The Appalling Details Of Trump’s New Tax Plan Just Leaked
If you believe Donald Trump his new tax plan, part of which was revealed today, will bring a “middle-class miracle once again” and mostly benefits “middle-class Americans.” and will not benefit high-income earners like himself.
If you believe that then you must also still believe there is a Santa Claus, angels watch over you, there are fairies and Peter Pan is a real boy.
“If this framework is all about the middle class, then Trump Tower is middle-class housing,” Oregon Democratic Senator Ron Wyden said in a statement. “It violates Trump’s tax pledge that the rich would not gain at all under his plan by offering sweetheart deals for powerful CEO’s, giveaways for campaign coffers and a new way to cheat taxes for Mar-a-Lago’s loyal members.”
Once again, as he has during his campaign and since, Trump is packing his plans as a boon for working people and the middle class while delivering benefits to the ultra-rich and large corporations that truly would be historic in terms of how much they give away.
The first thing you need to understand about the Trump/Republican tax plan is that they’re lying about it.
— Tom Steyer (@TomSteyer) September 27, 2017
While the plan simplifies taxes and raises the personal deduction, it also raises the lowest tax rate from ten to twelve percent, but that is chicken feed.
The big money is in the change in the corporate tax rate from about 39 percent to 20 percent, a change in the system so a lot of overseas corporate profits are no longer taxed at all, and the tax “pass through,” used by about 95 percent of all businesses, would see the rules simplified and the rate cut to 25 percent.
— Justin Miller (@justinjm1) September 27, 2017
Corporations will also get a one-time tax holiday of sorts to encourage them to bring trillions in profits they have kept offshore back to the U.S. at a low rate.
“Perhaps the most major yet murky shift on the business side is the move from a worldwide tax system to a territorial tax system,”reports the New York Times. “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 at a rate that has yet to be determined.’
Think of it as the Peter Pan rate, because it will make the greedy boys in the C-suite so happy they will think they can fly.
— Slate (@Slate) September 27, 2017
Senate Minority Leader Chuck Schumer said the Trump tax plan is an “across-the-board tax cut for America’s millionaires and billionaires.”
While middle-class taxpayers will likely lose the ability to deduct a home office, medical and prescription costs, job-related expenses (like a policeman’s uniform, for instance, or a teacher paying for school supplies) and deductions for the state and local taxes they pay, the rich get a basket full of breaks that will save them trillions – not just billions – in coming years.
A huge break for the rich will be the elimination of the estate tax, which Republicans like to call the “Death Tax,” because they think it is so unfair and claim it forces the breakup of businesses.
The fact is the tax only affects those with estates valued at over $5.5 million, and at that level, most are corporations that have lots of other ways to find financing.
Senator Bernie Sanders has declared that it is “particularly obscene to repeal the estate tax that would provide a $269 billion tax break to the top 0.2 percent.”
That is not the top one percent Sanders is talking about, but the top 20 percent of the top one percent who make the most money at a time wages for working-class Americans remain stagnant.
The reality is most of these so-called family-owned companies are sole proprietorships, LLC’s, and partnerships, whose profits currently pass through to the owners and are then taxed at the personal tax rate.
Under Trump’s plan, those pass-throughs would all be taxed at 25 percent, which is going to be lower than it is now. Under the Trump plan, it will be left up to the Republican-controlled Congress to find ways to ensure rich people don’t abuse this benefit.
Once again, Trump is counting on Santa Claus to ensure rich people don’t cheat.
Trump's tax plan helps large profitable corporations and millionaires, shortchanges lower income workers and the middle class. A cruel joke.
— Kirsten Gillibrand (@SenGillibrand) September 27, 2017
The biggest lie is that Trump says the enormous cost of his tax cuts, in the trillions, will be offset by the growth of jobs and companies who will benefit.
Trump and his Treasury Secretary Steven Mnuchin have estimated this tax plan will get the economy growing at a rate of about four percent a year, which would be more than twice what it has grown even in the best years over recent decades.
Again, to reach four percent will require fairy dust, which apparently only Trump has (yuck, yuck).
The Republicans said the same thing going back to the Reagan and Bush eras, and again and again, it has proven false. Giving rich people more doesn’t mean more jobs, it just means the rich get better homes, cars, vacations and more power.
“Trump and House Republicans are therefore taking a page out of an old playbook: claiming that tax cuts will trickle down to working families in the form of stronger economic growth,” writes American Progress. “But recent history and an abundance of economic research show that trickle-down tax cuts don’t create growth or jobs; they lead only to a widening inequaliity between the top one percent of income earners and everyone else.”
The real cost of Trump’s plan can’t yet be calculated because there are so many loose ends. However, independent groups have already started doing some basic calculations.
The Senate Budget Committee has agreed that they are prepared to allow a $1.5 trillion tax cut over ten years. Trump’s own experts have projected the cost at $3 trillion to $7 trillion over a decade.
The nonpartisan Committee for a Responsible Federal budget is estimating the cost over a decade will be at least $2.2 trillion.
Critics charge that the loss of revenue will be so great that it will result in Republicans demanding money from the Social Security fund or other programs that help people and not companies.
This article is not a comprehensive look at Trump’s tax plan, but it is an attempt to make clear that once again the president is misleading the American people about who will benefit most from this plan, and it is not the middle class or the working poor.
While some taxpayers will save dollars, the rich stand to reap billions of dollars from these breaks, and big companies who already don’t pay their fair share (by using tax loopholes) will get even richer.
There is a reason the stock market shot up when this tax plan was announced and it is not that Joe the Plumber is going to do so well. It is because the super rich, global companies that already dominate, that already charge what they want, that already gouge consumers can go right on paying their CEO’s a thousand times more than the average worker.
Trump and the Republicans lied about health care, lied about reining in Wall Street, lied about lowering prescription drug costs and now they are lying about the impact of what would be the biggest tax system overhaul in decades.