Friday, November 3, 2017

The Middle Class Tax Cut: More Trickle-Down Mythology and Outright Lies from Trump and Ryan

Anyone who believes Donald Trump or Paul Ryan is genuinely interested in helping America's middle class needs to have his head and heart examined. Both of these "leaders" are terminally beholden to super-wealthy people and multinational corporations.
With an almost-straight face, Trump and Ryan are saying this week that their new tax legislation is all about the middle class. They say it would provide savings next year of $1,182 for a middle class family of four with a gross income of $59,000, leaving their tax bill at $400.
But look behind the curtain. Some middle class families will benefit, if briefly. But there all kinds of conflicting and confounding changes in store for the tax code with this bill, whose elimination of key deductions, as well as fewer state and local tax options, will for many Americans negate whatever so-called benefit this bill brings to non-millionaires and non-billionaires.
Want to put your kid in college? You lose some interest deduction benefits for student loan interest payments. Got medical bills? You lose a deduction benefit for that, as well. Got a mortgage payment? There's a deduction cut for that, too.
And this plan even abolishes deductions for state and local taxes, which will further hammer millions of Americans. That's another non-starter.
Interestingly, the folks in the upper-middle class will take the biggest hit of all. According to the Tax Policy Center, about 60 percent of American families with a household income of $150,00 to $300,000 annually the low end of that would be my family and perhaps yours -- will see their taxes rise over the next decade by $4,000.
These are facts the Republicans don't want you to know. That's why they're unconscionably rushing this bill through, with no hearings and few markups and no real online information resources that would reveal what they're really trying to do here.
This tax plan would also cap the mortgage-interest deduction on new home sales at $500,000. The current cap is $1 million for couples filing jointly. For those of you who have purchased or plan to purchase a new and pricey house, you're out of luck with this bill.
The National Association of Realtors said this tax plan “appears to confirm many of our biggest concerns.”
A family that makes $50,000 total in the household gets a tiny cut, but as I said, if they want to send a kid to college or pay medical expenses, this bill leaves them out in the cold.
This tax plan will, of course, drastically cut healthcare subsidies, Medicare and Social Security, and the middle class will continue to decline. This plan will in fact increase the number of Americans who are struggling financially.
Tellingly, the $1.5 trillion tax break for the wealthy and international corporations in this plan is almost the exact same amount as the looming and inhumane cuts to Medicare and Social Security and, too, almost the exact same amount that it will add to the deficit.
And with this plan, anyone who lives past 65 and needs Medicare loses. Bigly.
The Sacramento Bee reports that Republicans "went gangbusters to help corporations and the wealthy" then scrambled to add changes here and there "so they could say they’re actually helping the middle class."
Jacob Leibenluft of the Center on Budget and Policy Priorities, said today, “They started with a set of big tax cuts they want to give, and those tax cuts are overwhelmingly weighted toward the wealthy. And then I think the rest of the bill is designed to solve a math problem as well as a political problem.”
According to the Tax Policy Center, the bottom 95 percent of Americans get just a 1.2 percent bump in incomes or smaller with this plan, and that bump is eliminated for many because of fewer deductions as I mentioned above. 
Meanwhile, the top 1 percent, which is the folks making over $730,000, get an 8.5 percent increase in income.
The TPC notes that under this plan, corporations get a $2.6 trillion cut over the next decade, while households get a $470 billion increase.
Yes, increase. Households of all incomes, including the middle class, will see their taxes go up substantially over the next decade.
This bill will help some in the middle class, but it is a very thinly disguised, multi-trillion dollar giveaway to the richest Americans and largest global corporations that won't create jobs and offers tiny and largely bogus gifts to some working folks as a distraction. Basically to keep them quiet.
And this bill is an unprecedented abandonment of our inner cities. It cuts all kinds of tax incentives to urban areas. And it isn't friendly to small business, either. Just the multinationals.
The president of a national small-business group said today that this tax plan is a disaster that “leaves too many small businesses behind” with a tax cut for partnerships, limited liability companies and other so-called “pass-throughs” that “does not help small businesses.”
The National Federation of Independent Business can not and will not support the bill “in its current form,” said NFIB President Juanita Duggan.
Clark Gasciogne, deputy director of the Financial Accountability and Corporate Transparency (FACT) Coalition, said this week that the bill is a gift to the multinational companies that have dodged taxes for years by offshoring profits and jobs.
"It rewards those corporations that have booked trillions of dollars overseas with a special 12 percent tax rate on their past offshore profits," he explained, "Worse, the bill grants an even lower rate — a mere 5 percent rate — for the companies that have outsourced real investments abroad. There is no economic justification for a lower rate on profits already made."
He added, "The proposal permanently gives multinational corporations a tax rate that is, at most, half the rate for small and domestic businesses. Many multinationals will be able to pay zero percent on their profits booked offshore."
The lower offshore rate will only incentivize the mega-corporations to move more jobs to other countries, which is no surprise. This is something Trump has done his entire career. He has never cared about employing American workers. Until he announced he was running for president.
Then he suddenly became a homer. But this bill shows that he hasn't changed a bit. He still cares only about making life easier for companies who want to take their jobs out of America to countries with cheaper labor. Trump doesn't give a damn about the American worker. He never has. He is a habitual outsourcer, always looking for the cheapest labor. American workers have never of particular concern to Trump, until it became politically expedient. He is a classic fake patriot.
If his bill passes, taxes will rise for many middle class earners over time. And economists I've spoken with today tell me that for many Americans, the income gains being boasted by Trump are very unlikely to ever materialize.
Like the various healthcare bills Trump and Ryan have tried to pass, this alleged effort to support the middle class is laughable. And cruel. And, like each of the healthcare bills that thankfully failed, this plan hurts working people most in the red states that voted for Trump.
Why on earth would it come as a surprise for anyone to learn that the wealthiest Americans and the multinational corporations are the big winners here and the regular folks are once again getting thrown under the bus. 
But as Americans learn more about this bill, it will make it a lot harder for Republicans to sell this to the middle class. This bill will be very harmful to many small businesses and most middle-class taxpayers, creating larger deficits and leading to more cuts to services they use.
"While we appreciate some of the base erosion in the bill," Gasciogne said this week, "they won;t fix the problem. In closing one offshore loophole, the bill has opened up another, offsetting any potential benefits to stop the gaming of the tax code."
This legislation is simply out of step with the American people, he said, "who overwhelmingly believe that multinational corporations should pay the same rate, if not more, on the profits they book overseas as they do on their profits earned at home.”
This is just more trickle-down mythology from the GOP, who have never been a friend to the middle class. Ever. This plan represents huge cuts for corporations and the richest Americans, and will not trickle down.
It doesn't work. A tax cut for the top 1 percent isn't what this country needs the most. Not by a long shot.
As Market Watch reports, nearly half of Americans owe no federal income tax at all, but they do pay taxes: payroll taxes to fund Social Security and Medicare, tariffs, excise taxes, corporate taxes, property taxes, sales taxes, state and local income taxes, and so on.
"In real America — outside the closed doors on Capitol Hill and at corporate boardrooms — the most pressing issues are distrust in the government, racism, immigration, national unity, tensions with North Korea, health care, the economy and jobs, disaster relief, the environment and crime," Rex Nutting of Market Watch writes this week.
But in Washington, he adds, "Cutting taxes is the most important thing on the agenda. Why? Because the Republican Party apparently is a wholly owned subsidiary of large multinational corporations and the richest 0.1% of Americans."
Rex is right. This is not what this nation needs. We do not need a giant gift to the elites. It will not create jobs. It will just raise the deficit, make the rich richer and the fat cats fatter.

2 comments:

  1. I have been posting and arguing with Trump voters about trickle down economics but they are to stupid to see they are getting screwed. Maybe everyone should have to take economics in high school, but doubt these people have a high school diploma.

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  2. This is the biggest tax gift the the super-rich in American history, according to Fortune, which is not some left-wing rag: http://fortune.com/2017/11/03/trump-gop-tax-plan-cuts-2017/

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