Trump's Tax Cuts Were Worse than We Thought

The Trump cuts to corporations without matching loophole closures were ill-advised, leading to job losses as I also predicted in 2017. In 2019, the year after the Trump cuts made it through the economy, GDP growth went down a full percentage point. Then we had COVID, which the Fed used to hold all the bad investments from the TCJA harmless. When the economy started toward normality, the Trump cuts - as well as pandemic transfers to the fourth quintile - boosted the stock market as more investment income chased the same assets (or created junk assets - like ETFs with Crypto and Mortgage Securities baked in).

Keeping most of the Trump cuts were necessary for most people, even if the highest income households, who pay most of the taxes, got bigger dollar cuts. A huge number of the tax cuts changed the system - and should have been permanent in the first place. They were not so as to require a tax bill this year. Had they not expired, there would have been no vehicle to work with. Because the changes are now permanent, letting anything temporary die will have no impact.

Biden should have dealt with this issue, but did not find the votes - and the WH was as occupied with hiding is problems as the Trump 45 WH was in hiding Trump's. Now, they are letting Trump be Trump.

Taxes on capitalism (corporate, individual, partnership, Part S) did not change - and they need to because that is where the money is.

Crypto

WM Oversight:  Making America the Crypto Capital  of the World: Ensuring Digital Asset Policy Built for the 21st Century, July 16, 2025

The GENIUS Act has passed both Chambers and has been sent to President Trump. The House has passed the CLARITY Act and sent it to the Senate, both on a bipartisan basis. An additional bill barring the Federal Reserve from establishing its own digital currency has also passed the House. The reality is that Federal Reserve Notes are already traded on many platforms as online banking and purchases - so the dream of electronic commerce has already been realized.

Stablecoins, which are pegged to a real asset, is a form of cryptocurrency that has the potential to be real money - which can be defined as a form of exchange that can be used to satisfy debts to the public - both in the form of taxation and the ability to be seized as the result of civil and criminal judgments - including seizures to claw back transactions subsequent to criminal activity.

Frankly, no other form of digital currency should be allowed. It should certainly not be encouraged by the United States Congress. 

Experts, such as Warren Buffett, see no value in such currency investments because they are not tied to any form of productive activity. In essence, those who trade in these currencies seek to be the second to last person owning them before the market corrects itself. It is the kind of Ponzi scheme from which economic collapses result.

This Committee has shown concern in the past on overpayments surrounding Pandemic relief. These are less worrisome than the fact that many households invested such payments in cryptocurrency - a junk asset - because families who had high enough incomes to not need the aid used it to gamble instead of meeting basic needs in an uncertain economy. These events demand oversight much more than misuse of Unemployment Insurance.

Historically, money exists in order to pay taxes, as mentioned above. For this asset, taxes should be remitted, not at the end of the year as a capital gain (or loss), but with each transaction, in the form of an asset value added tax. Would this destroy crypto? If only it could. Imposition of this tax would make such transactions accountable, especially if imposition were coordinated across borders so as to prevent “market shopping” for a lower tax rate.

Attachment: Asset VAT

Big Beautiful Bill Gets a B

This bill is largely ministerial and optics. Biden could have gotten a tax increase, plus extension of the good parts of the bill (which preserve tax rule changes that were bipartisan and should not have been time limited for ten years) but he did not. Had he been successful, the upcoming depression due to housing prices would not have already started. I say depression because prices will be lower than the debt backing the assets - not merely a slowdown in consumer spending.

The debt is mostly sucked up by retirement funds, money and mutual funds, as well as by the rich, and it makes capitalism possible. Unless there is a major push for employee-ownership, there is no other alternative (TINA). Not now does not mean never.

The Medicaid and SNAP cuts are back loaded and will be abolished by the next Democratic Congress after the 2026 election. AARP will do its job - either loudly or quietly - depending on how Trump or Vance feels. Vance will let it happen quietly.

The immigration pieces that are unconstitutional will not take effect, those that are show that elections matter.  Oddly, Trump is going after human trafficking in Big Agriculture and Food, Inc., which his capitalist friends do not like. Immigration reform may one day happen if enough pressure is applied. Big Food stopped it by funding the whole birthright citizenship issue - they liked having a pliant trafficked workforce. Trump is ruining this for them, so maybe they will have to back reform.

Progress cannot be stopped forever.