Thursday, November 02, 2017

The Trump/Ryan Tax Cuts For The Rich Take From The Middle Class


Zero Humility by Nancy Ohanian

Before Trumpanzee started demanding Ryan call his tax bill, "The Cut Cut Cut Act," Chuck Todd had reported that House Republicans were facing a major disadvantage with their tax plan, even before they delayed the rollout of their bill until today, namely that "their plan starts out underwater, according to our latest NBC/WSJ poll-- and by about the same margin as the poll's first track of George W. Bush's failed effort to partially privatize Social Security." Only 25% of Americans say they like the plan. About a quarter of Americans already know they'll pay more and just 14% believe they'll be less.

The plan was supposed to come out yesterday but was delayed until today because Ryan and his team don't know shit from Shinola. Katie Hunt reported that some issues were still unresolved hours before the bill had been slated for release.
The heart of the issue: whether the plan can meet the $1.5 trillion spending limit set by the budget and whether the cut will be distributed across the middle class. So-called distribution tables that outline the benefits for the wealth versus the middle class will be closely watched.

Republicans are under political pressure to make sure it's viewed as a broad middle-class tax cut and not a package of tax breaks for wealthy Americans.

So what does that mean? Trouble... big trouble. Jonathan Karl reported yesterday that the closely held, half done plan lowers caps on 401 (k)s and cuts state and local tax deductions for middle class taxpayers. In other words, a massive transfer of wealth from the middle class to the top 2%.
401Ks – The White House, as the President tweeted, wanted to keep the current amount of annual of tax-free contributions ($18,000); House Republicans wanted to lower the limit to $2,400. The bill, as of this morning, does lower what individuals can contribute tax-free to their 401(k)s-- but it lowers it to a point about halfway between the current limit and what House Republicans had initially proposed.

Deduction for State and Local Taxes – The latest draft eliminates the deduction for state and local income taxes. But it retains the deduction for local property taxes.

Estate Taxes – The latest draft of the bill retains the elimination of the estate tax. Although there had been intense internal debate as recently as Tuesday night about phasing it in-- increasing the amount exempt from estate taxes (it’s currently $10.9 million for married couples) for the first five years and then eliminating it altogether-- sources say the latest draft calls for the complete elimination of the estate tax.

This is it-- at least for now... their starting point as they debate each other and the lobbyists. It makes sweeping changes in corporate and individual taxes, including deep tax cuts, limits to the mortgage interest deduction and bigger family tax credits. It also includes provisions that are likely to stoke controversy and fierce lobbying, including limiting the deduction of mortgage interest for newly purchased homes up to $500,000. On two other flash points, the plan would "retain" 401(k) savings plans and allow people to write off the cost of state and local property taxes up to $10,000. The plan would slash the corporate tax rate to 20 percent and create three new individual tax brackets of 12%, 25%, and 35%. It would maintain a 39.6 percent rate on top earners and boosts the child tax credit to $1,600. It would also double the exemption for the estate tax and repeal it after six years. Also gone: the medical expense deduction and the student loan interest deduction. The best headline I saw explaining the politics of the plan: "President with 33% approval rating pushes tax plan with 25% approval rating." Although Frank Clemente, Executive Director of Americans for Tax Fairness had a way with words on this too: "Apparently Donald Trump wants to call this tax plan 'The Cut Cut Cut Act.' That's appropriate because they're cutting taxes for billionaires, cutting taxes for corporations, and cutting funding for Medicaid and Medicare to pay for it all. In the meantime, some middle-class families will likely end up paying MORE in taxes because of the loss of popular deductions, while corporations will get a multi-trillion dollar windfall. It's outrageous and immoral, and voters will hold them accountable for it."

Goal ThermometerI spoke with some of the candidates Blue America has endorsed and some who we're still in the process of vetting. Sam Jammal is the non-multimillionaire running for the Orange County district as middle class as he is. The removal of the tax deduction for houses over $500,000 will cripple the home building industry-- and related endeavors-- in Orange County. The district, held by Trump rubber stamp Ed Royce, will go blue in 2018 unless the DCCC manages to insert someone no one in the district can relate to, a DCCC specialty. Sam told us that Royce's "support of the Trump tax on our community shows he no longer represents us. He only represents out of district millionaires and whatever Trump wants him to do. This tax plan-- just on the elimination of the state and local tax deduction alone-- will raise taxes on 37% of families in the district. That doesn't include the roughly 80% of families who own a home and likely benefit from the mortgage interest deduction or the thousands who save for retirement through 401(k)s. A lot of us have known for a long time that Ed no longer fits our community, but it is shocking that he is helping push a tax plan that directly penalizes families in our community to benefit out of district millionaires."

And all the California progressives are taking a similar approach. Katie Hill is running for a seat north of Sam's district (CA-25) that includes 3 valleys (Simi, Antelope and Santa Clarita) and is increasingly blue while still held by a Republican-- thanks again, DCCC-- Steve Knight. Like Sam, Katie is outraged that her congressman appears to think he represents Trump, Ryan and the GOP rather than the people who live in CA-25. "Steve Knight and the House Republicans," she told us, "are fighting for a policy that is so blatantly harmful that even the Trump administration is against it. I am running for Congress because I think my family, neighbors, friends, and community deserve a representative who will fight for them. Steve Knight's support of the Republican tax plan is proof that he has no intention of being that Representative. While I'm sure Steve's wealthy establishment donors are thrilled by his vote, the residents of the 25th district are outraged and will make their voices heard in November."

Katie Porter is also working to represent an Orange County congressional district that Hillary won. "Mimi Walters," she told us, referring to the rubber stamp Republican who holds the seat now, "continues to do what she has done her whole career-- ignore the needs of middle class families here in Orange County to give handouts to corporations. Mimi Walters never fights for middle class families. She sided with Donald Trump over Californians 99% of the time. She sided with powerful drug and insurance companies over California families when she voted to repeal the Affordable Care Act. She sided with the NRA over the safety of our communities when she refused to regulate bump stocks or vote for simple background checks. And now she’s siding with Paul Ryan’s tax plan, which guts 1.8 trillion from Medicaid and Medicare, limits what people save from their own earnings in 401(k) plans, and eliminates state and local deductions for over 6 million California families."

There is no presidential election in 2018. Randy Bryce's campaign to repeal and replace Paul Ryan in Wisconsin is the substitute for that. Yesterday he reminded us that "There used to be this thing called a 'pension.' It was something  brought about thanks to unions where you could put money aside while you donated the best years of your life in order to enjoy a time to sit back and be able to enjoy the fruits of your labor.Thanks to this war on workers that has been  brought upon us by the Banana Republicans, pensions are very rare these days. Instead, 401(k)s have been put in place. Now even these are under attack. It is quite obvious that the GOP is determined to make all of us not within the top 1% need to work until we literally drop dead. As Americans it is our duty to fight to make sure that democracy consist of one person equals one vote, not one dollar equals one vote. We have some time, but not a lot.2018 is one year away. Our futures are worth fighting for."

Three of the most likely Republican-held districts in Texas to flip next year are John Culberson's in Houston, Pete Sessions' in Dallas and the Austin-San Antonio corridor district held by Lamar Smith. All 3 have hotly-contested primaries. We spoke with the best candidates in each. Lillian Salerno, a former Obama Agriculture Department under secretary who made a name for herself as an anti-trust advocate, told us that "This tax bill demonstrates the control corporate monopolies who boss around bagmen like Pete Sessions have over Congress. Just so they can have a tax cut, the monopolies want workers, small business owners, and independent family farmers to to pay more, work longer, and take more risk all for an ever-dwindling chance at retirement. Independent retailers and independent manufacturers are already feeling the squeeze from big tech controlling the marketplace. Small business owners and workers are wondering the same thing: how will they be able to retire when they don't even have a plan for mom and dad? This tax hike on the middle class will end up with more corporate concentration, less competition, less innovation, and more profits in the hands of the monopolies. Every day we see what happens when folks with the power control elected officials officials like Pete Sessions.   Shameful behavior by those unelected  power brokers who navigate the system through t bagmen like  Pete Sessions absent  any regard for  working families."

Over in Houston, Jason Westin hasn't had any government experience. Instead he's been working as an award-winning cancer doctor and researcher. But healthcare isn't the only reason he's running. He told us that " Culberson has been in office for nine terms, and it shows. The career politicians in Washington have become complacent to the concerns of their constituents, seen in the 'Cut Cut Cut' tax bill coming this week. This bill favors the wealthy donor class over the working family. Culberson has long sought to remove the estate tax, which only impacts the 0.02% wealthiest Americans with estates worth at least $5.6 Million and would increase the deficit by $270 Billion over a decade. The final details aren't clear, but it also appears the bill will dramatically shrink Americans' ability to save for their retirement with pre-tax dollars. How do these help moves help you? They don't. Culberson and his pals are passing a tax bill which will give huge breaks to the Billionaire-class Americans, and will leave the rest of us behind."

We reached Derrick Crow in Austin. He started with a rhetorical question. "Does anyone on the Republican side even pretend to care what happens to working families in this country? Lamar Smith and his allies want to give corporations tax cuts at a time when companies are hiding trillions of dollars in profits in offshore tax shelters. They want to repeal taxes on estates of more than $5.49 million or more. And they want to pay for all of this by taxing individual retirement accounts and slashing Social Security and Medicare. In other words, corporations and the one percent loot the treasury while the rest of us get the bill. How about this: how about Congress starts focusing on the real, central problem in this economy, which is that people who work the hardest for wages don't have enough money to get by. The bottom 50 percent in this country own 2 percent of the wealth, which is to say, they own nothing. We need to raise the minimum wage, provide health care and higher education as rights, and get government back on the side of the working class instead of the monopolists and the corporate bosses."

Dan Canon, who's running for a seat in south central Indiana, made similar points more tersely: "Many of our representatives, like the one currently occupying my district, bought their seats in Congress. They exist to serve the rich at the expense of the working class. Nowhere is this made more plain than in this GOP tax 'plan.' They're not even really trying to hide behind the great lie of 'trickle down' economics anymore. This scheme would pick clean the ever-shrinking carcass of the middle class, while ensuring that the top 1% stay infinitely wealthy for infinite generations. It isn't clear whether Trump's GOP merely wants a return to Dickensian England or something even worse, but it is quite clear that they are a party exclusively by and for the wealthy."

Austin Frerick, comes from a similar anti-monopoly perspective that Salerno espouses. He's running in the southwest Iowa district that stretches from Des Moines to the Nebraska border. "David Young," he told us, "is trying to deliver what his donors bought with this 1% tax cut on the backs of hard working Americans. The repeal of the estate tax especially irks me. Young says he wants to repeal it to help farmers. That's just a lie. He's doing it to save the Koch Brothers billions. Only 44 Iowans even paid the tax in 2016. This is just another example of David Young twisting reality for the 1%."

Jenny Marshall, a North Carolina public school teacher is taking on multimillionaire Republican, Virginia Foxx in a central Piedmont district (NC-05). "For far too long, Republicans like Rep. Virginia Foxx have been pushing trickle-down economics as a solution for working Americans," she said. "Donald Trump’s plans for a stripped-down budget are a result of these faulty economics and Foxx has been a giddy cheerleader for its passing. In her speech from the House floor, she claims that this tax plan will 'level the playing field,' but what she does not mention is the harm that will come from those who rely on 401(k) plans and itemized deductions of state and local income taxes. In addition, they will strip families of the personal exemption deduction in favor of tax cuts for large corporations. Under the leadership of Donald Trump and Virginia Foxx, working families will keep waiting for a 'level playing field' that will never come. I am demanding a fair economic system for the people, not for the wealthy elite."

Up in central Illinois, emergency room doctor, David Gill, comes from a similar place. "My Republican opponent, Rodney Davis," he said, "has repeatedly demonstrated his lack of concern for the ordinary citizens that live here in IL-13-- maybe he's forgotten that he became an 'accidental Congressman' back in 2012 through sheer luck, when a liberal independent split the progressive vote just enough to keep me out of Washington by a slim 0.3%. His votes in Congress have been a slap in the face to the hard-working individuals who live here. This tax reform bill that he supports will reward the ultra-wealthy and the corporations that fund his campaign, and it will bring true hardship to the vast majority of IL-13 citizens. Supporting the elimination of the federal tax deduction for state and local taxes for individuals shows, once again, that Davis is completely out of touch with the residents of his district. He was able to get away with such heartless votes the past few years, when he faced only token and conservative Democratic opposition. But after spending the past couple cycles on the sidelines, working in the Emergency Room and serving as the Assistant Director of the Illinois Department of Public Health, I'm now running in IL-13 once more, and my boldly progressive campaign is shining an very bright light on Davis' performance. Voters from across the political spectrum are completely disgusted with 'swamp critters' like Mr. Davis; as I travel around the district, they are chomping at the bit, eager for the opportunity to end his political career in November 2018."

Michael Kotick is one of half a dozen serious Orange County candidates competing for the Democratic nomination to run against Putin's favorite congressman, Dana Rohrabacher. Michael, at 34, is also the youngest-- and a can-do, out-of-the-box problem solver from a business background. "If Rohrabacher votes for this bill, as proposed," he told us, "he will effectively be voting against Orange County residents keeping their hard-earned money (SALT), blocking the retirement savings pathway for millions (401k) and potentially kicking-off a snowball effect that will impact the property values of those in California, long-term. All of which goes almost perfectly against every anticipated benefit of a 'tax cut initiative,' except if you are in the top 0.2%. Let's just say that this tax plan is going to impact a lot of people, dramatically. If passed as proposed, it may be the single greatest action (besides #45) to help flip House seats in California from red to blue. If the tax cut is paid for as proposed by the 2018 House budget-- with more than a trillion dollars in cuts from healthcare, education and affordable housing- that just rubs salt in the wound. By voting 'yes' on this budget with the hope of a tax plan that looks lopsided and shaky at best, Dana is directly voting against all of us in Orange County. Time's up, Dana."

Kara Eastman is the most recent candidate Blue America has in our vetting process. She's running for the Nebraska Democratic nomination to take on Republican freshman Don Bacon who beat serial party-switcher and anti-choice far right Blue Dog Brad Ashford. Before Kara gets too run, she has to take on.. yep, Ashford again. (He lost his job in Omaha and figured he might as well run again. Needless to say the Blue Dogs and DCCC are encouraging him.) Kara told us that "While the GOP debates whether or not to lower the tax rate for the top 1% of earners in the United States and whether or not to limit the ability of the middle class to save for retirement in our 401(k) plans, they also are crafting legislation that will see more people lose their health insurance.This kind of sabotage doesn’t help Americans who have the right to quality and affordable health care. It’s also unacceptable that this Congress let the Children’s Health Insurance Program (CHIP) expire a month ago. So it’s time for our leaders to prioritize our nation’s children and reform our health care system for the better. Instead, too many of them stand ready to subtly sabotage it and focus legislative efforts on benefiting the wealthiest people in our country who can afford to weather this storm."

This meme has been floating around the Internet for the last week or so. People seem agitated, surly and mistrustful of what Trump and Ryan are cooking up in the tax package.

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At 4:01 PM, Anonymous Anonymous said...

A lesson in proper negotiating? Obamanation started by giving the other side more than they ever wanted.

This is how to do it. Ask for far more than you'll get and meet in the middle.

note: democraps were so awful 2009-2017 that they are now irrelevant. So negotiation is not required.

"...It's outrageous and immoral, and voters will hold them accountable for it."

Wanna bet? Since when have voters held anyone accountable for anything? (answer: about 1979; not since).

At 8:03 PM, Anonymous Anonymous said...

the losses to the treasury will be borrowed from the Chinese, Indians and Saudis... to be repaid later by the lower 99%. And if at the time of the crash the many tens of trillions in debt is defaulted, the world economy will NEVER recover.

But the billionaires will make it just fine.

At 7:47 AM, Anonymous Anonymous said...

I'm just glad I have a paid-off house to leave to my kids, for they will at least have a place to live as the gig economy greatly reduces their prospects for gainful employment.

At 11:46 AM, Anonymous Anonymous said...

7:47, if your kids need to borrow to go to college, they're just as ratfucked as if they needed to borrow to buy a house. That deduction goes away too.

Then there's the gashes to Medicaid and medicare, likely dooming them both to status of historical footnote. So they better make enough to be gouged by health insurance AND never get sick or hurt.


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