I have never heard someone say, “I would have started a company, but tax rates were too high” or “I wouldn’t have started this company, but then George W. Bush cut tax rates, so I did.”
.. While I can imagine tax regimes that would create disincentives for entrepreneurship, we don’t have that situation today in America, where tax rates on capital gains (the primary way that founders of successful start-ups make money) are already far lower than rates on ordinary income. Indeed, some of the most admired entrepreneurs — Bill Gates, Steve Jobs, Jeff Bezos — started their companies under significantly higher tax regimes.
.. As Warren Buffett notes, “I have yet to see” anyone “shy away from a sensible investment because of the tax rate on the potential gain.”
.. My team and I are already intensely motivated to expand the company we manage, and lowering the corporate tax rate isn’t going to make us create jobs any faster.
.. What a tax cut would do is increase our post-tax profitability, which effectively transfers money from the federal government to our shareholders. One consequence of this would likely be a one-time increase in our stock price, but with no impact on our operations or employment plans.
.. but with interest rates at historical lows for years, American corporations have had no trouble getting capital.
.. By 2027, when they are fully phased in, four out of every five dollars in proposed tax cuts will flow to the top 1 percent, an egregious wealth transfer to those who least need it.
.. I believe tax cuts that deepen our already severe inequality in income and wealth are not in the long-term interests of any citizens, not even the very wealthy. Extreme inequality is corroding our civil society, poisoning our politics, and undermining our effectiveness as a nation.
Gary Cohn and Steven Mnuchin Risk Their Reputations
When Cohn joined the Trump administration, many corporate executives were relieved, seeing him as a steadying influence.
.. Now, unfortunately, both Cohn and Mnuchin are endangering their reputations in their attempts to sell a tax cut.
.. Within the administration, there are real differences among how top officials have behaved and how they are perceived. Several — Tom Price, Reince Priebus, Sean Spicer and Rex Tillerson — have badly sullied their standing with virtually everyone outside the administration. After long careers, they have turned themselves into punch lines.
.. The clearest exception is Jim Mattis, the defense secretary. Mattis has done so partly by avoiding scandal and minimizing conflicts with Trump. But he has also been careful to set his own ethical boundaries. Can you recall a single time when Mattis has said something outright untrue? I can’t. That’s how he has retained his dignity in the eyes of so many people.
.. In the early stages of promoting Trump’s tax cut, they have made a series of statements that are blatantly false — not merely shadings of truth or questionable claims but outright up-is-down falsehoods mocked by various fact-checkers. The statements make the two look more like Trump press secretaries than serious business executives whom members of Congress can trust.
.. They fall into two main categories. The first is who benefits from the tax plan. “Wealthy Americans are not getting a tax cut,” Cohn said on “Good Morning America.” He was echoing a promise that Mnuchin had made before the inauguration: “Any reductions we have in upper-income taxes will be offset by less deductions, so that there will be no absolute tax cut for the upper class.”
.. Want to guess how many families in New York State — population 20 million — are wealthy enough that they’re likely to pay any estate tax next year, according to an estimate based on I.R.S. data? Just 470. The number is so low in Montana, Vermont, West Virginia and four other states — likely fewer than 10 families in each — that the I.R.S. doesn’t provide details, to avoid privacy concerns.
.. Then there are the two men’s deficit claims. “This tax plan will cut down the deficits by a trillion dollars,” Mnuchin said. Cohn claimed that “we can pay for the entire tax cut through growth.”
.. The Harvard economist Greg Mankiw coined the phrase “charlatans and cranks” specifically to describe people who claim that tax cuts pay for themselves. And Mankiw is a conservative who’s worked for George W. Bush and Mitt Romney.
.. Neither one of them has yet turned 60 years old. These won’t be their last jobs.
Republicans, Trapped by Their Flimflam
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.Comments
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
Steve Mnuchin: We’re not cutting taxes for rich people. Bernie Sanders: Yes, you are.
The richest 1 percent — households making at least $732,800 — would get an average tax cut of $129,030, the analysis finds. For the typical one-percenter (who earns much more than $732,800), that means 8.5 percent more income after taxes. The richest 0.1 percent, earning at least $3.4 million a year, would get $722,510 back on average, for a 10.2 percent average boost in after-tax income.
By contrast, the middle class (households earning $48,600 to $86,100 a year) would get $660 back, a 1.2 percent income boost. The poorest fifth of Americans, earning $25,000 or less, would only get $60, a 0.5 percent increase.
.. But the next guest on the “This Week” was Vermont Sen. Bernie Sanders, who delivered a stinging rebuttal:
Everything he [Mnuchin] said is dead wrong … They are repealing the Estate Tax. The Estate tax only applies to the top two tenths of one percent — millionaires and billionaires, like the Walton family of Wal Mart, like the Koch Brothers, like the Trump family. $269 billion in tax breaks for the top two tenths of one percent over the next ten years. And this is not a tax break for the rich? Well, I don’t know what a tax break for the rich is.