Let them eat more tax cuts
by Tom Sullivan
Jobs. There were going to be jobs. Lots of jobs. Good jobs that would put food on the table and pay the monthly bills.
Instead, the president proposes to let them eat tax cuts. He told an Indianapolis audience yesterday what they really want instead:
"Thank you very much. You just want massive tax cuts. That's what you want. That's the only reason you're going so wild."A couple of impressions of the chief executive's tax reform proposal:
“Republicans’ tax framework is not tax reform,” said House Minority Leader Nancy Pelosi (D-Calif.). “It is a framework that gives away the store to the wealthiest while sticking the middle class with the bill.”Perhaps "framework" is being too kind. Writing for Vox, Edward Kleinbard calls the plan, "a sketch of an outline of a preliminary notion of a tax cut for some — and a tax hike for others."
This much is clear: The tax “framework” published by Republican leaders on Wednesday would greatly increase the federal deficit, would not turbocharge economic growth and could leave many middle-class families worse off by ending deductions they rely on. It would do little or nothing to improve the lot of the working class, a group President Trump says he is fighting for. It would instead provide a windfall to hedge fund managers, corporate executives, real estate developers and other members of the 1 percent. And can it be just a happy coincidence that Mr. Trump and his family would benefit “bigly” from this plan?How very like Lord Mountebank.
Perhaps the most significant, yet murky, shift is the move from a worldwide tax system to a territorial tax system for multinational corporations. In theory, this means that companies would not be taxed on their overseas earnings. But to prevent erosion of the tax base, Republicans plan to impose some form of tax on foreign profits. The transition to the new system would also include a one-time repatriation tax at yet-to-be-determined rates to encourage companies to bring offshore profits back home.The chance for major corporations to bring home (at a steep tax discount) untaxed profits held offshore will be spun, as George W. Bush sold it, as a boon to job creation and reinvestment in the economy. It was neither. But the "one-time" American Jobs Creation Act of 2004 did provide one of the best quotes of the new century from a former Bush economic advisor:
"There will be some stimulative effect because it pumps money into the economy," said Phillip L. Swagel, a former chief of staff on President Bush's Council of Economic Advisers, which had opposed the tax holiday. "But you might as well have taken a helicopter over 90210 [Beverly Hills] and pushed the money out the door. That would have stimulated the economy as well."In Indianapolis last night, "the greatest jobs president that God ever created" described another way his plan would benefit common folk. He told his audience, “To protect millions of small businesses and the American farmer, we are finally ending the crushing, the horrible, the unfair estate tax, or as it is often referred to, the death tax.” The Post's fact checker called that statement "absurd":
According to the nonpartisan Tax Policy Center, only about 5,500 estates in 2017 — out of nearly 3 million estates — would have to pay any taxes. About half of estates subject to the tax would pay an average tax of about 9 percent. That’s because for a married couple, about $11 million is exempt from taxation.They may not be able to pay their monthly bills or put food on the table, but struggling Americans can take comfort in knowing that, in one nation under Don, after loved ones die, their meager inheritances that wouldn't be taxed before won't be taxed in the future.
Only 80 — that’s right, 80 — of taxable estates would be farms and small businesses.