GOP Tax Cut Plan for the Rich

 

President Trump went to Indiana to pitch his latest tax proposal in front of a small crowd gathered at the State Fairgrounds. Most people weren’t fooled by Trump’s lies about the plan, with many news organizations, including The New York Times, Washington Post, and the Wall Street Journal calling the plan out for what it is: a tax cut for the wealthy. Yet, it seems important to highlight the most egregious of his statements.

 

CLAIM: “I’m doing the right thing and it’s not good for me, believe me.”
REALITY: The estate tax only applies to married couples worth more than $11 million, so it doesn’t have any impact on most small businesses or farmers. A study conducted last year by the Economic Research Service at the Department of Agriculture found that only 0.42 percent of operating farms would actually owe an estate tax. Who would face the estate tax? Trump’s own family.

 

CLAIM: “Today, our total business tax rate is 60 percent higher than our average foreign competitor in the developed world.”
REALITY: While the top corporate tax rate in the U.S. is one of the highest among major economies, this is only true on paper. In practice, U.S. companies end up paying far less than the listed rate due to deductions and credits lowering the business’ tax liability. Therefore, the effective tax rate—or what corporations actually pay—is roughly in line with comparable countries’ rates.

CLAIM: “And for the millions of small businesses and farms that file their taxes as sole proprietors, S corporations or partnerships, we will cap the tax rate they pay at 25 percent — much lower.”
REALITY: Here, Trump is referring to pass-through businesses, or businesses that don’t pay the corporate income tax and instead include business income on the personal income tax return of the business owner. Most pass-through business income actually goes to millionaires and big businesses. In fact, the Trump Organization is a pass-through business, and therefore would see its rate lowered from 39.6 percent to 25 percent.

 

CLAIM: “Ronald Reagan used [tax cuts] to create an economic boom in the 1980s.”
REALITY: Let’s all say it together one more time: trickle-down tax cuts don’t work to improve the lives of working families! In fact, they only “widen inequality between the top 1 percent of income earners and everyone else.”

 

CLAIM: “I’m doing the right thing and it’s not good for me, believe me.”
REALITY: Trump’s tax plan would be great for Trump and his wealthy friends. In addition to killing the estate tax, his plan also eliminates the alternative minimum tax, which “prevent[s] very wealthy Americans from using deductions and loopholes to skimp on their taxes.” This tax once cost Trump $31 million in taxes, which is probably why he’s so eager to see it disappear. And don’t forget that Trump’s proposal would decrease the top tax rate from 39.6 to 35 percent.

Posted In: Union Matters

Union Matters

An Invitation to Sunny Miami. What Could Be Bad?

Sam Pizzigati

Sam Pizzigati Editor, Too Much online magazine

If a billionaire “invites” you somewhere, you’d better go. Or be prepared to suffer the consequences. This past May, hedge fund kingpin Carl Icahn announced in a letter to his New York-based staff of about 50 that he would be moving his business operations to Florida. But the 83-year-old Icahn assured his staffers they had no reason to worry: “My employees have always been very important to the company, so I’d like to invite you all to join me in Miami.” Those who go south, his letter added, would get a $50,000 relocation benefit “once you have established your permanent residence in Florida.” Those who stay put, the letter continued, can file for state unemployment benefits, a $450 weekly maximum that “you can receive for a total of 26 weeks.” What about severance from Icahn Enterprises? The New York Post reported last week that the two dozen employees who have chosen not to uproot their families and follow Icahn to Florida “will be let go without any severance” when the billionaire shutters his New York offices this coming March. Bloomberg currently puts Carl Icahn’s net worth at $20.5 billion.

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Health Care Should Not Be A Bargaining Weapon

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