Last week the Trump administration and its congressional allies working on tax reform achieved something remarkable. They released a tax plan — or, actually, a vague sketch of a plan — that manages both to add trillions to the deficit and to raise taxes on a large fraction of the population.
.. The road to this tax-cut turkey began in 2010, when Paul Ryan — now speaker of the House — unveiled the first of a series of much-hyped budget plans, all purporting to offer a blueprint for eliminating the U.S. budget deficit.
In fact, they did no such thing. They proposed major tax cuts — primarily benefiting the rich, of course — then simply asserted that no revenue would be lost, because reduced tax rates would be offset by closing loopholes and eliminating deductions. Which loopholes and deductions? Ryan didn’t say.
.. In other words, it was all a con.
.. Professional “centrists,” whose whole identity is bound up with pretending that there is equivalence between the two parties, desperately wanted a Serious, Honest Conservative to praise. So did much of the news media. So they slotted Ryan into that role, never mind the actual content of his policies.
.. After all, their supposed concern about federal debt was always just a pose, applying only when a Democrat was president.
.. But after all those years of pretending to be deficit hawks, they feel the need to be seen doing something to offset their high-income tax cuts, to close some loophole somewhere... According to the nonpartisan Tax Policy Center, their plan would give huge tax cuts to the top 1 percent, who would receive 79.7 percent of the benefits. But eliminating deductions would make many Americans, especially in the upper reaches of the middle class, directly worse off:Almost 60 percent of households between the 80th and 90th percentiles of the income distribution would face tax increases... How are the tax plan’s advocates responding to their very big, very bad problem? Partly with evasiveness: You can’t evaluate our plan yet, declared Mick Mulvaney,.. And partly with outright, ludicrous lies: “Wealthy Americans are not getting a tax cut,” declared Gary Cohn.. In broad outlines, the tax story is a lot like health care. In both cases, Republicans have spent years getting away with big promises backed by lies. Now, with real policy to be made, the lies won’t work anymore.
I live in a high-tax state and county, and my family earns enough income that I am fairly sure we would pay more federal tax under this plan. I would be fine with that if it were used to benefit those who have less than us. Pay teachers more, expand healthcare, create a bunch of jobs in places with few, whatever. I would pay a lot more to make our country a better place for everyone. Unfortunately, this plan would take those extra dollars and obscenely direct them to people who already have so much they could never spend it all. It’s unconscionable and shameful. Which is what we sadly have come to expect from the Republican party.
.. The basis of the Republican position on health care and taxes is “Trust me”. Well, based on experience we can’t and shouldn’t.
Given we have a “businessman” in the White House, if any group of executives proposed programs in the same vein as the Republicans have proposed healthcare and tax reform they would be fired. No board of Directors would accept business plans that are based on fictitious economic theory, increase debt to incalculable levels and hurt their core customers (constituents) where is really counts, in their pocketbooks
The top 1 percent seems a fair representation of the rich. This group — about 1.4 million taxpayers — reported adjusted gross incomes of over $466,000 in 2014, the most recent year for which the data is available.
.. The top 1 percent paid a total of $542.6 billion in federal tax, or an astounding 39.5 percent of the total income tax. If you want to take a more expansive view of rich, the top 10 percent (who earn upward of $133,000) pay 71 percent of the total tax.
Do they pay the top rate? Not by a long shot. The average rate for the top 1 percent is 27 percent of their adjusted gross income. (It’s even lower — 24 percent — for the superrich in the 0.001 percent bracket.) The top 10 percent pay an average of 21 percent.
.. The nonpartisan Congressional Budget Office estimated that the 10 largest tax expenditures (its term for what most people consider tax breaks) would amount to $12 trillion, or 5.4 percent of gross domestic product, over the decade from 2014 to 2023.
.. The top 1 percent gave $77 billion in 2014, 37 percent of total charitable contribution deductions
.. Why should capital income be taxed at a much lower rate than ordinary income? Capital assets are owned overwhelmingly by the rich. The top 1 percent reported $561 billion in capital gains taxed at the preferential rate, or 68 percent of the total. As a simple matter of math, the rich will never pay anything close to the top statutory rate as long so much of their income is taxed at a much lower rate (currently 20 percent for the top bracket, not counting the Affordable Care Act surcharge of 3.8 percent).
.. This path would require Republicans to set aside a long-held belief that lower capital-gains rates promote more economic growth and investment