Saturday, November 04, 2017

Ryan And Trump Pick Winners And Losers With Their Very Flawed Tax Proposal

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The nonpartisan ethics watchdogs, Citizens for Responsibility and Ethics in Washington (CREW), was blunter than most when it came to defining the Trump/Ryan tax plan: it was designed lower Señor Trumpanzee's taxes. The Alternative Minimum Tax, which Ryan wants to eliminate entirely, cost Trump $31 million in 2005, the one year people got to examine part of Trump's returns. That tax was designed to get something out of crooked millionaires and billionaires who game the system to avoid taxes-- like Trump. But that's not all that's wrong with this corrupt tax plan for the rich.

Congresswoman Pramila Jayapal, who represents Seattle called it "nothing but a dream come true for the biggest corporations. It will further destroy the middle class by giving huge tax breaks to wealthy Americans on the backs of working people. Corporate profits currently sit at historic highs and the effective corporate tax rate in the U.S. is one of the lowest in the entire world. In spite of that, Republicans want to lower corporate taxes by 15 percent, add trillions to the deficit and reward big business by giving special perks to those who ship jobs overseas. On top of all this, the GOP is working to give a handout to the 5,400 wealthiest families across the country in the form of estate tax repeal. For a party that claims to be against so-called government handouts, they seem to have no problem giving everything we’ve got to big business and the super-rich. These giveaways come at the expense of programs that help American families get by, but this plan comes as no surprise. It is everything you’d expect from the party that is deep in the pocket of millionaires, billionaires and corporations. It’s up to all of us make tons of noise and defeat it, just as we defeated the GOP’s efforts to transfer wealth to the richest by stripping health care from the American people.”

Rep. Carol Shea-Porter, from New Hampshire, saw it very similarly. She noted how Ryan and his conference are "trying to rush a gift to the wealthiest corporations and individuals through Congress by misleading Americans about how their plan would really affect low- and middle-income families-- just like they did with their failed health care repeal plan. This bill eliminates critical deductions that help working people, including the student loan interest and tuition deductions, and curtails the State and Local Tax deduction. It blows up the deficit, setting the stage for drastic cuts to federal spending on Medicare, Medicaid, education, infrastructure, and other crucial domestic programs. And I agree with Senator Marco Rubio that this bill’s failure to meaningfully expand refundable provisions that put money in working families’ pockets and that have strong bipartisan support, including the Child Tax Credit and the Earned Income Tax Credit, is a huge missed opportunity to grow and strengthen the middle class. Meanwhile, the plan is loaded with provisions to help the wealthiest. It eliminates the estate tax, which only applies to estates valued over $11 million for heirs who are joint filers and will only be paid by an estimated 5,500 Americans this year. And it slashes the corporate tax rate claimed by larger businesses while actually raising rates for many small businesses, earning it opposition from the right-leaning National Federation of Independent Business (NFIB). House Republicans’ tax plan isn’t just regressive-- it’s enormously hypocritical. After subjecting our country to years of obstruction and brinkmanship over the debt ceiling and government funding levels as they claimed they cared about the deficit, House Republicans have now proposed a plan that would explode the deficit by $1.5 trillion or even more. They want to repeat the damage they did during the Bush era, when they drove up the national debt by $4.9 trillion. We’ve seen this rodeo before, and it was a disaster. In 2003, seeking a second round of tax cuts, Vice President Dick Cheney infamously said: ‘Reagan proved that deficits don’t matter.’ This year, House Republicans are again acknowledging that they only care about deficits when it’s politically expedient. ‘It’s a great talking point when you have an administration that’s Democrat-led,’ said Representative Mark Walker (R-NC), chairman of the hyper-conservative Republican Study Committee."

So what's she going to do about it? She was very clear that she will "never support a plan that exacerbates income inequality by giving away even more to corporations and individuals that are already favored by our tax code, and then, in the name of deficit reduction, asks working Americans to bear the brunt of draconian budget cuts to essential federal programs. In contrast to the closed process that yielded this unacceptable proposal, I will continue to advocate for an honest, bipartisan discussion on revenue-neutral tax reform that prioritizes tax relief for working families and small businesses in order to address our nation’s income inequality crisis.”

Early polling indicates that 60% of Americans agree with Shea-Porter and Jayapal on the bill-- and that includes 60% of wealthy people who would benefit most from this unfair plan! Only 33% of voters polled are embracing the proposal, the same percentage of people who still back Trump.




Jamie Raskin (D-MD) speaks for most progressive Democrats when he points out that "the GOP’s outrageous plutocrat tax plan is a civic emergency... According to the New York Times, the GOP’s plan would 'raise taxes on nearly 13 million tax filers who earn $100,000 a year or less.' It would wipe out the Alternative Minimum Tax, the only reason Donald Trump paid any taxes at all the one year we know he paid taxes in the last several decades, 2005. He paid $36 million that year; under his new plan, he would have paid $5 million. It would decimate the estate tax which affects only two out of 1,000 families in America, the richest people in the country. It will provide tax incentives for shipping jobs overseas and increase the deficit by an estimated $1.5 trillion-- which Republicans will surely use to call for massive cuts to Medicare and Medicaid. It’s a scandal, and we have to stop it the only way we have been able to stop all the nonsense-- through popular organizing and political action."

From his Esquire perch Charles Pierce pointed out Ryan's nonsense is all unicorns. "One good way to understand what’s going on with this latest exercise in financial misdirection," he wrote, "is to notice that this plan will tax the interest payment on one student’s loans, but that it may no longer tax another student’s multibillion-dollar inheritance. Of course, the estate tax will go away entirely in six years, probably when nobody’s watching. It also will cap the mortgage-interest deduction, probably in the interest of eliminating it entirely when nobody’s watching. So that’s what all that 'middle-class' bafflegab is really all about."
The elimination of the deduction for state and local taxes seems to be based in an entirely new riff that’s become popular among congresscritters who are tired of seeing their laissez-faire hellholes called moochers because the hellholes take in more money from the federal government than they send back to it in taxes. Now, believe it or not, and you will believe it because these people will say anything, the argument is being made that the high-tax states are somehow luxuriating on the backs of Good Country People in places like Alabama and, yes, Kansas. In any event, this provision of the bill has put Republicans from places like New York and New Jersey in a considerable bind, so much so that insisting upon it may be enough to sink the bill entirely.
Goal ThermometerThe only way it will pass while these deductions are in place is if California Republicans-- namely Steve Knight, Mimi Walters, Ed Royce, Darrell Issa, Devin Nunes, Jeff Denham, Duncan Hunter, Dave Valadao and Dana Rohrabacher-- continue to support it. So far all 9 are doing just that. They need more pressure, a lot more pressure-- and their opponents need some support (see the California 2018 thermometer on the right).

Yesterday, Bloomberg's Sahil Kapur looked at who Ryan has chosen to take winner and who he's chosen to make losers.
About 60 percent of the tax cuts will be from corporate tax reduction, another 20 percent through the business pass-through reductions, and the remaining 20 percent to individuals, according to an analysis of the initial plan by Mark Zandi, chief economist at Moody’s Analytics Inc. in West Chester, Pennsylvania.

“The bulk of it is through corporate tax changes and changes to pass-through entities. This is really a cut to business,” Zandi said. “The preponderance-- the vast majority-- of tax cuts go to business.”

Trump’s economic advisers have said that cutting the corporate rate will increase wages, lifting average household income by at least $4,000. Other economists question that finding. But beyond that, the specifics in the new House bill would create winners and losers, especially among those who itemize their tax deductions.

“If you live in a high tax state, are an itemizer, buy a house with a big mortgage, have medical expenses or casualty losses, you will likely be a loser,” said Howard Gleckman, a senior fellow with the nonpartisan Tax Policy Center. “If you take the standard deduction, are married without kids, and have a pass-through business, you will be a winner.”

...Private-equity managers, venture capitalists, hedge fund managers and certain real estate investors escaped unscathed. The House bill preserves the carried interest tax preference despite Trump’s promise to do away with it.

Every Democrat running for Congress should be running ads like this one

During his campaign, Trump highlighted carried-interest, labeling some hedge fund managers as “paper pushers” who are “getting away with murder.” As recently as September, Trump economic adviser Gary Cohn said the president was committed to ending the carried interest tax break.

...Among the biggest losers would be big families with higher incomes who live in states with high income and property taxes. They would lose the state and local deduction (with the exception of a $10,000 cap on deducting property taxes) as well as personal and dependent exemptions worth $4,000 per family member. For many, the doubling of the standard deduction won’t make up their losses.

“Upper middle income households in high tax states will be dinged the most,” Zandi said. “For very high income households, it is probably a wash, though they would benefit from the estate tax” elimination.

There are changes in store for charities and other non-profits. By increasing the standard deduction, advocates for those groups say it could erode the deduction for charitable giving, which remains in the tax code.

"A lot of charities are having a problem with this," Joseph said. "Before, you might’ve written a check for $200 to the Leukemia & Lymphoma Society; now you’re not going to get a deduction for it, so maybe you’re only gonna write it for $150."

And the eventual repeal of the estate tax means people would be less likely to give their fortunes away to charity to avoid paying the 40 percent levy, as many wealthy people currently do in their estate planning. Joseph said that for this reason, charitable groups will have "a problem with the estate tax disappearing."

The deduction for out-of-pocket medical costs -- including such items as prescriptions, drug-addiction treatment and services for special needs children -- would disappear. Almost 9 million taxpayers deducted about $87 billion in medical expenses for the 2015 tax year, according to the Internal Revenue Service.

That will negatively “impact people with relatively low income and a lot of medical expenses,” Joseph said.

The House GOP tax bill is likely to raise the deficit substantially, thereby putting pressure to cut federal safety net programs used by poor people, said Leonard Burman of the nonpartisan Tax Policy Center.

"Low-income people might end being worse off because they’re really not getting anything from the bill and they might end up bearing the cost of cutting big safety net programs," Burman said.

The House tax plan would eliminate a $7,500 per vehicle tax credit that has helped stoke early demand for electric vehicles. That likely will hit carmakers offering those vehicles such as Tesla Inc., General Motors Co. and Nissan Motor Co. Ltd.

“That will stop any electric vehicle market in the U.S., apart from sales of the highly expensive Tesla Model S,” said Xavier Mosquet, senior partner at consultant Boston Consulting Group, who authored a study on the growth of battery powered vehicles. “There’s no Tesla 3, no Bolt, no Leaf in a market without incentives.”

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2 Comments:

At 7:02 AM, Anonymous Anonymous said...

once again polling proves that no less than a third of americans are dumber than shit.

when those who vote are stupid and/or evil, their elected form of government cannot ever be any good.

We've proven this for nearly 40 years now.

 
At 6:06 AM, Anonymous Anonymous said...

The winners are always the same. The losers are always everyone else.

Yet we RE-elected Reagan, elected bush, and elected cheney twice. Obamanation OFFERED tax cuts but only boner's cowardice prevented them. Their combined ineptitude even allowed some of the bushbaby tax cuts to expire.

And we listen to ryan cherry-pick a "typical" middle-class taxpayer who (he says) gets $1000 back... while the kochs get a cut of 10s of billions.

These will pass with big D backing. The debt will increase by a trillion more than it would have ordinarily by 2020 and a crash is guaranteed. But by all means, americans will support them.

 

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