THE WASHINGTON POST...We award Four Pinocchios.
No, the House GOP tax plan isn’t ‘so bad’ for rich people
President Trump made a personal appeal from an ocean away to ask moderate Senate Democrats to support the Republican tax plan. Calling National Economic Council Director Gary Cohn, who was in a meeting with the Democrats, Trump reportedly said, “The deal is so bad for rich people, I had to throw in the estate tax just to give them something.”
Both the nonpartisan Joint Committee on Taxation (JCT) and the Tax Policy Center (TPC) have published analyses of the tax cut. TPC shows that by 2027 tax payers with incomes of $5 million and above would experience the biggest percentage change in after-tax income and in the average tax rate. The JCT analysis shows how taxpayers with incomes over $1 million would see their tax cuts grow over the course of the tax bill, from 2019 to 2027.
Here are a few specifics: the House bill repeals the Alternative Minimum Tax (AMT), changes the tax rate for pass-through entities and as Trump said, repeals the estate tax. The specifics of each of these changes benefit the rich and uber-rich. The estate-tax provision is even more generous than Trump’s own campaign plan, as the Fact Checker reported.
Contrary to the president’s claim, the tax plan is not “so bad” for the wealthy. In fact, no matter how you slice it, the super-wealthy do rather well under the House GOP proposal. But as we have said, that’s largely because they already pay a large chunk of income taxes already. We award Four Pinocchios.
PostEverything • Perspective
I’m a Depression historian. The GOP tax bill is straight out of 1929.
Republicans are again sprinting toward an economic cliff.
By Robert S. McElvaine •
Just how disastrous would the proposed reincarnation of the failed Republican trickle-down policies of the past be for the American people and the future of the nation? A few ways:
Repealing the estate tax, or, as Republicans have dubbed it, the “death tax.” But the estate tax is not a tax on the dead; it is a tax on their heirs. Repeal would reverse an important aspect of the American Revolution and establish an American hereditary aristocracy. If your estate is not above $11 million, your benefits from this portion of the GOP’s tax cut will be a nice round number: zero.
Eliminating deductions for state and local taxes. The GOP has called these deductions favoritism for people who live in high-tax states. In fact, ending deductibility of state and local taxes would tax income that has already been taxed away from a taxpayer. It is, quite simply, double taxation.
Repealing the Alternative Minimum Tax, which assures that wealthy people who hire accountants to find all the obscure ways to avoid taxes cannot escape taxation altogether. Repealing it would save Trump millions.
Extending the “pass-through” provision to noncorporate businesses, including some 500 entities Trump owns. It would allow the owners of these businesses to pay taxes at 25 percent, instead of 39.9 percent. This provision would allow Wall Street fund managers, among other very wealthy people, to pay a lower tax rate than many middle-class Americans pay.
Ending the deductibility of large medical expenses.
Taxing waived tuition for college students, ending deductibility for student loan payments, and even disallowing teachers from deducting what they spend on school supplies for their students.
Ending the Affordable Care Act’s individual mandate, which would cause 13 million Americans to lose health insurance and result in much higher premiums for those who do get insurance through the exchanges. The Congressional Budget Office has indicated that, if enacted, the Republican tax bill may force deep cuts in Medicare through a generally unknown budget rule that its deficits would trigger.
The analysis of the nonpartisan Congressional Budget Office found that people making less than $100,000 a year (approximately 80 percent of American households) will have their taxes increased while the millionaires and billionaires will make off like bandits.
In the 1920s, Republicans were in full control of the federal government and used that power to pursue their objective to “make the well-to-do prosperous.” It didn’t “leak through on those below.” In that decade, the mass-production American economy became dependent on mass consumption. For it to work, the masses need a sufficient share of the national income to be able to consume what is being produced.
Republican policies in the ’20s instead pushed to concentrate more of the income at the top. Nine decades later, Republicans are rushing to do it again — and they are sprinting toward an economic cliff. Another round of Government of the People, by the Republicans, for the super-rich will be catastrophic. The American people must call a halt before it’s too late.