

Next exaggeration: “The tax code is so complicated that more than 90% of Americans need professional help to do their own taxes.”

 

This is also misleading. The 90% figure he is referring to includes all those people using tax software, such as Turbo Tax, which helps people file their taxes on their own. According to the National Taxpayer Advocate’s 2016 Report, 54% of individual taxpayers pay preparers and about 40% of individual taxpayers use tax software that costs about ~ $50.  Trump then made it sound as if the “professional help” is only referring to hired accountants: “That is why tax reform must dramatically simplify the tax code … and allow the vast majority of our citizens to file their taxes on a single, simple page without having to hire an accountant.”  Nice idea, but so far no details from Trump as to how he’s going to make that happen.  So far, it’s all just “Trump Talk”.

 

Next statement was his giving major praise for the Reagan Tax Reform Act of 1986.

 

Once again this is all very strange because Trump has always been a major critic of the Reagan tax bill.  He has blamed it repeatedly for the Savings and Loan debacle, for a decline in real estate investing and for the 1990-1991 recession.  “This tax act was just an absolute catastrophe for the country, for the real estate industry, and I really hope that something can be done,” Trump told this to Congress in 1991. In a television interview he also said: “What caused the savings and loan crisis was the 1986 tax law change. It was a disaster. It took all of the incentives away from investors.”

Sorry Mr. President, but this is all on video tape.

 

In another statement, Trump said: “We have gone from a tax rate that is lower than our economic competitors, to one that is more than 60 percent higher. … In other words, foreign companies have more than a 60 percent tax advantage over American companies.”

The official US tax rate does not tell the whole story. What also matters is the actual tax a company pays, after deductions and tax benefits. That is known as the “effective tax rate”, which can be calculated differently depending on the survey.  According to the Congressional Budget Office (CBO), when it examined the issue, the CBO said the US effective tax rate was 18.6% percent, which it said was among the highest of the biggest economic powers called the Group of 20.  Trump, of course, used the numbers that suggest the difference is really huge.

 

Finally Trump lied with: “Today, we are still taxing our businesses at 35%, and it’s way more than that. And think of it, in some cases, way above 40% when you include state and local taxes in various states. The United States is now behind France, behind Germany, behind Canada, Ireland, Japan, Mexico, South Korea and many other nations. Because of our high tax rate and horrible, outdated, bureaucratic rules, large companies that do business overseas will often park their profits offshore to avoid paying a high United States tax if the money is brought back home. So they leave the money over there. The amount of money we’re talking about is anywhere from $3 trillion to $5 trillion.”

 

There are no official, current numbers on the profits held overseas by US companies, just estimates. The White House would not respond on where Trump is getting these numbers, but his high-end figure appears as usual to be a total exaggeration. The Internal Revenue Service (IRS) in 2012 said the figure was $2.3 trillion, and the Joint Committee on Taxation estimated that it had risen to $2.6 trillion in 2015. There are other estimates as well, but none top $2.8 trillion, this is according to PolitiFact.

 

As previously noted, the effective corporate tax rate in the United States in 2012 was 18.6%, making it the fourth highest among G-20 countries, behind Argentina, Japan and Britain, this is according to the government's CBO.

 

But with Donald J. Trump, “The B.S. just keeps on coming”.

 

Copyright G.Ater  2107