Trump Guilty x 34

Trump Guilty x 34

Reuters
By Yuval Rosenberg and Michael Rainey
Thursday, May 30, 2024

History was made today as Donald Trump was found guilty of all 34 felony counts in his election interference trial in New York.

The former president and presumptive 2024 Republican presidential nominee was convicted of trying to cover up a $130,000 deal to keep adult film star Stormy Daniels from publicizing her account of a past sexual encounter with him as he was running for the White House in 2016.

After the verdict, Trump, as he has done throughout, again called the trial a “disgrace” and baselessly claimed it was rigged. The truth is clear, though: Trump now is the first former president to be convicted of a crime. He faces up to four years in prison, though he could be sentenced to probation and is reportedly likely to avoid prison time — and he is expected to appeal. He can continue to run for a second presidential term, and his conviction does not prevent him from serving as president, though it may alter how some voters see him.

Here's what else is happening.

House Republicans Preparing Tax Cut Plans for Early 2025

House Republicans are reportedly already constructing plans to extend the 2017 tax cuts via a budget reconciliation bill in the first 100 days of a potential second Trump administration.

The budget reconciliation process established in 1974 allows lawmakers to pass major tax and spending packages along partisan lines. The reconciliation process is limited to legislation that changes spending, taxes or the debt limit, but it requires only a simple majority and thus enables a party that controls both chambers of Congress and the White House to bypass the threat of a Senate filibuster. Democrats have used the process in recent years to pass the 2021 American Rescue Plan Act and the 2022 Inflation Reduction Act. Republicans used it to pass their 2017 tax overhaul and tried unsuccessfully to use it to repeal the Affordable Care Act.

Now, Republicans are gearing up to use reconciliation to quickly renew expiring provisions of the tax cut law enacted seven years ago.

“Republican tax writers have already broken into working groups on specific tax topics in advance of the 2025 tax cut expirations, priming the House Ways and Means Committee to get straight to work if the GOP sweeps Congress and the White House,” The Hill reported yesterday.

In a Wednesday interview with Punchbowl News, House Speaker Mike Johnson said he wants to think broadly about what might be included in a reconciliation package, potentially including border security and energy policy in the mix. “[W]e’re just looking at it from a very different, much more comprehensive approach,” Johnson told Punchbowl. “And I think there’s a lot of interest among House Republicans — and the outside groups of course — about what that can look like and what the potential is.”

Johnson also sounded a note of caution about the stopgap government funding bill expected this fall, which some Republicans want to stretch until early 2025, when Trump might be in office again and could exert some sway over spending priorities.

“The cautionary analysis on that,” Johnson said, “is that we’re going to have such an aggressive first 100 days agenda if we get unified government, which we anticipate will have, that it might encumber that agenda somewhat if you then have to deal with the appropriations process.”

The bottom line: Republicans are already dreaming big about what they can do next year.

Op-Ed of the Day: The Great Tax Debate Ahead

The stakes in the 2024 elections are huge and include massive policy implications, with the fate of the 2017 Republican tax cuts among the issues depending on which party controls Congress and the White House.

In an opinion piece at The New York Times, political science professors Jacob Hacker and Paul Pierson seek to frame the choice facing voters, which they describe as “the biggest, most consequential debate over future policy priorities since the Great Recession”:

“Should the enormous, ineffective and inequality-abetting tax cuts that Donald Trump signed into law in 2017 be extended past their scheduled expiration in 2025? And should the permanent corporate tax cuts in that bill be kept in place even as it has become clear how little these business goodies have done for the economy?
“This is a choice between two fundamentally different visions for our country. If the Trump tax cuts are extended — which Steve Scalise, the Republican House majority leader, recently said he would seek to do in the first one hundred days of a second Trump term — and the corporate tax reductions left undisturbed, our elected leaders will have locked in place priorities that a large majority of Americans say they oppose. Worse, the Trump tax package will exacerbate a fiscal crisis for programs like Social Security and Medicare that are highly popular, including among Republicans.”

Hacker and Pierson, who work at Yale and UC Berkely, respectively, and have co-authored several books together, write that the 2017 tax cuts were unpopular, skewed toward the rich, and did little to boost pay or jobs. And they argue that tax cuts are the primary driver of federal budget shortfalls.

“Advocates of the tax cuts say the United States has a spending problem, not a revenue problem. But that has it backward. Yes, the United States needs to make critical investments in the future, and yes, an aging population will put pressure on popular programs like Social Security, Medicare and Medicaid. But right now, it is low revenues that are primarily responsible for persistent deficits. Indeed, we could finance those investments and programs relatively easily if we could get revenues back up to where they were before the Bush-Trump Republican tax-cutting spree.”

The authors say that extending the Trump tax cuts would run counter to the public’s priorities.

“If the tax cuts are made permanent, there will be no way to sustain, much less improve, the programs that Americans say they want and need. In poll after poll, Americans put Social Security, Medicare, Medicaid and even the distinctly unsexy goal of deficit reduction ahead of tax cuts. If tax cuts win, it will represent a clear failure to respond to the concerns of the American people. … Republican backers of extending the 2017 law should have to justify and negotiate every aspect of the tax bill they rammed through in 2017, including the permanent corporate tax cuts they passed to appease business lobbies and donors.”

Read the full piece at The New York Times to find out how the authors think Democrats should frame the upcoming tax debate.

Number of the Day: 1.3%

The U.S. economy grew a bit more slowly in the first three months of 2024 than initially estimated, according to government data released Thursday. The Commerce Department revised the growth rate for gross domestic product in the first quarter to 1.3%, down from 1.6% in the initial estimate. The revised estimate reflects the weakest growth since the second quarter of 2022.

“Compared to the fourth quarter, the deceleration in real GDP in the first quarter primarily reflected decelerations in consumer spending, exports, and state and local government spending and a downturn in federal government spending,” the department said. “These movements were partly offset by an acceleration in residential fixed investment. Imports accelerated.”

Economist Tuan Nguyen of the consulting firm RSM said the softer data should come as a relief to policymakers at the Federal Reserve, some of whom have worried about excess pressure in the economy. “Given the recent economic data, we believe the economy is getting close to a soft landing when growth approaches its long-term trend,” he wrote.

IRS Making Free Tax Filing Program Permanent

The Treasury Department announced Thursday that Direct File, the free tax filing system being tested by the IRS, will be made permanent and open to eligible residents in all 50 states starting in 2025.

The program was offered on a limited basis this year to residents of 12 states, attracting about 140,000 users — a small fraction of the potential user base, but more than the IRS had expected to see in its first test run. Treasury said that participating tax filers claimed more than $90 million in refunds through the program, while saving roughly $5.6 million in filing costs.

The Direct File program received funding through the Inflation Reduction Act, which made it through Congress with only Democratic support. Although critics on the right and in the for-profit tax filing industry have complained about the cost of developing a new system, IRS Commissioner Danny Werfel said in April that the tax agency has spent far less than expected on the project, with about $10.5 million going toward development and another $2.4 million for operations. Werfel also said that it’s not clear how much the full expansion will cost since some Republican-led states said they may not participate. The Biden administration has reportedly budgeted $75 million for the project next year.

In a statement, Treasury Secretary Janet Yellen said the Direct File program is part of the Biden administration’s effort to use government resources to help ordinary citizens. “President Biden is committed to saving Americans time and money and ensuring families receive the tax benefits they’re owed,” she said. “Providing a free tool to all Americans who want the option to file directly with the IRS is key to achieving those goals.”

Even with the expansion of Direct File to all 50 states, not all tax filers will be able to use the program, which can handle only a limited set of income types. Some of the program’s supporters are calling for a more sophisticated version that can be used by a wider variety of filers, and that draws on existing IRS databases to make the filing process easier.

Still, once the program is widely available, it is expected to save millions of Americans money when it comes to filing their taxes. The average American spends about $140 per year on the dreaded task.

Send your feedback to yrosenberg@thefiscaltimes.com.

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