Monthly Archives: September 2017

Trump’s Tax Policy Benefits The Uber-Rich Uberly

The killer chart: the top 1% would get 79.7% of all the tax cuts under the Trump plan. The top *0.1%* would get 39.6%.

From the Tax Policy Institute (emphases are mine)

The tax outline unveiled this week by President Trump and the congressional Republican leadership would reduce federal revenue by $2.4 trillion over the next decade, according to a new analysis by the Tax Policy Center. The plan would cut taxes for low- and middle-income households modestly, while focusing most of its benefits on the highest-income 1 percent.

President Trump has promoted the tax package, called the “Unified Framework for Fixing our Broken Tax Code,” as an historically large tax cut for the middle-class and a tax increase for the highest-income households. The reality, however, is quite the opposite.

In 2018, the framework would cut taxes for moderate-income households by an average of $660, or 1.2 percent of their after-tax income. By contrast, it would boost the after-tax incomes of the highest-income 1 percent by an average of $130,000, or more than 8 percent. The top 0.1 percent would get an average boost in after-tax income of $720,000 or 10.2 percent of their after-tax income.

The top 1 percent (those making $730,000 or more) would receive half of all the plan’s tax cuts while middle-income households (those making between about $50,000 and $90,000) would get only about 8 percent of the total benefit.

The disparity would grow over time. By 2027, the top 1 percent would get 80 percent of the plan’s tax cuts while the share for middle-income households would drop to about 5 percent. On average, taxes for the top 1 percent would fall by more than $200,000 or 8.7 percent of their after-tax incomes. The top 0.1 percent would do even better. They’d get an average tax cut of more than $1 million, a 9.7 percent boost in their after-tax incomes.

Overall, individual income taxes would increase under the framework while business taxes would decline, making this proposal a mirror image of the 1986 tax reform, which raised taxes on business to help finance tax cuts for individuals.

Very high income taxpayers would benefit primarily from the framework’s proposed cuts in corporate taxes and, especially, pass-through businesses. The Big Six would cut the corporate tax rate from 35 percent to 20 percent, and the tax rate on pass-throughs such as partnerships from 39.6 percent to 25 percent. The plan would also reduce individual income tax rates, repeal the Alternative Minimum Tax and the estate tax, and eliminate many itemized deductions.

But not everyone would win. In 2018, about one in seven middle income households would pay an average of $1,000 more in taxes under this plan. By 2027, more than one of every four middle-income families would pay more in taxes. Upper middle-income households, those making between $155,000 and $305,000, would receive small tax cuts in 2018 but see their taxes rise slightly in 2027, mostly due to the loss of itemized deductions such as those for state and local taxes. By 2027, half of that income group would be paying higher taxes.

The overall plan would reduce federal revenue by $2.4 trillion from 2018-2027 and by another $3.2 trillion over the following decade, according to the TPC analysis. But that assumes that Congress eliminates all itemized deductions except for mortgage interest and charitable giving, ends personal exemptions, repeals many business tax preferences, and changes the way it indexes the tax code so people pay higher taxes as their income increases with inflation.

To the degree that lawmakers succumb to political pressure to preserve those provisions, either the cost of the plan would rise or Congress would have to scrap some of its tax cuts.

In an era of rising populism, the Big Six’s tax framework is a major tax cut for businesses and the very highest income Americans and only a small tax cut for middle-income households. Seeking to balance the demands of their dueling business and working class constituencies, President Trump and the congressional Republican leadership have tilted heavily towards traditional GOP business interests.

A Scandal Too On-The-Nose

It’s hard to keep track of all the scandals plaguing the Trump Administration, any one of which would be a HUGE scandal in any other previous administration.  Right now, there is a lot of focus on HHS Secretary Tom Price, who has been using private jets and military aircraft to get from place to place — at taxpayer expense.  Price tried to get ahead of the scandal by saying that he would pay for “his seat” on those flights, which turned about to be literal.  He chartered entire planes, but agreed to pay only for “his seat”, which he calculated to be roughly $51,000.  When you add up all of the more than two dozen private and chartered jets Price has taken since May, the pricetag — ahem — is now north of $1 million taxpayer dollars, according to calculations made by Politico.

Then there’s Scott Pruit, head of the EPA, also has been flying around in expensive planes on the taxpayer’s dime, and installing a $25,000 soundproof room in the EPA for unknown reasons.

Even those stories are being overshadowed by Trump’s failure to adequately respond to the hurricane damage in Puerto Rico (“Trump’s Katrina”), his race-based attacks on NFL protests, and his new tax plan (a gift to the rich).

So I’m not surprised — but still a little surprised — that more isn’t being made of the “private emails” scandal.  We just went through a presidential election where all anybody would talk about — on the right and in the media — was Hillary Clinton’s private emails and her private server.  Now, we learn that Jared and Ivanka Trump conducted official White House business from their own private server.

Then, as the NY Times reports:

But Mr. Kushner was not alone. Stephen K. Bannon, the former chief White House strategist, and Reince Priebus, the former chief of staff, also occasionally used private email addresses. Other advisers, including Gary D. Cohn and Stephen Miller, sent or received at least a few emails on personal accounts, officials said.

What the hell?

It is just so bizarre. These people are either incredibly corrupt or incredibly stupid and probably both.

Now it is quite possible that there was no classified material exchanged.  But it is a violation of the Presidential Records Act, something that these people themselves pointed out time and time again through their candidate during the campaign.  It’s astounding — simply astounding — that they would engage in the same activities (and so soon!) after hearing millions of their followers shout “LOCK HER UP” when Hillary did the same thing.

I know. Hypocrisy is the least of this administration’s wrongdoings.  But it amazes me anyway.

P.S. I forgot to mention other Clinton-esque scandals like Foundation donations, pay-for-play, etc