M. Bloomberg Says GOP Tax Bill Is "Trillion Dollar Blunder"

Michael Bloomberg (conservative businessman, multi-billionaire, and ex-mayor of New York City) has given us his opinion of the Republican tax reform bill -- and it's not good. He calls the bill a "trillion dollar blunder". Here's much of what he had to say:

Last month a Wall Street Journal editor asked a room full of CEOs to raise their hands if the corporate tax cut being considered in Congress would lead them to invest more. Very few hands went up. Attending was Gary Cohn, President Donald Trump's economic adviser and a friend of mine. He asked: "Why aren't the other hands up?"

Allow me to answer that: We don't need the money.

Corporations are sitting on a record amount of cash reserves: nearly $2.3 trillion. That figure has been climbing steadily since the recession ended in 2009, and it's now double what it was in 2001. The reason CEOs aren't investing more of their liquid assets has little to do with the tax rate.

CEOs aren't waiting on a tax cut to "jump-start the economy" -- a favorite phrase of politicians who have never run a company -- or to hand out raises. It's pure fantasy to think that the tax bill will lead to significantly higher wages and growth, as Republicans have promised. Had Congress actually listened to executives, or economists who study these issues carefully, it might have realized that.

Instead, Congress did what it always does: It put politics first. After spending the first nine months of the year trying to jam through a repeal of Obamacare without holding hearings, heeding independent analysis or seeking Democratic input, Republicans took the same approach to tax "reform" -- and it shows.

The Treasury Department claimed to have more than 100 professional staffers "working around the clock" to analyze the tax cut. If true, their hard work must have been suppressed. The flimsy one-page analysis Treasury released -- which accepts the White House's reality-defying economic projections in order to claim that the tax cuts will pay for themselves and then some -- is a politically driven document that amounts to economic malpractice. So does the bill itself.

The largest economic challenges we face include a skills crisis that our public schools are not addressing, crumbling infrastructure that imperils our global competitiveness, wage stagnation coupled with growing wealth inequality, and rising deficits that will worsen as more baby boomers retire.

The tax bill does nothing to address these challenges. In fact, it makes each of them worse. . . .

In effect, the tax bill achieves four main things:

• It takes money away from schools and students.
• It restricts our ability to invest in infrastructure.
• It does nothing to boost real wages while making health insurance more expensive.
• It makes it harder to control the costs of Medicare and Social Security without cutting defense and other spending -- or further exploding the deficit.

To what end? To hand corporations big tax cuts they don't need, while lowering the tax rate paid by those of us in the top bracket, and allowing the wealthy to shelter more of their estates. . . .

The tax bill is an economically indefensible blunder that will harm our future.