Saturday, March 19, 2016

Why I prefer Trump over Hillary

This 2016 presidential election cycle is the most bizarre I have ever witnessed. The party system seems to be on the verge of collapsing.

The front-runner in the Republican party is Donald Trump, a non-politician and party outsider; he was not aligned with Republicanism any more than with Democratism in the height of his business career, during which he donated to both parties and his sole interest was favorable legislation for his enterprises. He is despised by Republican party establishment politicians who view him as a loose cannon who does not represent the party platform interests of war/defense industry, foreign entanglement, deregulation, low taxes on the rich, and so on. (Interestingly, this party elite doesn't care about his relatively pro-abortion stance, which issue it only espouses due to its evangelical constituency, one that doesn't constitute the core of the Republican party.)

On the Democratic side, Bernie Sanders is growing stronger by the day and poses an enormous, underrated, threat to topple its establishment frontrunner Hillary Clinton. Sanders is not even a Democrat and was not originally seen as a viable contender by the party elite.

Thus on both sides we have strong party candidates who are aiming for non-establishment interests and the establishment in either party is scrambling to figure out what to do to regain control of the situation.

Overall I consider myself a centrist/independent ideologically. In some respects I agree with Democratic principles, e.g. sensible business regulation, high taxes on the rich and basic provisions for the masses. In some respects I lean more Republican, e.g. moral absolutism, authoritarianism (as in submission to "authority" without the pejorative connotation of the word), personal responsibility, elimination of affirmative action and a conservative judiciary. However, the current Republican party, hijacked by the 2010 Tea Party radicals, sworn to never compromise on its principles, and oppose the Obama Administration no matter what it proposes, is hardly the Republican party of Reagan. So I would normally vote Democratic (which governs from the center for the most part) in elections.

But like I said, this election cycle is different.

Whereas I am a strong Bernie Sanders supporter (for which reasons I won't discuss right now), it isn't because I bear any loyalty to him personally, let alone the party under which auspices he is running. I do not agree with everything he says, especially on moral issues (I am believe in greater moral absolutism and sterner government enforcement of the law), but I don't see elections as ever being black or white propositions. One most vote for the best of the bunch, not for the perfect one. Fortunately, I consider Bernie Sanders a very good representative for most of my interests as a member of the working class, struggling under many years of widening income and wealth inequality.

And I emphatically disagree with his statement that any Democrat would be better in the White House than any Republican, and that the policy differences between him and Hillary are negligible compared to any policy platform proposed by the other side. I'm not sure if he really means it when he says it; perhaps it's something he is expected to say, now that he is running for the Democratic ticket.

The reality of the situation is that Trump's actual policies, not his obnoxious persona or the things he says, are quite tolerable. Conversely, taking a look at Hillary's policies and her modus operandi as a politician I find her grossly repulsive.

So here's a breakdown of some Trump positions, takes from his website and how much I agree with them.

On Healthcare:
Completely repeal Obamacare. Our elected representatives must eliminate the individual mandate. No person should be required to buy insurance unless he or she wants to.
 Okay, I applaud this libertarian lean, but let's see how he solves the problem...
Modify existing law that inhibits the sale of health insurance across state lines. As long as the plan purchased complies with state requirements, any vendor ought to be able to offer insurance in any state. By allowing full competition in this market, insurance costs will go down and consumer satisfaction will go up.
He's scapegoating here. Lack if Interstate competition is NOT the culprit for high premiums. There is plenty of room for competition within a state. Eliminating state lines on the provider side poses a problem if we agree that states should still be allowed to enact their own healthcare, insurance, and business laws
Allow individuals to fully deduct health insurance premium payments from their tax returns under the current tax system. Businesses are allowed to take these deductions so why wouldn’t Congress allow individuals the same exemptions? 
I fully agree with this position, insofar as we take for granted that business ought  to be able to deduct their healthcare expenditures from their income. Even better would be, however, to scrap the healthcare deudction altogether.

As we allow the free market to provide insurance coverage opportunities to companies and individuals, we must also make sure that no one slips through the cracks simply because they cannot afford insurance. We must review basic options for Medicaid and work with states to ensure that those who want healthcare coverage can have it.

Sounds like an expansion of Medicaid to me. Isn't this EXACTLY what Obamacare did, and isn't this the one component of Obamacare that conservatives got the Supreme Court to strike down, and Republican governors had successfully repelled? Oh, right, it is. So when it comes to substance, Trump's position here isn't all that anti-Obamacare, or "conservative".
Allow individuals to use Health Savings Accounts (HSAs). Contributions into HSAs should be tax-free and should be allowed to accumulate. These accounts would become part of the estate of the individual and could be passed on to heirs without fear of any death penalty. These plans should be particularly attractive to young people who are healthy and can afford high-deductible insurance plans. These funds can be used by any member of a family without penalty. The flexibility and security provided by HSAs will be of great benefit to all who participate.
I fully agree with HSA's as a major improvement to the pre-Obamacare state of affairs. HSA's are essentially a logical extension of the "insurance premiums should be tax deductible" doctrine. As I said earlier, I would have preferred that this be abolished altogether, but a selective application of it, as was the case prior to the ACA is patently unfair to those who do not get employer coverage. HSA's are also a very effective motive for acting responsibly in planning for a rainy day, all the while NOT involving the insurance company middleman, which is monumentally grievous distorter of the natural healthcare market. Prior to the ACA many young people went uninsured if it wasn't employer-provided. If HSA's were available to them, they may well have used them. As Trump insinuates, HSA's may not have enough money in the account to cover catastrophic care, but catastrophic insurance policies (as exemplified by high-deductible policies) are much more affordable.
Require price transparency from all healthcare providers, especially doctors and healthcare organizations like clinics and hospitals. Individuals should be able to shop to find the best prices for procedures, exams or any other medical-related procedure.
He couldn't have said it better! And I agree that government has a legitimate role to play here for the purpose of ensuring a fair marketplace. (This would thus meet the Libertarian principle of government action being justified to prevent fraud, as stipulated by Charles Murray.) Transparency in pricing also encourages HSA's as opposed to insurance policies, since consumers can then shop around and pay perhaps less than what an insurance company would pay for care on his behalf.
Block-grant Medicaid to the states. Nearly every state already offers benefits beyond what is required in the current Medicaid structure. The state governments know their people best and can manage the administration of Medicaid far better without federal overhead. States will have the incentives to seek out and eliminate fraud, waste and abuse to preserve our precious resources.
I agree with this. If a Medicaid program for the poor is to be implemented, the federal government is best off leaving the states to decide what constitutes poverty, and what and how benefits ought to be distributed. This is due to regional differences in income.
Remove barriers to entry into free markets for drug providers that offer safe, reliable and cheaper products. Congress will need the courage to step away from the special interests and do what is right for America. Though the pharmaceutical industry is in the private sector, drug companies provide a public service. Allowing consumers access to imported, safe and dependable drugs from overseas will bring more options to consumers.
I love this item the most! Trump takes a swipe at the omnipotent pharmaceutical industry here, which is so so overdue. Sanders comes at it from a completely different angle of course. But I do agree that if the free market is going to provide healthcare, the least the government can do is prevent powerful conglomerates from forcing the public to pay obscene amounts for basic necessity drugs. In this respect, I disagree strongly with Murray's libertarianism, in that the government does have a very legit role in regulating markets that provide basic necessities to the public.

Providing healthcare to illegal immigrants costs us some $11 billion annually. If we were to simply enforce the current immigration laws and restrict the unbridled granting of visas to this country, we could relieve healthcare cost pressures on state and local governments.
I agree that the illegal immigration problem is especially exacerbated with respect to health care. There are anecdotes of illegal immigrant expectant mothers coming here to give birth, both to have an "anchor baby" citizen by which they will remain moored to the U.S. and protected from deportation, and to get American-style high-quality neonatal care for free.

Although Trump doesn't mention it here, I also agree with him that the legal citizenship status of such babies is dubious. We need to to take a second look at the traditional assumption of birthright citizenship. The writers of the 14th amendment almost certainly didn't intend to grant citizenship rights to those "born or naturalized in the U.S." in this way.

Whether this $11 billion is accurate is immaterial. We shouldn't have to spend a penny on illegal immigrants, especially if they are deliberately entering our country for the purpose of receiving free benefits, knowing that we will be compassionate.

Finally, we need to reform our mental health programs and institutions in this country. Families, without the ability to get the information needed to help those who are ailing, are too often not given the tools to help their loved ones. There are promising reforms being developed in Congress that should receive bi-partisan support.
Not sure to what type of "information needed to help those who are ailing" he is alluding here.

Regarding Trump's Tax plan:

Too few Americans are working, too many jobs have been shipped overseas, and too many middle class families cannot make ends meet. This tax plan directly meets these challenges with four simple goals:
  1. Tax relief for middle class Americans: In order to achieve the American dream, let people keep more money in their pockets and increase after-tax wages.
This vision is highly dubious. With a staggering national debt, a crumbling public infrastructure and a bloated government, no responsible economist recommends a tax cut to ANYONE, including the middle-class. But certainly, if he considers me the middle-class, I could use a tax cut.
  1. Simplify the tax code to reduce the headaches Americans face in preparing their taxes and let everyone keep more of their money.
Right on!
  1. Grow the American economy by discouraging corporate inversions, adding a huge number of new jobs, and making America globally competitive again.
  1. Doesn’t add to our debt and deficit, which are already too large.
Okay, then, how will you give a tax break to the middle class -- if you stipulate the tax break cannot result in an increasing deficit?
  1. If you are single and earn less than $25,000, or married and jointly earn less than $50,000, you will not owe any income tax. That removes nearly 75 million households – over 50% – from the income tax rolls. They get a new one page form to send the IRS saying, “I win,” those who would otherwise owe income taxes will save an average of nearly $1,000 each.
Wow, this us huge! This means that I will owe nothing in income taxes. This is so so welcome, but more importantly, the right thing to do! People like me who work extremely hard but make little income should not be taxed if the tax can be made up by increasing the burden on those who got lucky and are raking it in hand over fist.
  1. All other Americans will get a simpler tax code with four brackets – 0%, 10%, 20% and 25% – instead of the current seven. This new tax code eliminates the marriage penalty and the Alternative Minimum Tax (AMT) while providing the lowest tax rate since before World War II.
Sounds good.
  1. No business of any size, from a Fortune 500 to a mom and pop shop to a freelancer living job to job, will pay more than 15% of their business income in taxes. This lower rate makes corporate inversions unnecessary by making America’s tax rate one of the best in the world.
This solves the problem of global competitiveness for business headquarters.
Oh no, Mr. Trump. I am a very strong proponent of the estate tax. It serves to level the playing field and counteract the Matthew Rule (the rich get richer and the poor get poorer). Most importantly, it minimizes the effect of luck on material prosperity and lets grit, talent, and dedication shine.
  1. No family will have to pay the death tax. You earned and saved that money for your family, not the government. You paid taxes on it when you earned it.
But then again, what can one expect from such an egotistical person, as Trump? He knows only of his own success, and that certainly would not have been possible without his hefty inheritance.
  1. Reducing or eliminating most deductions and loopholes available to the very rich.
  2. A one-time deemed repatriation of corporate cash held overseas at a significantly discounted 10% tax rate, followed by an end to the deferral of taxes on corporate income earned abroad.

  1. Reducing or eliminating corporate loopholes that cater to special interests, as well as deductions made unnecessary or redundant by the new lower tax rate on corporations and business income. We will also phase in a reasonable cap on the deductibility of business interest expenses.
Income Tax RateLong Term Cap Gains/ Dividends RateSingle FilersMarried FilersHeads of Household
0%0%$0 to $25,000$0 to $50,000$0 to $37,500
10%0%$25,001 to $50,000$50,001 to $100,000$37,501 to $75,000
20%15%$50,001 to $150,000$100,001 to $300,000$75,001 to $225,000
25%20%$150,001 and up$300,001 and up$225,001 and up
Love it, but I need to see the numbers here. Do the rich pay less than a 25% "effective" marginal (non-investment) income tax rate presently?
10% is letting them off the hook. I don't see why it should be so little.

For those Americans who will still pay the income tax, the tax rates will go from the current seven brackets to four simpler, fairer brackets that eliminate the marriage penalty and the AMT while providing the lowest tax rate since before World War II:
With this huge reduction in rates, many of the current exemptions and deductions will become unnecessary or redundant. Those within the 10% bracket will keep all or most of their current deductions. Those within the 20% bracket will keep more than half of their current deductions. Those within the 25% bracket will keep fewer deductions. Charitable giving and mortgage interest deductions will remain unchanged for all taxpayers.
Simplifying the tax code and cutting every American’s taxes will boost consumer spending, encourage savings and investment, and maximize economic growth. 
I hope that Trump is proposing these tax be marginal. It would be absurd to say that if a couple earns $49,000 it owes nothing in taxes, but if its income goes up to $50,000 its tax liability is now $5,000, thus netting less for greater productivity. If, on the other hand, these brackets are not marginal, it would explain why those in the lower brackets will have a wider range of allowed deductions.

However, if the goal of tax reform is to eliminate its complexity, then why not eliminate ALL deductions, period.

While I'm at it, I'm of the opinion that both charity and mortgage interest should be fully taxable. Those deductions have a distorting effect on the natural incentives of the market (e.g. buying or renting a home) and so it's bad policy.

Too many companies – from great American brands to innovative startups – are leaving America, either directly or through corporate inversions. The Democrats want to outlaw inversions, but that will never work. Companies leaving is not the disease, it is the symptom. Politicians in Washington have let America fall from the best corporate tax rate in the industrialized world in the 1980’s (thanks to Ronald Reagan) to the worst rate in the industrialized world. That is unacceptable. Under the Trump plan, America will compete with the world and win by cutting the corporate tax rate to 15%, taking our rate from one of the worst to one of the best.
This lower tax rate cannot be for big business alone; it needs to help the small businesses that are the true engine of our economy. Right now, freelancers, sole proprietors, unincorporated small businesses and pass-through entities are taxed at the high personal income tax rates. This treatment stifles small businesses. It also stifles tax reform because efforts to reduce loopholes and deductions available to the very rich and special interests end up hitting small businesses and job creators as well. The Trump plan addresses this challenge head on with a new business income tax rate within the personal income tax code that matches the 15% corporate tax rate to help these businesses, entrepreneurs and freelancers grow and prosper.
These lower rates will provide a tremendous stimulus for the economy – significant GDP growth, a huge number of new jobs and an increase in after-tax wages for workers.
It's a bit unclear here what his proposal is. It seems to me that he's saying that the low 15% tax rate will apply to not just corporations (which are taxed twice) but also to individual proprietors; in other words, EVEN if the business owner nets more than $100,000 (for a married couple) in personal income from the business --in which case ordinarily they would fall in the 20% bracket-- it will pay only 15% because its entrepreneurial income as opposed to labor income.

I can't say I agree with this. For genuinely small business owners I'm sort of okay with it. They often take significant risk in starting the business, so they should be able to reap a greater reward as a proportion of their gross income. But what if one owns a large, very wealthy enterprise that yields tens of millions in profit? Should he still pay a mere 15% tax rate, as opposed to the 25% that, say, a successful doctor/lawyer would pay for their $350,000 income? This makes no sense to me, nor to most Americans, especially those in the labor class who are treated adversely compared to the entrepreneurial class.

Regarding the essential premise that the corporate rate should not be greater than 15% lest it encourage inversions, I am fairly skeptical about this approach as well. As it stands now, even such "inverted" corporations, must legally pay the higher tax rate for the portion of its income generated in the U.S. So the inversion isn't all that straightforward. The reason it works is that accountants are attributing a greater share of the profits to the supposed host country that offers the lower rate. But if this tactic can be legally curtailed, then it won't work. Bottom line is that it's not true that we are helpless in our quest to get American business operators to pay the rate that WE deem appropriate based on OUR tax and budgetary considerations, as opposed to the lower rate offered by countries that have a lower per capita public expenditures than us.

This brings me back to the question of globalization. I don't believe we should relish the flattened world we live in. I believe it's totally fine to keep some trade barriers between countires, even at the expense of technological progress and cheaper consumer goods.