Wednesday, April 26, 2017

Trump's Dramatic Tax Overhaul Calls For...

NOTE:  Revised to add points VII and VIII below.

Calls for what?  Those are the first words of the Washington Post story about the pathetic one page "tax plan" released by the Trump administration today.  Before even looking at the actual contents of that page, I would like to write the first sentence of what would have been my strictly neutral report on this earth-shaking event:

"Trump reveals intent to ram through the same massive tax cuts for the rich that Republicans have been pushing for a century, larded with the bare minimum of supposed cuts for everyone else- cuts that will miraculously largely disappear before the bill is enacted- to delude his greed-maddened, stupid supporters into destroying their children's future for a few bucks thrown their way."

Okay, now we have the pre-written view from both sides.  Let's look at Trump's proposal and see who is closer to the truth.

I.  Cutting the top corporate tax rate from 35% to 15%- that is to say, an approximate 56% cut in the taxes that large corporations pay.

II.  Doing away with the estate tax, i.e. in Republican scary-land, the "death tax."  In the last year for which I remember the numbers, this tax was levied on 1600 families, with an average net worth of over $16,000,000 dollars.  The main beneficiaries will be the Walton family, who have been the main donors to the campaign to eliminate the estate tax for years, and who as a family will see a $20 billion dollar windfall from this plan.  We'll soon be hearing the stories about the family farms crushed out of existence by the estate tax, a perennial feature of attacks on it, despite the fact that no one has ever been able to find a single family farm that had to be sold because of this tax.  

III.  Eliminating the Federal deduction for State and local taxes paid.  This will cost most working Americans thousands, while being an absolutely insignificant burden on the rich, who make a very small amount of their income through wages.

IV. " It would eliminate the seven existing income tax brackets and replace them with three brackets, containing new rates of 10 percent, 25 percent and 35 percent, based on someone’s income. White House officials haven’t specified which income levels would hit the higher tax brackets, as they see that as part of ongoing discussions with Capitol Hill."

Ongoing discussions to calculate what the minimum amount of crumbs they need to throw to their voters, to get them to go along with their own long-term rape.  My guess?  Next to nothing.  I think, based on a lifetime observing this is that somewhere between $200 and $500 dollars will be enough to induce the average Republican voter to cut their own throats, yelling hoorah the whole time.*

V.  Eliminating practically all tax deductions.  Of course, since the vast bulk of money made by the rich comes from capital gains, this would not hurt them at all.  It would, however, shove the upper middle class one step backward on the economic ladder, a wonderful thing since so many of them are educated, and therefore tend to be liberals.

VI.  A one-time tax “holiday” to incentivize companies to bring several trillion dollars currently being held in other countries back into the United States

And if that weren't bad enough:

VII: Doing away with the "alternative minimum tax," a provision designed to prevent rich people from finding ways to pay no taxes at all.  The vast majority of taxes paid last year by Trump, for example, were owed under this provision.  Eliminating it would provide him with a yearly windfall in the tens of millions of dollars.

VIII:  Enacting the so-called "pass through" provision, allowing rich company owners to pay their personal taxes at the corporate rate of 15%, grossly lowering their tax payments, while benefiting no one else.

Rewarding the rich with trillions of dollar in tax relief, in return for their stab in the backs of all the rest of us, of course accompanied by the nonsense that these rich companies would turn right around and invest their money in creating American jobs they do not need, as opposed to having the companies' owners just pocket the proceeds.  The second possibility is, of course, the way this sort of thing has played out every time it was tried, throughout history, but this time it will be different, right?

Well, there you have it:  does it sound a little familiar to you?  It should if you follow politics, because every single one of these piggish acts of theft has been at the very top of the Republican economic agenda for a hundred years.  This is not old wine in new bottles; it is old poison in the same old bottles.  But then, what did you expect?

Here's how the Washington Post characterizes the Democratic response:

"Ahead of the announcement, some Democrats were skeptical. Senate Minority Leader Charles E. Schumer (D-N.Y.), said members of his party would scrutinize the details..."

That's nice, isn't it? See, everyone is ready to cooperate in passing this fair-minded, well-intentioned proposal.  Here, by the way, is what Schumer really said:

“That’s not tax reform,” Schumer said on the Senate floor. “That’s just a tax giveaway to the very, very wealthy that will explode the deficit.”

Skeptical.  Well, I guess you could say that.  So, here we go again.  The Republican party, as many of us have been pointing out for years, is nothing but a corrupt criminal conspiracy to benefit their massive campaign donors at the expense of everyone else.  This is as true today as it was thirty, or fifty, or a hundred years ago, and that is why their economic program has never budged from these few goals of the hyper-rich.  Trump is just providing new cover for the Ryans and McConnells of this world to achieve their life-long goals while setting up Trump to take the fall when it all goes disastrously wrong, as it has every time this sort of agenda has ever been tried.

So, I guess it's unfair to have one of the contestants doing the judging, but I'm awarding the trophy for Truth in Headlines to Green Eagle.  Any objections?

Update:  Robert Reich's description of this proposal:

"In reality, it’s the biggest declaration of class warfare – Trump’s and Mnuchin’s class against average Americans -- in history."

Well, the biggest declaration of class warfare since the last Republican tax "reform" bill- they basically all have the same things in them.

Update 2:  The Tax Policy Center estimates that this bill would net a person with a $50,000 income a whopping $350 in savings, much of which might be wiped out by other provisions in the plan; it would benefit the very highest earners hundreds of thousands or millions of dollars every year.  All of this raising the Federal debt, which Republicans claim to care about so much, by $7.2 trillion in the first decade, and by $20.9 trillion by the end of the second decade. I just want to say that my guess from yesterday of $200 to $500 as being the amount that Republicans would decide that it would take to buy off the suckers looks pretty good today.  They cynicism of all this is just astonishing.

*Well, at least until they actually cut their throats.  It's really hard to yell hoorah after your throat is cut.  

1 comment:

ez said...

Interesting short article on the so called "death tax", a historical back grounder from "The Economist" back in 2010...