Even Goldman Sachs HATE GOP’s Tax Bill

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Before Senate Republicans passed their tax bill last Saturday, GOP leaders have been desperate to secure a political victory on tax reform policy.

Two reports, from The Intercept and Business Insider, show the narratives of the GOP reform effort: the smiling party in front of the camera and the desperate one behind it, scrambling for momentum as we approach the soon to be intense 2018 primaries.

Through an investigation from The Intercept’s Lee Fang, the smiling party is spinning the narrative that everything is fine. Touting the endorsements of legislators and supposed experts, House Majority Leader Paul Ryan (R-Wis), Sen. Rob Portman (R-OH) and the Senate Finance Committee released a letter saying over 137 economists have curiously endorsed their new policy. This same letter being tweeted out in video format by President Donald J. Trump.

“Economic growth will accelerate if the Tax Cuts and Jobs Act passes, leading to more jobs, higher wages, and a better standard of living for the American people,” the letter reads. “We firmly believe that a competitive corporate rate is the key to an economic engine driven by greater investment, capital stock, business formation, and productivity — all of which will yield more jobs and higher wages.”

Now, if these were all the facts presented, one could perceive it as a victory, both in rhetoric and policy. This Republican economic salvation long awaited that the right has been hailing for years… behind this narrative lays two inconvenient truths for the right-wing. The first is many of those 137 economists aren’t even real economists, and even real economists from Goldman Sachs, infamous for their fraudulent involvement in the subprime mortgage crisis, dislike the bill.

The Intercept investigated one of the signatories, Gil Sylvia of the University of Georgia, who is basically a non-person. Fang was unable to find a biography page, an online trace of employment at the university, and was told by a university representative that no Gil Sylvia is employed there.

Another debunked signatory was Seth Bied, who just so happens to not be an economist at all. Who is he? Oh, just your run of the mil, low-level office assistant working 9–5 for the New York State Tax Department, who told to The New York Daily News, via a spokesperson, he didn’t remember signing the letter at all.

Others were tried economists, such as Richard Kilmer of the University of Florida and Jerold Zimmerman of the University of Rochester, while others, like John P. Eleazarian, is listed as an economist with the American Economic Association. However, Fang discovered that titles of economist at the AEA are given to any member who pays over their financial dues to that institution. Essentially it’s no different than buying a degree. You can say you’re a doctor in feminist dance therapy, but that doesn’t mean you studied to be one.

Do you see a pattern of falsehoods for overt boasting here? The smiling narrative that is hiding behind the unpersoned, the insignificant and the powerless? Let’s turn over to the second narrative: what are actual economists, who would benefit from the GOP vision, thinking?

“We have increased our estimate of the growth effects of the legislation slightly, to around 0.3 [percentage points] in 2018 and 2019,” Alec Phillips and Blake Taylor wrote to their clients on Monday, according to Business Insider.

“This reflects the slightly larger amount of tax cuts in the Senate plan following revisions, and our expectations regarding the eventual compromise. We note that the effect in 2020 and beyond looks minimal and could actually be slightly negative.”

According to The Hill, the tax policy, set to be voted on in the house, would result in the lowering of tax rates through 2025, with a permanent cut to the corporate tax rate from 35 percent to 20 percent, which would drive up the deficit Republicans have also been hailing about under Obama.

This wouldn’t be the case if Republicans hold true to the promise that cutting the tax rate results in more economic growth, turning a 20 percent rate on the new income into the same amount as a 35 on the current income. However, hating that I have to quote Goldman Sachs as the moral authority on anything, their projections from last week estimate only a 0.1 to 0.2 percentage growth in the economy.

“We find a boost to GDP growth of 0.1–0.2 [percentage points] in 2018–2019 and smaller amounts in subsequent years, consistent with our existing estimates,” the Goldman Sachs report concluded.

That is by far and way not going to cover the cost of the social safety net and the expenses of deficits, debts and war America has on its plate. The money just won’t be there if their numbers bare out.

Whether the bill reaches Trump’s desk before Christmas is to be determined.

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