Christmas in July

If you go to the Trump household in Mar-a-Lago this week there is an 80% chance you will find a fully decorated Christmas tree in the living g room. I bet even the Jewish members of the President’s extended family were celebrating Christmas this week.

The biggest gift was the Big Beautiful Bill (BBB) but it is not the only gift.

I understand why Elon Musk was against the BBB. It cuts green energy subsidies. That makes Tesla automibiles more expensive and ends subsidies for solar power, like Tesla roofs. I have been looking into getting a Tesla roof. The subsidy would have been about $6,000. My estimate was around $162,000 for a completely new Tesla roof. Whether or not I decide to get it will not be affected in any way by the nominal government subsidy.

The people it will affect the most are the people in Hawaii, who already pay the highest electric rates in the United States. I am not going to lose any sleep over that. It serves them right for sending Oh No Hirono to Washington for the last 18 years.

Yet, Elon Musk is correct. The BBB will cost some jobs. Those jobs were not created as a result of sustainable market conditions. They were manufactured by the Biden administration giving money to horrible companies that failed to enhance our economy and by adding more than 300,000 people to the federal payroll.

The last administration subsidized companies like Proterra, the bus manufacturer that never built a reliable bus. Of the only 299 buses they actually built and sold, 100% are no longer in service. They either cracked in half because of poor plastic construction or could not hold a battery charge long enough for a bus to complete a single route. When Proterra finally ended its bus manufacturing farce, the federal government had given them more than $4 million per bus.

Anyway, back to the BBB. I did something none of the Democrats did. I read the entire bill that President Trump signed into law on Friday. I am certain none of the Democrats read it because there is not a single tax benefit in the entire bill that favors the wealthiest taxpayers. If they had read the bill, they would know that fact so they would not be going on television and holding rallies to claim that it favors the rich. That would be an outright lie. And we know Democrats never lie.

Let’s start with the tax rates themselves. Nothing in the bill changes the tax rates. The highest marginal tax rate remains at 34%. As before, all of the deductions talked about in the news are phased out for the very high taxpayers so the people paying most of the nation’s taxes don’t even get to take advantage of the deductions the BBB does provide.

Even removal of taxes on tips and overtime have limits. Therefore, the professional waiters at the highest-end restaurants will still be paying tax on part of their tips. Companies that try to cheat by hiding part of employee salaries as overtime will be limited to doing that for about a month. Hardly worth the risk of going to prison.

The $4,000 tax credit for Social Security recipients will help all but the highest earning Social Security recipients. That credit will cover all of the taxes on recipients with no other income. Yes, it is a tax benefit for the poor. It will increase the percentage of Americans who pay no income tax from the roughly 40% it is now to about 41%. Ooooh.

Likewise, the tax deductibility of automobile loan interest is not going to affect the highest taxpayers. I remember a tax professor telling us that good tax lawyers take advantage of all tax benefits but good businessmen don’t make their decisions based only on tax savings. I don’t see somebody deciding to borrow money and pay interest just because they would get a tax deduction. And again, that deduction is phased out for everyone at the highest income levels.

Do you think the billionaires are going to take advantage of the increased child tax credit? They cannot. It also phases out as income rises.

In the entire BBB, I found only two things that could possibly help billionaires. The first would be the increase in the amount of state and local taxes that can be deducted. Again, however, like all federal tax deductions, it is subject to the alternate minimum tax and phases out as incomes rise.

The only other thing that could possibly help billionaires is the continuation of many government handouts to worthless companies and “nonprofit” organizations. The gifts have caused thousands of people to greatly increase their net worth. I can understand why the Senate would not cut these further. Many of these gifts fund businesses in states that have a senator up for reelection next year. Increasing the number of unemployed people is not a good way to get reelected, even if they were employed through a communist redistribution scheme.

Also, the Trump economists know that they cannot completely turn off the government spigot. To do so would cause a recession because of the number of people put out of work and the number of government parasites who will no longer have large sums of money to stimulate our economy with their elitist lifestyles. One of my early partners used to say it takes three times as long to fix something as it did to create it. That means we should have a balanced federal budget in about 90 years.

As to the BBB increasing the deficit, everything being argued is based on projections (pronounced “guesses”). We have seen previously that President Trump’s economists tend to be much more accurate than the communists in their projections. Nevertheless, without more spending cuts we will need to have substantial economic growth to significantly reduce the deficit. That is probably why President Trump has not been persistent about cutting more pork out of the BBB (see above).

The biggest support for the claim that the BBB will increase the deficit, however, comes from the Senate’s refusal to include a prohibition on using Medicaid funds for illegal aliens. That provision was stricken because of a procedural rule that their parliamentarian claims prohibits it. I double-checked, however, and the Senate Parliamentarian will not give an opinion on anything unless asked to do so by a senator. Therefore, the Democrats could have avoided its exclusion simply by not requesting an opinion from the parliamentarian.

I think the House of Representatives should pass a single-issue Bill on that subject alone and send it to the Senate. Let the Democrats filibuster it and see how well they do campaigning next year while trying to explain their position to the 85% of Americans who want that restriction. This could be a gift that keeps on giving.

In any event, it is not going to affect the application of the law in a substantial way. Medicaid, as of Friday, now has work requirements and it is against the law to employ illegal aliens. Therefore, the illegals will not be able to legally receive Medicaid funds anyway. We should use some of the underused accountants Joe Biden hired for the IRS to completely audit every Medicaid penny spent in New York, Illinois, Pennsylvania, California, Oregon, and Washington. If those states break the law, they should pay for it themselves.

In total, the BBB was like getting an S-class Mercedes for Christmas. And it was a gift to all Americans.

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Another gift received by the President this past week came from the Department of Labor. Most of the economists employed by the nation’s colleges predicted a job increase of around 50,000 jobs. The highest prediction of all (from a conservative think tank) was an increase of about 130,000. The Labor Department reported 147,00,000 new non-farm jobs in June and a reduction in the unemployment rate. Yeah, those tariffs really are causing more unemployment, as the experts guessed.

As usual, the best part of the gift was in the details. There were net 73,000 new government jobs in June. 80,000 of them were for state and local employees. The federal government actually reduced its payroll by 7,000 employees last month. It was the only category in any sector to show a reduction.

In other words, President Trump did exactly what he said he was going to do. In addition, that is less than 1/3 of 1% of federal employees when he took office so it also disproves the Democrats’ claim that President Trump is gutting the federal workforce.

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Just when we thought Christmas was over, the Supreme Court showed up for Christmas in July and they were all wearing Santa suits.