Nation's Top Two Newspapers Blast GOP Tax Plan
NY TIMES EDITORIAL
With their new bill that would slash taxes on the wealthy and blow up the federal budget deficit, House Republicans and President Trump are making it absolutely clear whom they are working for — the top 1 percent — and whom they consider dispensable. Well, that’s pretty much everybody else.
The bill, which House leaders unveiled on Thursday after weeks of back-room negotiations that only Republicans were privy to, contained multibillion-dollar gifts for corporations, Wall Street titans and rich families. While there are a few peanuts thrown at lower-income and middle-class families, many people of modest means who take advantage of deductions and credits for things like housing, state and local taxes, medical expenses and education costs could end up paying more in taxes.
At the same time, the bill would add $1.51 trillion to the federal debt over the next decade. In coming years, Republicans will surely point to that inflated debt to argue that it is imperative that Congress slash spending on infrastructure, Medicare, Medicaid and Social Security.
Where to begin? The primary goal of this bill is to slash taxes on corporate profits to 20 percent, from 35 percent. Mr. Trump’s minions in the White House and Congress are mouthing the same old stale arguments: that businesses will take the money saved on taxes and hire more people and hand it over to employees in raises and bonuses. If only. Credible economists believe the benefits of the cuts would accrue nearly exclusively to shareholders and executives. In fact, about $70 billion a year, or 35 percent of the benefits, would flow to foreign investors who own shares in American companies, according to Steven Rosenthal at the Urban-Brookings Tax Policy Center .
The bill would also lavish benefits on real estate partnerships, hedge funds and other pass-through businesses, which send their profits directly to their owners without taxes being withheld. Republicans want those business owners to pay taxes of just 25 percent on that income, rather than ordinary rates, which go up to 39.6 percent. Republicans argue that this will benefit small businesses. In fact, a large majority of small-business owners already have personal tax rates below 25 percent. This provision would aid a small group of developers, investors and other tycoons who work in professions or industries where it is relatively easy to set up pass-through businesses. Like, yes, Mr. Trump and his family, who make their money from one such industry: real estate. Let’s not forget that Mr. Trump has not released his tax returns, something every other major-party presidential nominee has done for nearly 40 years.
Republican lawmakers argue that they will put in protections to prevent people from turning their salaries into pass-through income. But their promises ring hollow when they are not even bothering to close the carried-interest loophole used by private-equity and hedge-fund managers to treat some of their income as capital gains, which are taxed at a lower rate than wages. Mr. Trump railed against that tax provision during the 2016 campaign.
On personal income taxes, Republicans say they are simplifying and cutting taxes for most people. But that is not really true. They propose reducing the number of tax brackets to four, from seven, while raising the lowest bracket to 12 percent, from 10 percent. They want to double the standard deduction but eliminate personal exemptions. One new benefit that could help many families would be a $300 tax credit for tax filers and their dependents who are over 17, like an aged parent. Strangely, it would end after five years. By contrast, the bill’s cuts to corporate and other business taxes would be permanent.
The changes that could affect middle-class families the hardest include the elimination of the deduction for state and local income taxes. And the property-tax deductible would be capped at $10,000. Many people in high-tax states, like California, New Jersey and New York, would be especially hard hit. Those families would also be squeezed by the proposal to cap the mortgage-interest deduction for home purchases starting Thursday, the day the bill was introduced, at $500,000. Reducing this deduction is worthy of consideration, but it ought to be part of a comprehensive reform of housing subsidies that won’t put home buyers in high-cost areas at a disadvantage.
One particularly hardhearted change would eliminate the deduction for medical expenses, which is primarily used by people with serious and chronic illnesses. Gone, too, would be important tax credits and deductions for college tuition and interest on student loans.
Unsurprisingly, the tax bill contains a couple of provisions that are designed to benefit the Trumps and others like them. It would get rid of the alternative minimum tax, which is paid primarily by upper-income families with lots of deductions. This tax accounted for a vast majority of the income tax Mr. Trump paid in 2005 , according to a leaked copy of his return. The Trumps would also benefit from the bill’s proposed estate tax changes. That tax currently applies to inherited wealth above $5.5 million. Republicans would exempt wealth up to $11 million starting next year and eliminate the tax after six years. That would benefit the heirs of just 0.2 percent of people who die every year, but cost the government $269 billion over a decade.
It will take experts weeks to fully analyze the House tax bill, but what we already know is frightening enough. No Republican who cares about fairness, economic sense and the financial health of the government can support with a clear conscience this shameless wealth transfer.
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USA TODAY EDITORIAL https://www.usatoday.com/story/opinion/2017/11/02/gop-tax-reform-worse-than-partisan-its-petty-editorials-debates/827254001/
The much-hyped, and long-delayed, House Republican bill to overhaul the federal tax code is not entirely without redeeming qualities.
The measure's cut in the corporate income tax rate from 35% to 20%, for example, could boost the economy. And its limit on the interest deduction for new mortgages has angered the powerful homebuilding and Realtor lobbies, which suggests that its drafters might be doing something right.
But by the standards of President Reagan’s landmark 1986 tax reform, this plan is a major disappointment. It lacks fiscal discipline, is needlessly indulgent of the wealthy, and is purposely punitive to universities, college students and people who live in high-tax states. Taken as a whole, this plan is partisan, even petty.
Its shortcomings start with the fact that it is not revenue-neutral, something that Reagan insisted on. Preliminary estimates are that it would increase deficits by $1.5 trillion over 10 years. To put that in perspective, an only slightly different cast of GOP lawmakers screamed bloody murder in 2009 over an Obama economic stimulus plan half that size . Republicans were deficit hawks then. Now, not so much.
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Also disappointing is the general lack of simplification to the absurdly complex tax code. Sure, individual filers would be spared the chore of computing the hated alternative minimum tax but otherwise would find a tax code that is different, not simpler. Some business owners, meanwhile, would even see a substantial increase in their filing headaches (more on that in a moment).
The biggest flaw in the GOP plan is that, for all the rhetoric about helping the middle class, it is tilted toward the wealthy. Benefits for the rich include:
Termination of the tax on inherited wealth, a priority of wealthy GOP donors but not many other Americans. Immediately upon passage, estates of up to $22 million could be passed on to heirs tax-free. After six years, estates of any size could be passed on tax-free. Over a decade, this change alone would drain $172 billion from the Treasury.
Continuation of a special top income tax rate of 23.8% for managers of certain private equity funds and other select firms, an indefensible loophole that even President Trump had called for ending .
A bizarre, unfair and mind-numbingly complex provision that cuts the rate on income derived from “pass through” businesses. Though 95% of all business are pass-through entities, this provision would concentrate its benefits on a tiny sliver of them: medium and large businesses with concentrated ownership. It would also mean that some business owners would pay a lower tax rate than their highly skilled, highly compensated employees. This would cost the Treasury $448 billion.
To help offset some of the tax cuts that benefit the well-to-do, as well as rate cuts, the proposal targets a number of deductions and credits used by taxpayers of lesser means .
Medical expenses, for example, would no longer be deductible, a gut punch to seniors in nursing care and people paying for costly treatments. The adoption tax credit would disappear. So would the deduction for student loan interest.
People in high-income, high-tax, left-leaning states such as New York and California would be clobbered with the end of the deduction for state and local income taxes. And universities would pay a 1.4% annual tax on their endowments.
Victory-hungry Republicans hope to fast-track this major rewrite of the tax code, ramming it through the House before Thanksgiving and getting it to President Trump's desk by Christmas. If Democrats were trying to pull this off, Republicans would be crying out for regular order, multiple committee hearings, extensive analysis and outreach to the other party.
All told, this plan looks less like tax reform in the mold of Reagan’s bipartisan act of 1986 than an effort to reward Republican constituencies and punish Democratic ones.
USA TODAY's editorial opinions are decided by its Editorial Board , separate from the news staff. Most editorials are coupled with an opposing view — a unique USA TODAY feature.
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Why is anyone going forth with this disaster?
Agenda...Ryan wants his footnote in history with destroying Medicare, McConnell wants to kill everything that is Obama, and evangelicals want their SCOTUS picks, and the alt right want significance......and they only way that happens is to give Trump what he wants, MONEY!
Why? Because promises have been made (to the people that matter, the ones with deep, deep pockets.) and money has changed hands. So they'll do their best to rush this through as quick as possible before people think about it too much and it gets shot down.
It's strange that we live in a Country where the law makers and even the President wear a "for rent" sign, and they do so quite openly now days.
Wait a second - I thought Trump said that his tax reform wasn't going to do him any favors? You mean to say that he wasn't being honest?
We need to get some conservatives to comment here. I need to know what Fox News has (told them) to say on this.
From what I've been able to figure out from the tax plan is that I'm not going to get a tax cut but a tax increase..
Middle class always seems to get boned.
if I were king ..... lower incomers (above poverty rate) would pay a small single digit %. Top 5% would stay the same, middle class would finally catch a break and pay less ..... if I were king.
Say that enough and you could be King, just be sure to add plenty of insults, grandiose promises, intimidation and threats.
O and often inject the phrase, "Thrust me, believe me!"
https://www.bing.com/videos/search?q=wizard+of+oz%2c+scene%2c+%22if+i+were+king+of+the+forest%22&qpvt=wizard+of+oz%2c+scene%2c+%22if+i+were+king+of+the+forest%22&view=detail&mid=9746296696A69412F3979746296696A69412F397&FORM=VRDGAR
Alittle Bert Larr for ya.
Lol ..... pay no attention to the king of the forest
Don't forget the rumors, innuendos, propaganda and outright lies.
I always suspected you were a campaign manager looking for a job.
J/K
this tax plan repeals the johnson amendment allowing tax exempt christo-fascist religious cults to launder money for the GOtP while endorsing rwnj's from the pulpits of teavangelical taliban madrasas.
The 'devil' is in the details...