There is little difference in the tax world between champions of the middle class and champions of the wealthy. Middle class families earn about $60,000 and pay about $9,000 in taxes per year. A $3,000 tax cut is higher than most middle class champions recommend. But even with $3,000, a middle class family isn't going to get rich. Maybe they would by a 10 year old car.
The $3,000 the middle class spends on something comparable to a used car ultimately ends up in somewhere like a bank, which benefits the 1%. The money trickles up but, as liberal economists tell us, it doesn't trickle down. So that's it. Champions of the middle class buy a 10 year old car for them and otherwise leave them to struggle with their expenses. For the price of a car with 120,000 miles on it, the champions of the middle class can stick out their chests and claim they have not given in to the 1%.
if we really wanted to create jobs we would not be throwing money at people who are forever and a day going to be bottom line focused, especially if there is no explicit condition requiring job creation. I'm also confused by some of the numbers in this report and in the Tax Policy report which show taxes heading in opposite directions for the middle class.
2
The Republicans are really more concerned about about minimizing the proportion of the wealth in the hands of public institutions and maximizing the proportion in the hands of private entities. They really are not considering how to increase wealth.
Cutting taxes on the rich and big businesses assures that they will own a greater share of all of the new wealth created. But that does not increase the amount of wealth created. The entire economy's performance determines that. There is no reason that with everyone not rich just getting by and government unable to offer services for lack of revenues, that.growth may not improve. Then how can the total wealth increase? Under those conditions, to get richer means making others poorer.
2
What Larry Summers hints at, with his question "What is the compelling case for cutting the corporate rate to 20%?", Paul Ryan already knows: tax 'policy' is a almost a misnomer for this bill, for it's really ideology written as policy. For the Ayn Rand set (Ryan is an avowed fan) mandatory taxation is tantamount to a public theft of private assets. And American Libertarianism does nothing if not put Privacy and Property (along with personal autonomy) on a pedestal far, far, above any notion of a Public Good. In fact, the act of putting Privacy on a pedestal is, for them, an inherent Public Good. So much so, that the poor and middle class are seen mostly as the resentful failed-wealthy, out to seize the gainfully earned-through-private-enterprise assets to 'redistribute' their wealth to the undeserving, who use the power of numbers in a democracy to legitimize their theft.
Claiming an absolute private right to earned assets in the 21st century connected world is like a child throwing a temper tantrum in a spaceship. Indulging in self-centered utopias is simply not an option when survival is at stake.
We don't live in a nation of farmers anymore. We are not born into this world with a choice to participate in this contractual economy between Labor and corporate Wealth. We cannot all be materially wealthy. Therefore there is no public Good served denying an ROI by society. If the wealthy deny they're recipients of social investment, they don't deserve to be wealthy.
8
Oh it’s a rigged system alright, rigged in favor of the wealthy and powerful, thanks to Republicans themselves.
Whenever Republicans claim to care about anything else, it’s just done as a distraction from their fundamental, overriding pro-wealthy goals.
2
Donations to senators and reps from donors and corporate donors, lobbyists, and under-reported donations, and donations not disclosed and later discovered, should be taxable income to the to heist specialists senator or rep.
If you walk the halls of congress, you will notice that every office door has the bottom five inches removed, to accommodate larger, fatter envelopes.
I cannot believe these nimrods are in control.
I pray for a third independent slate of reps to save us. Vote the old out. Bring in new youth, not accustomed to robbery and fraud.
The "Back to a Gilded Era" chart speaks to me. The concentration of wealth is similar to 1913 and a quick bump, then a crash and then the roaring 20s leading to the depression. if history repeats itself, we should reach the next depression in a few years. Financial advisors say things are not overvalued right now in the stock market. But the concentration of wealth is worrisome and the Republican Rx of tax cuts for the rich is likely to push us into some sort of danger zone and resulting crash. We will see.
1
It is striking to watch congressional GOP representatives try to spin this mess into some narrative that attempts to sell the plan to average voters, to find favor in public polls.
In terms of general "wealth," lower and middle income families have still not recovered from the Great Recession. They've had some gains since the bottom, but upper tiers have grown roughly 10% beyond what they'd held prior to the recession: http://www.pewresearch.org/fact-tank/2017/11/01/how-wealth-inequality-ha... . From that Pew Center piece, dated 1 Nov. 2017:
"In 2016, the median wealth of upper-income families was seven times that of middle-income families, a ratio that has doubled since 1983. Upper-income families also had 75 times the wealth of lower-income families in 2016, compared with 28 times the wealth in 1983."
As would be expected, whites fared better than other ethnic groups.
Do not expect hard-core "Trump believers" to buy any of these analyses. They will ignore data at all costs. The want the reality TV series. But the rest of us, from all parties, should not buy the sales pitch emanating from many congressional Republican leaders. They are out to make powerful interests more powerful.
1
Unfortunately Republican voters do not understand math, and much less understand economics. They've been trained to obediently follow the "job creator" dog whistle. This is the favorite catch phrase of Republican politicians - you hear about "job creators" every other sentence. But by repeating the same thing over and over, Republicans have trained their base to believe that giving money to rich people (job creators) is going to somehow help them. The truth is that when the "job creators" get any extra money, they either buy new cars or put into their savings accounts or stock portfolios.
3
We need representatives in Congress to demand Trump release his tax returns or vote "no" to any tax reform.
5
Read it. Bored to tears. Tell me something about the GOP I might be interested in knowing.
Before you do Tom, a preemptive quid pro quo: the GOP congressional rank-and-file won't bother to read, lest understand, what they pledge allegiance to, Allegiance, tax reform, or other.
Tell them about the rabbits, Tom.
1
Instead of saying it is a "classic trickle-down proposal," let's call it as it is: another redistribution to the already wealthy accompanied by the smokescreen that something trickles down to benefit more of us. A trickle, moreover, colored red with blood from the cuts to services that range from health care for the needy to repair of bridges.
2
The extreme rich getting extremely richer - isn't that often followed by revolution?
5
A Big, Beautiful Wrecking Ball by Veterens Day. Mr Edsall has bottled lightening, thank you; and certain "patriots" for the Middle Class may want to rethink a toast to their, now, completely transparent Tax Sham.
1
"Cut my taxes, more money for me to fund your campaigns." Any questions?
6
Let's face reality. The middle class is dissolved. It only took about 30 years, mostly under Democratic administrations, but, the coup de grace has now come from the Republicans under Donald Trump. Suddenly America has withdrawn from the international science. We have abdicated our world leadership and simultaneously totally abandoned the remnants of the middle class. Democrats are equally to blame in their offering of Hillary Clinton and a replay of the trade agreements negotiated by the Clinton administration. Hillary may think she knows "What Happened" but she and the Democrats don't even have a clue. Nor does Donald Trump.
What we are now witnessing is the Trump version of "Its a mad, mad, mad world". Trump madness is the dominating theme. America is spiraling into two classes. Wealthy, educated, liberal upper-class and poor, un-educated, socially conservative lower class. The lower class, being un-skilled, unschooled, and largely ignorant can't grasp their situation and are increasing angry and bitter. The poorer less affluent can't understand that their poverty is caused by their own resentment that forces them to reach out and vote for Republican conservatism and more divisiveness. The poor and disenfranchised buy into the Republican vision that only the rich can save them by being job creators. Reality is otherwise. The rich get richer, the jobs are fewer and the poor are poorer. The poor assure the dominance of the plutocrats and oligarchs who keep them poor.
3
It is striking how the cuts are concentrated at the very, very tip-top, at the expense of the merely well off. The top 0.1% get more than twice as much as the nine times more populous rest of the top 1%! The 80-95 bracket gets a relative pittance.
3
How did Abraham Lincoln's Republican party become so heartless when so many Americans are still struggling to make ends meet? Too many haven't yet recovered adequately from the Great Recession. And these tax-cuts for the 0.1% and above shouldn't stand. (Donald Trump is not normal. He remains hypomanic. His continued defensiveness is making him lose touch with reality. Republicans in the Congress know that but they're trying to manipulate him to get their tax-cuts to make the rich richer still.)
I'm glad Democrats aren't yielding. If a tax-hike on the rich 0.1% isn't feasible leave everything as it is.
I would again suggest the taxes on the top 0.1% incomes should go up to 50% - they would still pay at the current rate on their first 99.9% incomes. But loopholes such as carried interest clause should be eliminated.
I would also suggest the payroll tax should be cut on the first $10K to 1% & the second $10K to 2%. Raise the cap to pay for the shortfall. But if at all possible eliminate the cap but cut the rate again to 1% beyond $150K so that rich wouldn't object lifting of the cap too much. This is likely to extend Social Sec. solvency by yrs., if not decades.
2
When did democracy get replaced with plutocracy?
It was a slow process that started with Reagan and helped along tremendously by Bush and now trump will put the final nail in the coffin of income equality and democracy.
Thanks Republicans for making America greedy again.
2
The time for pitchforks and torches is now.
The Uber wealthiest in this country are no longer Patriots or American supporters of our democracy. They are parasites- a class of individuals whose lust for money and power supercedes the Democratic process.
They buy over seas property in order to flee when the government they support comes crashing down. They support and encourage the divisions amoung us.
All in order to race for wealth with the biggest Global criminals on Earth.
If our democracy does not find a legal path to escape the perversion of money in our electoral process, you can kiss our democracy goodnight.
Louie
4
New Math:
Explain please -- how a majority of voters voted for Clinton, but now we see tax proposals from the GOP that only benefit the top 1 percent?
How does that work?
How can the GOP possibly think they will get re-elected if all they do is only help the top 1 percent?
Are the rich giving bribes to GOP Congressmen? Not just "campaign contributions" to stay in office (an office that pays about $250,000 a year), but an outright bribe -- such as a deposit in a Swiss Bank Account, or cash in a briefcase, or something in the Caymans or the Isle of Jersey, for millions?
Smells fishy.
1
I really don’t get Republicans. They complain that over-educated elite liberals look down their noses at them. Then they try to con them with these really stupid arguments, like maybe we aren’t educated after all. Like with health care, they proposed a plan that spent less money than the ACA and let insurance companies pretty much do whatever they wanted and then tried to convince us we would get BETTER health care. That’s insulting. Then they proposed a tax cut for the rich during the period of greatest wealth and income inequality in living memory and tried to convince us that giving them money would encourage them suddenly to start raising OUR standard of living. I just don’t get these people. They tell us we are snobby smarties. Then they try these really stupid arguments. I still wouldn’t like them, but I would at least give them credit for honesty if they would just admit that having power gives you the right to shaft people. Like Paul Ryan in his younger days at keggers dreaming of the day he could kill social security and Medicare. Now that’s a republican I can understand.
5
I have been thinking about this “rising tide lifts all boats thing.” I think Republicans are right. They just have it backwards. Instead of lowering taxes on rich people so they can get their hands on more money to create jobs, how about levying income taxes only on incomes over $100,000 ($250,000 for married couples). Rich people could pay all the FICA taxes, too. That would help consumers who could then buy all kinds of goods and services from rich people. They could just keep the money and not bother creating all those pesky jobs. A rising tide that lifts my row boat will raise your yacht just as well.
2
Who falls for their preposterous nonsense? The GOP will always be the party of the rich. How they win elections is beyond me. Two things can end it: 1) reverse Citizen’s United; and 2) end Gerrymandering. Well, and people voting is helpful, too.
12
republicans are doing such a good job in Puerto Rico - they deserve tax breaks.
3
Give the rich what they want, give them everything, preferably quickly and very painfully for everyone so that everyone knows what it really feels like to get the full-on Republican, millionaire & billionaire treatment. No more lies. No more slow, painful deaths. Let us know how much it really hurts. I think we all have a right to know what kind of monsters we have in office and who is really calling the shots, because it isn't the majority who have any kind of voice. Also, it would be nice to finally give those who keep voting these blood-suckers into office a taste of their own medicine. So, get on with it and make sure you have a safe bunker hidden out of sight, because, as is well known, the American populace is fully-loaded.
5
In the Republican world only corporations create wealth and need coddling. Their mantra corporations create Job Jobs Jobs is a Republican faith base tax plan. Their adoration of the Laffer curve is their moral compass. In spite the fact that small companies create more jobs, all effort goes to keeping corporations happy. We know corporations don't create jobs, their real values to Republicans it they create wealth for stockholders.
5
Presumably to benefit from a tax cut one must first be a tax payer; i.e. no taxes, no cuts. Hence lowest 20% quintile receive negligible cuts because they pay negligible taxes, and so on.
This proposed law is sickening. I suppose if, in the future, a child asks how trillionnaires got so rich we will tell them the story of the Republican party-that will pretty much explain everything.
8
It is time to eat the rich. They thought of them quivering in their mansions hoping the mob passes them by warms my heart.
10
That is exactly right.
The wealthiest in this country have run the show for too long.
Too much talk about guns, God and abortions. All the while ripping off the poor and the middle class.
3
Can we call this “tax reform” what it actually is, Trump Wealth Care! There should be no serious discussion of tax reform until we see Trump’s returns and how his plan would effect HIS taxes!!! Did we really elect this over-promising, under-delivering self-serving
huckster?
11
Once again a Republican plan to comfort the comfortable and afflict the afflicted.
JD
13
right-wing parties take from the poor to give to the rich
left-wing parties take from the rich to give to the poor
each tends to regard the other with opprobrium
2
Yes. we are looking at the future economic collapse of the good 'ol US of A. I for one am contemplating winterizing a family home in Canada to escape the greed and madness of our "rulers." Okay, Republicans, bring on the Depression, and then we'll see what remains of your family fortunes. Oh, yes, I forgot, they're offshore....well, the Bastide may be stormed, stand by for some real action.
3
The GOP led by Trump are corrupt.
The intention is to get richer now and when they leave office. It’s a con job. As former Mayor Michael Bloomberg said of Trump before the election and I quote exactly, “I’m from New York and I know a con when I see one”. Plain and simple.
All the nonsense Trump, Pence, Ryan and the entire GOP say are bogus.
Everyone needs to get on their reps offices and protest!
7
"How to make the rich richer" is practically a mission statement for the bipartisan elites in Washington — not just the Republicans.
The part that's missing would go something like this: "While keeping the hoipolloi confused and distracted with endless war and pointless geopolitical entanglements."
Other than for straight handouts to the poorest or the poor, how have the Democrats contributed to the prosperity and upward mobility of middle and working-class America?
1
The poor cannot leave poverty behind. The rich grow ever richer. And the aspirations of the middle class are increasingly unjustified. This societal feedback dynamic is apparently still the same as it was in Biblical times. For example, the rich donate to Republican politicians who pass laws that make them even more rich, and make them able to make even larger political donations. One important role of government is to stop this runaway unstable outcome, and find a fair and stable long term trajectory.
2
History tells us that when income inequality gets to be too great it never ends well for the wealthy. I'm not suggesting that we will start another revolution over taxes or that we'll rise up and guillotine the wealthy but at some point we will rebel. Nobody wants to pay taxes but if our country is going to be competitive we must pay our fair share.
The wealthy and corporate America did great after the recession. They made a ton of money while a majority of Americans lost everything and will never recover. The time has come for them to give back by investing in our country so we can continue to make progress. Otherwise we're going to continue losing our best and brightest to other countries where they can have comfortable lives.
3
The sad story here is that the media will fail to get the truth out about what the proposed tax cut is really about; protecting and benefiting the rich. Until the bill passes front pages of all news papers should be dominated by the facts portrayed in this article, every day snd hour. Anything else would be "fake" news and a disservice to the country. For our future we cannot let this happen.
3
A modest proposal to balance out the undesirable effects of income tax cuts for the rich: make it obligatory for a rich person to spend, say, 2.5% of his/her net worth at the end of a tax year during the following tax year. The money must be spent on purchasing goods manufactured in, and personal services delivered by residents of, United States, sourced from commercial entities not controlled by that person. The nature of the goods and services is immaterial, but the goods and services so purchased must not be resold, and the person purchasing them must not derive any income from the provision of such goods and services; that is, must not cycle the money thus spent back to himself/herself. The unspent part of the 2.5% (and any part spent not in accordance with the rules) becomes a tax due and payable to the government of the United States.
The rich can enjoy the proceeeds of their wealth, and provide a boost to the economy at the same time.
Perhaps even offer to the rich the option of no income tax at all in return for increasing the required spening to 5%, or some appropriate portion, of the net worth.
Readers can refine the particulars of the proposal to fill in the detail, minimising the devil.
Wealth/income inequality is the issue that will be the doom of this country.
3
Republicans are paid by the rich to cut their taxes, by donating millions to their campaigns. And it works. For decades Republicans have fought to shift the tax burden from the wealthy to the middle class. And these are certainly not the wealthy who "create jobs." Those are the innovators like Bill Gates, who don't mind paying their fair share, for they know that it is the middle class of America who made their wealth possible. Those who inherit wealth contribute nothing, but they measure their "worth" as human beings by how much they are worth in dollars. More, all they want is more. The Republican Party is utterly corrupt, doing the bidding of their benefactors and forcing the middle class to pay billions to the wealthy.
7
The most immediate way we can "create" jobs is to prevent further consolidation of industries. Our society cannot handle the "efficiency" that comes from firing redundant workers. There are a lot of other problems with automation, inequality, and outsourcing, but this is a clear and straightforward win. Unfortunately we are in for another round of mergers in telecomm.
The bottom line on all of this is that all but the top 1% of the country will pay in some way for these "tax cuts". We will pay in terms of a lesser social safety net, less or no work on upgrading our transportation networks, our cutting edge research in the sciences and elsewhere, in improvements to our lives in general. But the people behind this, the Kochs, the Scaifes, the Waltons and DeVoses don't care. Nor does our current president.
We need to think about what we want in a president before we walk into the voting booth. We need to look at our lives and the lives of our fellow citizens and decide what we want to support: multi-millionaires and rich corporations that don't need tax cuts or working Americans who do, at one time or another need to use the social safety net because of things beyond their control. There's always a cost involved but in America the representatives we elect seem to favor helping those who don't need it. The GOP in particular has no understanding of what life has become for most of us. Or, if they do, they simply don't care.
Taxes are what we all pay to support a functioning country. There are things we pay for that we don't use or don't like. It's part of being a citizen. Every country has taxes. Most countries have higher taxes than America and their citizens receive more and better services than we do. Perhaps it's time we demanded more from our representatives than we do.
10
Got it, by eliminating the estate tax the Trump kids get a huge windfall paid for by taxing grad student fellowships.
12
According to the Citizens United ruling by the Supreme Court, corporations are people. Why should a corporation/person have a 20% tax when income far exceeds the income threshold of an individual for the 39% tax rate? A corporation can donate unlimited amounts of money to political campaigns and receive mult-billion dollar benefits from new legislation.
9
Why do liberals always respond to that difference in tax rates by demanding that businesses be taxed at the higher rate rather than workers taxes being slashed to the lower rate? It's because they like controlling the purse strings and the power that comes with it. They get all warm and tingly over the idea that big government is there to make the world in their image.
We should not label ourselves. We are taxpaying Americans responsible for the repayment of our debts. Individuals should be required to have a working understanding of basic math and the economics of our tax revenue structure, sources of total revenue and expenditures, deficits, cumulative national debt and future forecasts.
1
Two thirds of GDP is consumer spending. As in Eisenhower's time (50's, 60's) we need to tax the rich at very high rates and invest this in education, infrastructure, and scientific research. The economy was firing on all cylinders back then.
Greatly scaling back the aforementioned investments and the creation of the aristocracy that gained traction starting with Reagan has been the cause of the decline of America. The tax bill currently under consideration continues and accelerates this trend.
We need to pry the accumulated wealth from the undeserving rich and put it back into circulation in the economy. Let's face it, a billion dollars handed over to folks such as trump and those in his administration, and the donor class is tantamount to relieving oneself into a hurricane force winds.
14
Thank you for stating that so clearly. I do not understand why this is not obvious to everyone and acted upon accordingly!
4
The author conveniently leaves out the proportion of income taxes paid by the various income segments, since that would undercut his socialist arguments. Lower incomes pay little-to-no taxes; high incomes pay the bulk of the income taxes. So how do you give a tax cut to someone paying no taxes?
The rich getting richer does not undercut middle class incomes. The competition from the bottom certainly does, whether from domestic or international sources. Fortunately, we still live in a capitalistic society, where incomes and prices are largely established by the intersection of supply and demand, and not one in which they are dictated by the likes of Mr. Edsall.
1
VFO conveniently leaves out some PRETTY IMPORTANT basic facts.
You will note that when the poor are derided for paying little or no federal income tax, that definition of federal Income tax excludes the payroll taxes deducted at source from employee paychecks that is used to fund unemployment insurance and social security. These taxes are called payroll taxes, not income tax and broadly equate to a similar but separate amount of money collected as income tax. Payroll taxes are overwhelming paid by the lower income wage earners since deductions are limited to the first $108,000 of annual wage income.
The next part of the GOP smoke and mirror exercise is to insinuate that the Federal income tax is being used to pay the takers and wasters who receive unemployment and social security. "Another Error"
Republicans have been mis-sing these definitions for long enough - shame on you VFO.
8
The fallacy in your argument is, "The rich getting richer does not undercut middle class incomes." It is the same as President Trump's Press Secretary, Sarah Huckabee Sander's, now famous, "five guys walk into a bar" analogy.
Perhaps you saw it on FOX News, and it made perfect sense to you.
Sarah did not mean it as a joke, but the non-Trump voters all went "you've got to be kidding".
Here's the thing: over the last 20 years the total share of the GDP has moved exponentially to the 1%. It was a shared (with labor) gain for decades, but now it is not. The "rich getting richer " comes at the expense of everyone else. That's why taxes are "progressive". Were you asleep in history class during the section on American history 1900-1935 ?
6
That's always the same old argument from the oligarchy. And it deserves the same old response: what you're advocating is a regressive tax system, not one based on an ability to pay (yes, the rich can afford to pay more, and should take pride in being able to give back to this country, the one that enabled such riches in the first place). You position suggests that taxes would only be fair if all federal tax was at a single lump sum amount per capita regardless of income. If the poor can't pay, well then jail 'em!
2
What will Republicans do once they gin up the Gini to a 1.0 (perfect inequality) in our nation? The rich will still want even more with a >1.0 Gini score by increasing debt amongst the rest of us - good ole debt slavery!
Anyone believe that a 25% pass-through rate will satisfy the Plutocratic idle rich and reduce their offshore tax dodge to avoid paying even the reduced 25% tax cut give away? They will continue to pass-through income and profits to tax havens overseas. The complexity will continue to enable this scheme.
6
What are corporations making capital investments in these days? Automation.
Corporations are increasingly betting their money on automation; not hiring people to increase production.
If corporations can write off the total cost of purchasing a robot in the first year why would you hire a person? The robot is "free", the human is not.
Who is at risk in the Trump tax plan? Blue collar Trump supporters. True, they will get a $40 year tax cut, but they won't have a job.
11
Excellent point! To carry the thought a little further, with the expensing of the investment, the federal government is thus effectively helping to underwrite the automation of work and the elimination of jobs.
1
House and Senate versions of the tax bill, created behind mostly closed doors opened just enough to let business interests slide in are being crafted to get enough votes to pass. Every alteration is created to mollify a reluctant vote. The notion of tax reform is the lipstick on the pig. The reforms consist of permanent tax cuts for some kinds of businesses and some kind of rich people and they look a lot like Trump. Middle class lollipops will melt away over the years. The people who will pay now and in the future are groups without enough size, or clout, or who are not favored. Any notion that this is a reform is humorous.
7
You have to admit that eliminating the AMT - a senseless, diabolical, parallel tax code, is a wonderful idea. The tax code needs to be streamlined, with fewer deductions and much fewer special credits, so that is it evenly and fairly applied across all income levels.
1
I admit no such thing! The AMT us u useful way to tax high-income individuals who have so many deductions they would otherwise pay very little tax. Would “simplifying” the tax code recoup this tax? I doubt it.
2
This “undeserving” group of ultra rich is amassing not only vast wealth but political power as well. Our system of government was not designed to create an aristocracy, but the Republicans apparently disagree.
13
What do average angry white supremacist trumpsters think about all this? The got pass-through income structures?
3
Trump voters will gladly give their last dollar to the 1% and pledge their eternal servitude as long as the ultra-rich promise to protect their God, guns, and white supremacy.
My mother was right. Our country is being destroyed from within—not by immigrants, gays, or people of color, but by an unholy alliance of plutocrats and social conservatives who have more hate in their hearts than brains in their heads.
6
You have to give it to the very wealthy and corporations....they have successfully taken over both parties ever since the Lewis Powell memo from 1971. The corrosive, trickle down economic system we have been living through for several decades is now close to achieving what it was intended to accomplish....the complete rot and destruction of the working and middle classes, the "de-construction" of government and democratic institutions and finally, the complete shift of the tax burden for the "common good" to be paid for by the lower classes only. The United States is well on its way to the gutter.
15
Actually we need a tax increase to reduce the deficit, not the opposite. As for tax cuts, cutting payroll taxes (FICA, Medicare) for a period of time would produce the greatest growth by putting money in the pockets of people who would spend most of it. And this should be coupled with doing away with income limits on these taxes, regardless of the source.
5
We could use a war surtax. LBJ got one for Vietnam.
Today's news tells us that the endless war on terror has cost us $5.6 trillion since 9-11, with nothing to show for it except for the creation of ever more enemies.
6
I am sorry Mr. Erdall, without being rich at ALL, and without being a Republican, I must say that I find the death tax immoral. Once the money you owe was taxed once, it shouldn't be taxed twice. End of story. Rich people shouldn't b punished for their success. On the other hand, I am all for closing the capital gain loophole for hedge-funders.
2
There is nothing immoral about the estate tax. One of the original intentions of its enactment, back in the Progressive Era time of trust busting with Teddy Roosevelt, was to encourage hard work and merit in the economy by undercutting a class of aristocrats whose dominating position in society stems from inheritance, i.e. what their parents or grandparents or great-grandparents did.
3
Fundamental misunderstanding here Alexgri.
Guy makes a million when he's 25, invests wisely and dies at 75 with 10 million. That 9 million capital gain was never taxed. Under GOP rules, that capital gain gets passed onto the next generation - and the next etc - each time getting a tax free uplift. Geddit???
You have fallen for the common GOP myth that every inheritance is an accumulation of hard earned income that has been prudently amassed from income that has already been taxed. In most cases, a significant part of inherited wealth has never been taxed because it has been built from capital appreciation. Earned income is subject to income taxes, but the capital appreciation, that has never been crystalized (cashed in) gets no tax under GOP rules.
8
I beg your pardon: There is no such thing as undeserving rich. There are only undeserving poor.
I have this on the best authority, among others, the Koch brothers, Paul Ryan and Lindsey Graham.
8
My capacity for outrage is being strained. In addition to the proposal to tax the endowments of universities, I just read that there is a proposal to call tuition waivers for graduate students taxable income. That should hold down the production of Ph.D.s except for the students from rich families. Having all those over educated people who do not come from privilege around just causes trouble. I know because I am one. I can see why Republicans are opposed to higher education. I assume their own children are an exception.
16
There is a very simple reason that tax policy is so sticky and difficult to change: such changes materially affect the values of all taxed and tax-preferenced assets.
The problem with disposable income is that the ultra rich cannot spend it fast enough and their coffers swell, accumulating undeclared income until their property stocks, paintings, or properties are sold. The issue that is never raised is that expensive protections provided by the military, states, and municipalities benefit the wealthiest citizens the most. "When you got nothin', you got nothin' to lose". So if the trends continue and the polarity of wealth gets more extreme, society is doomed to a police state worse than now. British courts assisted early labor law to protect the wealthy from their own greed. Is that what we really want? Has government devolved into merely marketing of false economic policies?
3
With more and more brazen and overt displays by our elected officials to work ONLY for the rich ('hey, Trump gets away with much worse plus we REALLY have to accomplish what we were paid by the Koch Bros to do'), you would think the recent election would give them pause. Combine their actions with the revelations from the Paradise Papers released by Applybee and a worldwide organised revolt against the super rich would not surprise me.
3
Its really something how closely the bottom of the pit on your "Gilded era" graph corresponds to the best, most productive, most stunningly economically successful period in American history.
The wealthy and the Republicans are plain liars when they claim any concern for the health of the economy or the nation, and they are clearly willing to ride the country to destruction for their personal benefit.
7
When the destruction arrives the Ubermensch will simply jet off to whatever place that they’ve selected as their ultimate redoubt.
The mega rich truly own this country. The rest of us just happen to live here. For the moment.
2
When / if the Dems come back in power again let them prove to the American Public that the majority of us have not been forgotten. Let them dole out meaningful legislation and put their money where their mouths are. Then and only then will I believe that they are better than their lowly counterparts.
4
And why not. They deserve it and we don't.
1
Republicans have always advocated giving more money to rich people because they believed that these people would invest they in new businesses and create more jobs for working people. This belief is based on an unspoken theory of how people would do when they receive additional money. Recent work indicates that our economic behavior is not at all certain. Individuals may decide to buy things which would enrich their personal lifestyle or to make passive investments in paper which would further enrich them. In recent years, corporations have also invested passively by buying back their own stock.
2
If the rich were inclined to do the no-profit activities of government, there would be no need of taxation or government.
3
Until Trump shows his own tax returns, no American should support his spurious brand of tax “reform.” I am shocked at how passive we have become — we should be in the streets, protesting on behalf of American values, which to me mean equality of opportunity, without regard to zip code at birth. So the deplorables don’t mind subsidizing Jared and Ivanka’s ski trips to Aspen at the expense of their own kids’ opportunities? Unbelievable.
15
Every ticket in Powerball offers the same opportunity to win it all.
in addition to the direct benefits of tax cuts, the rich also benefit from the unequal distribution of deficit spending. the money that the government spends in excess of its revenues does not flow evenly to all sectors in the economy. the already wealthy benefit more from deficit spending. federal deficit spending over the last 5 or more decades has contributed to the current inequality in the distribution of wealth in the country. republicans only use deficit spending as a cudgel to beat up the democrats when they are out of power. once in power they continue and even expand deficits to the benefit of their wealth contributors.
5
It is very hard to find a wealthy person who doesn't derive some income from public debt.
3
This article is so revealing and so disheartening. Thank you Mr. Edsall for giving us the facts. How any one could support such a horrible tax proposal is beyond my comprehension. It will only lead to a social revolution.
3
Our country is broken. Politicians do not represent "We the People". This is obvious class warfare. The time is now, people need to stand up and be counted. Get active and expose these thieves and liars. Call them out every single time. 2018 and 2020 are fast approaching. The DNC needs to get on board and sever their relationship with big money now. You are either with us or against us. No more identity politics! It really is all about the Benjamins.
11
Art, loved your comment but how many politicians are going to take the lead and NOT accept that kind of money? How many politicians have a back bone to do what's right?
1
First things first. Stop what they are trying to do now. Then we can get to Citizens United. Sprinkle in some legislation requiring elected officials to speak the truth and act in the best interest of the common good ( hold them accountable for their many breaches of the oath of office) and expose the phony think tanks. To your final question....Bernie did.
1
This tax-cut-for-the-wealthy thing is beginning to make the "inequality" issue feel like the gun control issue.
It's so bad folks, the best we can do is simply make it worse.
Trust us.
5
Could someone please do an analysis of the effects of these proposed changes on Mr. Trumps tax return? Obviously, we don't have a lot to go on, but even in the few pages that were released, it would be interesting and informative to see how the changes will affect his taxes - since he claims he will be hurt by this.
4
Your chart would be more informative if it also showed the percentages each cohort is paying now. I am sympathetic to the points expressed but the additional information would provide a more objective analysis.
1
One trope that the conservative media keep trotting out is that this is all justified because the wealthy pay most of the taxes. Which is true, but misleading; they pay most of the taxes because they retain an even more overwhelming share of the wealth and income. To bring clarity to the issue, would the author kindly expand the "Who would get what" table with columns reflecting share of wealth, share of income, current share of tax burden, and proposed share of tax burden?
2
Here in New York City, the poor pay the same 9% sales tax as the rich.
2
The rich pay a larger share of total income tax, but the poor pay a much larger share of payroll taxes . Check it out!
2
"Equal protection before the law" (14th amendment) should apply to tax law as well as all other laws--as it did in Brown vs Board of Education
"Protection" means "prevent harm". Harm may occur by commission or omission--doing it or letting it happen.
Tax benefits for the rich, increase taxes on others--harming them.
So does all regressive taxation, given the basic principle of diminishing marginal utility. Additional dollars contribute less and less to quality of life as wealth increases. Thus "head taxes" take bigger bites from those with less money.
Obviously "Equal Protection/Harm" is at least ignored--more probably systematically violated by the GOP in its deliberate march back to feudalism and maybe even fascism.
They also systematically discount the causal contributions of public service, infrastructure and civility to private wealth--flying the nonsense flag of "self-made" billionaires. Private wealth is the creation of property, tax and labor law.
4
Most Americans don’t know...or simply can’t conceive....of how the tax code tips to the wealthy. First, capital income is taxed at a lower rate than work income, and Mr Edsall speaks of stepped up basis at death, so that even the lower rate is avoided. It’s as if working for a living is being penalized with sin taxes, like it were smoking. Sitting on your duff and passively taking profit is valued more.
Now, the republicans are suggesting that small business owners, like doctors and lawyers and investment advisors, get their work income taxed at the lower capital income rate. Tough luck for those people who can’t leverage their skills into a “business”.
2
It is amazing how may of these folks think Joe the Plumber can step in to force Wall Street to be honest.
1
This article advocates the socialist dogma of redistribution of wealth, by shearing certain incomes to the ante-penultimate millimeter of their fur. Tax on inheritance, as well as on anything other than income earned in the sweat of one's brow, is immoral and confiscatory. But people accept it, allow to be led to be sheared, and are silent.
1
Practically everyone undergoes a life cycle of wealth consumption, production, and consumption again.
The article points out that thanks to stepped up basis, nobody paid taxes on the gains. Not the deceased during his lifetime, not the heirs after his death. You say that only income gained through work should be taxed, so maybe you like that result, but people who work for a living instead of living off inheritance and trust funds tend to want some help paying for national defense and airports.
4
What the chart clearly shows is that taxing investor income at lower rates than wages has caused the wealthy’s share of income to grow at the deficits expense
It’s not tax reform until we tax all income as ordinary income
6
Oh boy! A tax cut for Jared Kushner. It's ironic that the Trump base views their guy as a great deal maker because the deal he's making with them is typical: Give those of us who have, and have an awful lot, more tax relief, and you in turn can have... a tiny bit. What a deal. Iggy Pop said: I got some, you got none, together maybe we can have some fun. Winners and Losers.
3
It's easy to criticize Republicans for "making the rich richer."
It's their entire raison d'être and everybody knows "that a favor-the-rich, reward-the-already-affluent ideology is embedded in the Republican Party’s DNA."
But where have the Democrats been on this?
What did they do in 2009 when they controlled both houses of Congress with a filibuster-poof majority to address wealth and income inequality? Where was their tax plan to make the poor richer and the rich poorer?
That's right: nowhere.
They made the Bush tax cuts permanent, increased the military budget and bailed out the too-big-to-fail banks on the backs of homeowners.
The years 2008 through 2015 should be known as the Great Fleecing. During that time period the greatest transfer of wealth in the history of the world occurred. Some $4.5 trillion was given to Wall Street banks with the American people picking up the IOU and getting little more than working ATMs for the misery.
Obama's presidency also worked out great for the military industrial complex, the security surveillance industry,Big Oil and Big Pharma.
I wonder where the author has lived for the last few decades. The Democrats don't differ in any meaningful way from the Republicans. Both parties support Wall Street over Main Street, and perpetual war over peace.
Time to face reality.
“There is only one party in the United States, the Property Party ... and it has two right wings: Republican and Democrat.” - Gore Vidal
2
Nope. Obama did NOT keep the tax cuts for the higher incomes.
The ACA put a new tax on investment income on the rich to pay for an expansion of Medicaid.
If you were paying attention during the ACA repeal battle you would have seen that repeal wouldn’t just have ended health care for millions, it would have been a huge tax cut for the rich. That was the entire point of repeal. And the entire point is why Republicans aren’t Democrats. Anyone who can’t tell the difference is part of the problem.
4
Oh, and that money was lent to banks, not given. It all came back, plus interest, and helped get us out of the Great Recession. The one Republicans put us in and Democrats got us out of. In vs out, loans vs gift....not subtle differences.
@ Yeah
Candidate Obama said it was time to raise income taxes on high earners, whom he classified as couples making at least $250,000 and single people making $200,000.
President Obama agreed to a two-year extension of EVERYONE's rates. In 2013 he raised rates on families making more than $450,000.
The ACA put an additional 0.9 percent payroll tax on earnings and a 3.8 percent tax on net investment income (NII) for individuals with incomes exceeding $200,000 and couples with incomes exceeding $250,000.
That is LAUGHABLE.
Obamacare has very little to do with "health care" and everything to do with forcing Americans to take out "health insurance" which merely feeds the bloated "health care" (really ILLNESS CARE) industry and Big Pharma in the US.
Of course that shouldn't come as a surprise, as Obama essentially allowed the Pharma and insurance company lobbyists to write the bill.
And the Obamacare architect, Elizabeth Folwer, immediately left the White House for a very lucrative pharmaceutical industry job.
I was paying attention, were you?
As we live in a capitalist economy - unlike communist or socialist which have failed to motivate people to work hard - rewarding hard work is good for our society. So, when people prosper through hard work of their own, that is well earned.
However, inheritance is a different story. The root cause of wealth inequality is the fixed pattern of rich get richer while the poor stay poor. Why is it fixed? Because a vast majority of the wealthy parents pass on the wealth to their children.
Inheritance rewards even those who are less productive as long as their parents are wealthy. On the contrary, children of the less fortunate families can only hope to inherit something let alone be left behind a heavy debt burden due to debts racked up such as student loans. Fixed pattern of poor stay poor is so rigid that most children of less fortunate families can’t dig themselves out of the hole.
Loving your child is indeed a wonderful feeling.
However, if that love is reserved only for your child without regard to others, then it will shape itself into an act of selfishness.
In lieu of monetary wealth, leave your child a wealth of heartful memories from the highs and lows shared together.
And then, as for the monetary wealth that remains even at the end of your life, return it to the wider society for the benefit of those who are less fortunate. In the form of donation or estate tax.
2
You just don’t understand:
1. The estate tax is unfair double taxation. After all, if I paid taxes acquiring all that wealth, why should I have to pay more tax on it when I’m dead? Taxing dead people is just plain mean. It really hurts them especially since they can’t defend themselves by voting or buying a congressman. Totally unfair. Moreover, Republicans, being the party that favors a hand up but not a hand out, should be able to hand out enormous wealth to their children who haven’t earned it, paid any tax on it or done anything to deserve it. That business about self-reliance applies to you, not them. Why should they have to worry about a job or health insurance? It makes me sick just thinking about it. Please take my Medicare. I can’t bear thinking about Don, Eric and Ivanka flipping burgers at $10/hour.
2. Tax cuts stimulate the economy. If you take a class of people who have accumulated more of a share of wealth and income than at any time in living memory but apparently haven’t used it to stimulate the economy sufficiently and give them even more wealth and income, they will have an epiphany and start creating jobs like you wouldn’t believe. It just follows.
This is not rocket science. But if you’re not a Republican, you may not understand.
8
Obviously if you’re dead you aren’t paying any taxes at all. That is also not rocket science.
I wish that all of these articles bashing the wealthy would point out how much the wealthy are paying in taxes. Assuredly, if a person is earning $1 million, he/she is paying in federal, state, local taxes, tolls, sales taxes, etc. probably $600,000. So everyone who is bashing the wealthy should be thankful that the wealthy are paying so much more than the average Joe. But it is easy to target the minority. The lower earners simply want to pick the pockets of the wealthier, and the can do so because they have the numbers. That is what's not fair.
3
Trillions of dollars transferred from the middle class to rich individuals and corporations who DON'T NEED IT... ! Does the GOP think that nobody will notice?
4
Fox News has a reader/watcher base that they bamboozle with fake and dire contrary information. Why would any Christian, Evangelical, moral, ethical, sound person vote red, I do not know? Winning is losing in the Trump era.
2
I've written my Republican Congressman, Lee Zeldin, for whom I voted in 2016, that if this tax bill passes or if my Fed taxes go up at all, I will vote against him in 2018 and vote Dem forever.
IF YOU HAVE A REPUBLICAN CONGRESSMAN, please do the same.
I also emailed and snail-mailed our entire Village asking them to send similar letters.
HAVE YOU WRITTEN YOUR GOP CONGRESSMAN? Why not? Do you think reading or writing these NYT comments will accomplish anything?
Have you written your neighbors to send similar notices? Why not?
If you don't take action now, don't come back here in April to complain.
4
According to most accounts, many but not most middle class workers will experience a federal tax increase under the republican plans. So your taxes will probably not go up. However, the federal debt will be substantially increased which will likely result in future cutbacks to middle class programs (social security, Medicare) and tax increases.
3
It's very simple: Politicians are addicted to money, power and position. Without donor's, they cannot run a campaign. So politicians have to pay off the donor's. Complicit corruption of the democratic process. What more is there to know?
The infrastructure is breaking down, and they don't care. They just don't want to kick in their share of taxes.
At some point more money stops making the rich feel happier. It is another corollary of the law of diminution at the margin. I would feel wealthier if the public places I transit were less shabby and the people happier.
2
How about Tim Cook & Apple:
A set of leaked documents from offshore law firm Appleby has revealed that Apple stashed $250 billion in Jersey, a tiny island off the coast of France known for being a tax haven. ... A year later, the European Union investigated Apple's activities in Ireland and ordered the company to pay $14.5 billion in back taxes.
Americans lining up for $1000.00 phone that Apple makes almost $700.00 on.
Is Apple helping America move forward or backward?
4
We are stuck. We can't vote them out because the plutocrats have bought our dear democracy gifted to us by the great founders and their political Descendants like the great FDR. The extreme wealthy have funded an enormous propaganda machine in the Faux News Network and they have cornered the political market by massively funded gerrymandering, the rest of us can't compete unless we pool our money and even then they will still have more. Moreover, they do it in secret and break the law which we are never allowed to do because WEALTH in this country is NEVER questioned.
When class warfare and racism are the only arrows in your quiver...it's sad commentary about the Democrat Party.
Where are the ideas about getting the economy moving again? Oh wait...Liberals don't want that. It might energize their constituency to vote differently.
Strip the uber-wealthy like Apple's Tim Cook of their citizenship. If they want to park their money in overseas tax shelters all the while trying to shove a Made-in-China flag down our throats, they don't deserve citizenship.
1
Dear Mr. Edsall,
Discussions about the linked issues of tax cuts and income equality are like an endless "Groundhog Day" movie except without the laughs.
Over the past 75 years, government spending has averaged about 17% of GDP. A flat tax on everything and everyone - income, corporations, small businesses, estates, consumption, or whatever else - above a negotiated poverty level, with NO deductions of any kind, factored in over however many years it takes to minimize the obvious economic disruptions, would accomplish at least three very important things:
It would be fairer than what even the late Mother Teresa would be able to devise - you make more, you pay more. Period.
It would reduce corruption to the greatest possible degree: you can't steal what you can't change.
And it would deprive Republicans of their biggest blunt instrument to slam Democrats with AND it would rob Democrats of their biggest sob story to incessantly lecture the rest of us with.
Which is why it will never happen.
Looking for sanity in politics is almost as silly as looking for it in religion. To paraphrase Diderot:
Man will never be prosperous and free until the last politician is strangled with the entrails of the last demagogue.
Cordially,
S.A. Traina
2
If Congress only represents the rich we're back where we were 250 years ago. Maybe the rallying cry for the next revolution will be an oldie but goodie, "no taxation without representation!"
2
The GOP makes me totally sick. They are completely ignoring that most voters don't want this tax cut for the rich, even their voters are skeptical of it, they continue to rattle on about "addressing healthcare again because we promised it for seven years" while ignoring the defeat of three ridiculous bills this past summer that no one wanted, and meanwhile, no meaningful legislation gets passed to REALLY help us - like the infrastructure and jobs bills we desperately need - no, instead they waste their time on legislation no one but their rich corporate owners want. It's beyond frustrating at this point to try to get them to listen through traditional means, perhaps it time for marches and protests to happen en masse every week to hopefully get it through their thick skulls that we hate their "policies." Apparently Tuesday night's elections made no dent. We are now looking at another year of noting happening once campaign season starts next year. So much "winning" and MAGA'ing going on, can anyone stand it anymore?
1
The presidents followers are so dangerously stupid and ignorant that the bill isn't even disguised as "trickle down" because it doesn't matter, they think they will be as rich as Donald because they voted for him. That is the reality TV mentality and propaganda at work. The rest of us who work for a living are totally screwed.
The Republican Party has already created a noble or gentry class that our founders had tried to choke out of existence with equal representation. Marx was right after all, the history of the world is the story of class struggle.
3
This tax plan is a "let them eat cake" offer; a total lack of interest in the salaried person. You know, the ones who actually do the work that makes the corporations so financially top heavy. As for the trickle down effect? That's never worked, never will and the Paradise Papers pretty much explains why - most of the savings go to offshore accounts.
Even a discussion of removing medical deductions is cruel. Like health care isn't expensive enough?
Charity Foundations have long been the province of wealthy individuals to avoid estate tax. They not only do great good but can also give the heirs a sense of value.
2
Pigs.
We will remember come November. These thieves belong in prison not running the country on behalf of their owners, The Koch Brothers.
NO REPUBLICANS IN 2018. NONE. NOT ONE
NO REPUBLICANS IN 2020. NONE. NOT ONE
7
What a fantastic summation of what Trump and the Republicans really stand for, which is money. At a time of widening income and opportunity disparity, their big idea is to make it worse.
If the Democrats can’t seize on this and demolish the Republicans in 2018 and 2020, then what is the point of the Democrats?
3
"By 2027, the center found, those in the bottom two quintiles would, on average, get very modest annual cuts of $10 and $40; those in the third, fourth and fifth quintiles would get average cuts of $320, $710 and $3,860. Those in the top 1 percent would get a $52,780 tax cut and those in the top 0.1 percent a $278,370 cut."
While this essay may make the true aim of the Republican tax plan clear to the well-educated, the above paragraph (down near the bottom) is what MIGHT be understandable to the average American. We NYT readers, typically fairly well-educated, get it already. We need more simple explanations to show to the Fox News faithful before it's too late.
2
Trump needs to show his own tax returns and then needs to explain how he can put his Presidential seal of approval on a plan which he and his family would personally make tremendous gains made at the expense and detriment to the middle classes.
1
The GOP sees gold, the baby boomers will be a sizeable chunk of the population. If Medicare is in place they will not be able to profit from their medical expenses, so they want it all. They want our pensions, our savings and if possible our salaries. This is greed in its' purest form, they are showing their hand right in front of us. Turn it around. The safety net was in place because many cannot afford healthcare nor saving up for a raining day let alone a life altering event. Profit is what they are after. This tax plan is the blueprint for their end game, to take all of us for everything. Remember they live in the now. Medicare would work if there was oversight and prosecutions of criminal fraud with prison sentences. The GOP seeks to eliminate the poor and make sure only those who they can milk survive. Harsh reality but this is their end game.
2
The argument against tax cuts for the rich ISN'T that the 99% should hate the rich and soak them for all they're worth. The 99% aspire to join the 1%.
Rather, the argument is that the 99% will either be forced to pick up the difference OR will be deprived of the social services the 1%'s taxes would have paid for. That should be the emphasis.
Republicans may be able to jam through this give-away, but they can see the writing on the wall. Soon, the Democrats will regain power. When they do, expect tax reform that hits the 1% harder than they have it now.
2
I noticed that the list of those who will benefit from the repeal of the estate tax, there weren't any family farmers, or small business owners. Were there too many of these beneficiaries to list?
2
Welcome to the United Banana Republic of America.
Please tell me how anyone can morally support this scam. How can you call yourself a Christian and be a Republican? How can you knowingly support this ignominious group of miscreants?
As Ted Kennedy asked: "how much is enough"? "When will you be satisfied"?
1
How much "income inequality" do we need before we reach a "tipping point" and the public rebels? Wasn't that how we got Donald Trump in the first place with his fake white nationalist populism that has been more rhetoric and red meat tweets than reward. Instead, he's revealed himself for the greedy, Putin-admiring, oligarch he is. The "win" he and his Congressional Republican enablers so desperate want will only exacerbate the very social unrest that allowed him through the quirk of the antiquated Electoral College to become President. The voters rejected the establishment politics of greed in 2016 and they rejected them even more loudly in the elections the other day. What voters want is old-fashioned democratic decency and fairness, and what Mr. Trump and his Republican allies are delivering is just the opposite. We don't need a permanent oligarchy of inherited wealth made possible by eliminating the estate tax, we don't need the AMT eliminated for the wealthy that will allow the President to pay no taxes. We need those taxes to stay, a top rate for millionaires of 45 percent, and the promised $1 trillion infrastructure program that will deliver the good-paying "jobs, jobs, jobs" that corporate tax cuts never have and never will. It's time for the wealthy to stop robbing the rest of us. If history teaches us anything, it's that this leads to social chaos and very bad outcomes for the privileged who feel that "let them eat cake" is their God-given right.
3
I'm 69 years old and have worked since I was 17. I am now disabled and haven't worked for the last 8 years. I got disability which later turned into social security. I make a little more than 10,000 a year. To read about all these people who are complaining about how much in taxes they are paying is impossible. Probably like the people living on a dollar a day feel when reading about someone making a little more than 10,000 a year. There comes a point when arguments about how rich you can be loses any meaning at all. Another universe.
1
Is it true that American's basic math skills continue to decline? It appears so. It's terribly concerning when tens of millions of Americans lack math proficiency allowing them to "follow the money" even when it's well-explained in articles like this one. They are simply numb to numbers in general.
Then there's the outright lies of the GOP. Many Republican leaders (including Trump) have referred to the estate tax as "the death tax" which scares legions of low-information voters who infer that much of their family's meager inheritance will be snatched up by the dreaded government.
Any politician who uses "the death tax" line should be immediately and publicly chastised for implying that all pay that levy when in fact only .3% of the populace has more than $5.6 million, beyond which the tax kicks in.
2
States can and do tax estates, and their different practices are fronts in the economic war between the states.
Edsall summarizes his viewpoint in his first sentence - referring to the "undeserving rich". Really ? He later refers to billionaires such as "Mark Zuckerberg, Michael Bloomberg, Larry Ellison ..." In what way are they undeserving ? Did they become rich by theft ? Or monopoly ? No ! Each of these people earned their money by providing a product for which many people willingly spend money.
Maybe he means "undeserving" in that the rich do not deserve lower tax rates ? What is the purpose of taxes. The US Constitution describes in Article 1, Section 8 a very limited set of functions that the federal government is supposed to perform. Even in Europe, the idea is not to soak the rich, but rather to provide a broader set of services by taxing everyone at similar rates (driven largely by a roughly 20% VAT or sales tax).
Instead, Edsall refers to the dreaded Gini coefficient and other measures of the share of wealth held by the rich. On this basis, liberals in the US create a new rationale for taxes - to take from the rich to give to the poor. Actually, it's not new. Marx famously urged to "take from those with the greatest ability to give to those with the greatest need". As Thatcher noted, the problem with this idea is that it tends to create more needy and fewer able.
Shouldn't we instead focus on the choices we can all make to increase all income - improving skills and strengthening family ? Or is scapegoating all this once great nation has left ?
2
Whether intentionally or inadvertently, you are obfuscating the issue. The estate tax isn't about taxing Mark Zuckerberg's or Bill Gates' accumulated wealth. It's all about taxation of wealth left to their heirs, whose sole accomplishment in his regard consists of being born into the right family.
Stated another way, if I earn $10 million building a mansion for a billionaire. I pay a tax on the income. Yet if that same billionaire leaves $100 million to each of his children, they pay no tax on this unearned income.
That is what's meant by "undeserving rich."
2
Who pays for 'improving skills' of someone born poor or someone who loses his job at the factory? Who pays for 'strengthening a family' that loses its wage earners through cancer or chronic disease?
As far as corporate tax rates go, the 35% is an artificial figure given the loopholes and deductions many companies get each year which can for many of them result in a "zero" tax bill or even a refund.
When that artificial number is lowered to 20%, without changing said loopholes, deductions, and subsidies, those businesses will be getting even larger refunds. What will that do to the deficit?
To make matters worse, those refunds will pad the profits and make their way into offshore accounts or foreign investments netting a big fat zero for the American economy.
1
Most inheritors feel no real incentive to build something, stick their neck out, create. Eliminating the estate tax does not help inheritors or society at large. Do we want a society where the rich primarily don't do anything - or, anything much? As a nation, we can't expect to be competitive with a leisure class at the helm. Think about the Vanderbilt family - and many others like them. These families self destructed. When any person is given something for nothing in return, prepare for errant behavior. Think of Ancient Rome or 18th century France. When balance is lacking, the empire will end. Given that American society is totally out of balance AS IT IS - why would we make it even more so?
If the Republicans are successful in jamming this budget proposal all the way through, then the voters have not been fairly represented - they've been hoodwinked - again. The longer our massive disequilibrium exists, the more likely our failure as a nation becomes. We must equilibrate now.
The same is true of our frightening national debt. As a spendthrift nation, we are on track to crash. I was shocked to hear a representative from the United States Chamber of Commerce suggest recently it makes sense to run further deficits to reverse the deficit. We borrow today at the top of the market with very low unemployment? Now? Really? No. We should only borrow during emergencies. A balanced budget amendment would require our politically motivated politicians to run in the black.
2
Wealth does reduce desperation as a source of motivation.
Private debt is the real limit to how much public debt to take on. As long as interest rate rises on aggregate public and private debt produce enough additional tax revenue to pay the increased interest rates on public debt, the government is covered.
1
The estate tax provision could have been worse, at least from the standpoint of those who are not currently exposed to it. That is, just about everyone. If it were to be coupled with the elimination of the step-up provision, then we would all be truly subject to a "death tax" in the form of capital gains tax on unrealized capital gains. Not that these reprehensible politicians give a hoot about the rest of us, they just want to give Trump the very largest and cleanest tax break they can. If his wealth claims can be believed, his family's savings could approach $1billion.
As more and more functions become automated, ownership of the means of production becomes a more important source of income. Estate taxation can encourage broader dispersion of ownership of financial and physical assets while still providing for family nest eggs to be passed down through generations.
1
The more this decrepit Republican "leadership" wonders how to make the rich richer, the more it should, rather, wonder why it's slowly and surely destroying itself.
1
no wonder Trump "loved the poorly educated"...
and the chutzpah to ask "what do you have to lose?"
Whoever it is that Trump / GOP supporters wanted to stick it to, I sure hope those supporters who are actually on the receiving end think they are getting their money's worth.
Nothing is better and nothing is winning... health care, taxes, a wrecked environment, etc
If this doesn't get people out to vote and to vote out these cronies I am not sure what will
Of course, the Grand Party for the Super Rich will do anything to fatten the wallets of the .05%. The propaganda machine funded by the fat pockets create an illusion for the Republican legislators as “fiscal hawks”. It is a shame and disgrace that people don’t get deeper into the vudoo economics followed by them. The fiscal hawks fool us by saying many things- but the truth is they fail in math. They want to cut taxes for the super rich (many of them pay little because of the loopholes created by Republican legislators). The fiscal hawks will pass a tax cut while creating a trillions of budget deficit which the nation will pay dearly. The party lost its heart some years ago and the it has transformed into tax cut party neglecting the basic needs of the nation.
"[G]iven that [Trump] seems to have stakes in at least 500 pass-through entities, it looks like reducing his rate to 25 percent from 39.6 percent would save him a ton of money."
In other words, when Donald Trump said this change to the tax code is "not good for me, believe me," he is once again lied through his teeth. Will people never learn with this man?
2
To modernize Mark Twain's famous sentiments, "It could probably be shown by facts and figures that there is no distinctly native American criminal class except [the Republican] Congress."
1
The evil that lurks in men’s souls is in full flower with the Republicans. They think what happened last Tuesday is an aberration. They do not realize they are totally abhorrent now to the middle class.
1
Repealing the Estate tax is the embodiment of entrenching wealth in the hands of a few. Is that what Republican's are really after? I guess if you go by an Ann Randian philosophy that the rich are somehow more deserving it might make sense. Whoever created the wealth in first place came up with something that produced the wealth, but the children of rich didn't do anything. And even if the rich came up with a good idea or a brilliant strategy, that has nothing to do with whether they should pay significant taxes on their income.
The reality is that income inequality is a problem, and it is becoming even more of a problem. When you are dead, you are dead. Great wealth must be broken up in the long run to prevent exactly what is happening now. A ruling party in the pockets of the very wealthy. I can see how a jobs plan, and reducing the impediments to getting higher education would benefit the country. I don't see how this tax plan does anything but generate a windfall for the rich who can't even really benefit from that increase.
51
Guess what, the vast majority of wealthy firstly have inherited their wealth and secondly, those that "earned," it did so in most cases by what was already provided for by society, did Bill Gates invent the PC? No. Did Mark Zuckerberg invent social media? No. Wealth is created at the unpaid expense to the society that it is created within.
an interesting effect in many countries with super-rich/aristocracy - poor people can look up to the gilded rich and dream 'as if' it were themselves enjoying that luxury - the way the English support the Queen
so when asked why they don't rebel against the obvious inequality, many show equanimity as they almost seem happy entrenched in their poor low education small communities of minimum mental effort with sparse but known rewards.
When imposing tax cuts, it’s hard to cut middle and lower class taxes by a lot because they pay so little compared to the upper classes. According to the AEI, if you adjust for government benefits, the top 20% of income earners pay 100% of the Federal income tax revenue. This hardly seems fair, especially since the taking of something without an exchange of goods or services is technically theft, and higher earners in no way prohibit lower earners from increasing their income.
John R. What benefits is this poor boy getting? I use no social services, or what would be called welfare, I and barely recoup much on my tax returns each year...yet I lose nearly half my salary every year to taxes...and/or other deductions...my earned interest is a pittance, yet that too gets taxed. And lets not start with my local property and school taxes...which are nothing but legalized extortion.
What you're missing, John, is that hidden in this bill are many ways in which the superrich will continue to shift the burdens of income tax on to the "mass affluent." Remember--they are taxing everyone who works for a living, including people who make very high salaries (many of the affluent will see their taxes go up under the current proposal), in order to give more to people who don't get their money from work of some sort (that's what everything from the estate tax to pass through is all about).
1
What the Republicans are doing with the current tax bill is absolutely disgusting.
The greed and lack of self respect...wake up America!
6
I would have no problems with a tax cut -
IF our roads, airports, health care and education systems, energy and communications grids were not at 3rd World levels.
IF - Congress was not taking the money from working people, the sick and the lame, children and the elderly to give to those who already have more than they ever use
IF - Congress wasn't also borrowing $1,500,000,000,000 to give even more to those who already have more than they ever use
IF - Any of this would ever trickle down to the bottom - rather than end up in another off-shore account or another overpriced mansion that is never lived in
IF - we were not fighting multiple wars around the world and our veterans had the health care and benefits they earned and deserve
This whole plan makes no ethical, moral or economic sense.
9
Meza-I like your list of conditions for a tax cut. What all of us, Democrat, Independent and Republican need to do is to define what we want government to do. We don't all have the same ideas; we don't all have the same needs. The nation will come together if all of our voices are heard. Government is managing conflict to make decisions without violence--that requires a willingness to hear other views. The process in Congress is broken, mainly because Republican leadership is trying to ram through unpopular legislation--legislation which is not even supported by the majority of Republicans. They may be able to get a party line vote on taxes--only by excluding the voices of the majority of the country.
Can you convince your fellow Wisconsinites to stop voting for Ryan? You'd be doing the country a great service.
2
I actually live in his district and he doesn't even respond to my e-mails
1
The vast benefits to the wealthy from this Tax Bill are jaw dropping. But the scariest part is what happens after the bill passes. To fill the massive Deficit hole it creates the GOP will "have to" make massive cuts to everything except the Military, that means Medicare, Social Security, Medicaid and every social safety net program. There will be no "getting up" if your family falls down. And no rising up if you are solely responsible for the sick, disabled and elderly in your family. If passed, this bill will start the elimination of the middle class and likely result in "refugees" fleeing this country in order to provide a better life for their families.
4
What do you expect when the supreme court rules that money is speech?
The speech of the wealthy is louder than that of the poor. The GOP is listening to "their master's voice" and doing their bidding.
6
And let's not forget that they are undermining the Johnson Amendment by allowing churches to endorse candidtates for office. This is a major change in policy and is not going to receive the debate it should. Let's have an amendment to tax the churches!
3
Lost in the discussion is the broader fiscal policy issue, unless you buy the Republican trickle down theory, which is simple nonsense. Taxation is important. It sets incentives and thereby affects economic activity in the long run. This proposal ignores the long-term policy effects at the expense of an immediate windfall for Republican donors and corporations. It severely distorts long-standing incentive structures. Passing it with slim partisan majorities likely ensures reversal or near-reversal when the other party wins. We are creating a pendulum in macroeconomic policy. The resulting uncertainty, coupled with the immediate distortions to economic activity cannot be positive for growth. If tax reform is necessary, then it ought to be done on a bipartisan basis grounded in sound macro- and microeconomic analysis. Otherwise we run the risk of flattening economic growth over the long run.
1
Robert Reich pointed out not long ago that he is sure he sounds like a broken record because he's been repeating himself for 30 years.
That's over three decades now of informing and educating non-economists, like myself, about the subterfuge and lies of the Republican Party so they can parasitize basically everyone else.
Personally, I've seen this train coming since inauguration day 1981. Reagan was asked by a reporter why we should give more money to the already-wealthy, and his response was "because the wealthy know what to do with the money.. the poor will just spend it".
Even if this un-tax-the-wealthy and tax the poor plot is defeated, it is possible that we are still very vulnerable to another 1929 style Depression owing to our unregulated, casino type high-speed gambling with the peoples money on Wall Street.
IMHO, the real goal of the Republican Party isn't about the money. That is only an avenue to achieve the real target.
The complete destruction of democracy with a loud bloviating dictator "making America great again", just like Rome two millennia past.
Let's keep it simple. This is a big tax cut for billionaires. For the rest of us? Not so much!
2
Citizens United unleashed a flood of cash allowing the 1% an opportunity to buy politicians and now after being told by this donor class to give them a tax cut or no money for re-election they present such a bill. The GOP lies and claims its a middle class tax cut while Cohen Trump's financial genus claims the trickle down theory will really happen this time. Trump claims he will be a loser believe me the phrase he so often uses when lying which he seems to do so often. This tax bill after hurting the blue states they feel don't count as it is a GOP tax cut and should be considered as gerrymandering the money to benefit their donors. Down the road with an out of control deficit the GOP will claim time to cur social security,medicare and medicaid and keep tax cuts for the rich who are blessed by God as they claim. The next 2008 crash will be worse as there is no bail out possible only the 1% will have safe harbor as planned.
Dynastic wealth accumulation is exactly the kind of nepotism against which our founding fathers revolted.
They threw off the mantle of royalty with its inherited wealth and title to create a more equal society. They enshrined those ideas into a Constitution and left it to us to protect. As is said, patriotism is the last refuge of a scoundrel. The GOP are committing treason.
5
I cannot believe the stupidity of the Republicans. Increasing financial inequality in the United States is likely to lead to more violence and even revolution. That is certainly not good for anyone including the super wealthy. The Republican effort to pit the lower middle class whites against people of color will eventually fail to distract from the Republican support for the wealthy and super wealthy. Any one who cares about the future of our country (and the world) should be able to see the fallacy of the Republican agenda to reward the super rich and the military industrial complex. Most Republicans in government are morally bankrupt. They are not willing to take care of our environment, they do no want to add to our economy by creating massive infrastructure upgrades, and they are certainly not prolife since they do not support universal health care or improved gun control. I just hope that Americans come to their senses before it is too late.
1
Do they have the courage to cut health care for the poor and then harvest and sell their organs on the world market? UNTAPPED OPPORTUNITY!!! INNOVATION!!! A much better return on investment than Soylent Green could produce.
2
Would someone please let me know what the Republican's end game is? It has to be more than raising money for elections campaigns and making friends?
Someone please educate me?
Very well said but still complicated for the average citizen like me. What the Dems need to do is take a page out of the Repub playbook -- the Harry and Louise ads that torpedoed Clinton's health plan -- i know despicable, but the effectiveness of that campaign was it went right to average American's concerns... It can work with the truth as well.
3
In today's NYTimes, David Leonhardt recommends a different name for the tax bill: "Paul Ryan’s 2017 Tax Increase on Middle-Class Families". Of course, Mr. Ryan would deny that emphatically, but we've seen Mr. Ryan in this context before. "Ryan has always been a con man — someone playing the part of Serious, Honest Conservative, but never doing a very good job of it. His budgets were always fraudulent in obvious ways, full of trillion-dollar magic asterisks and spectacular evasions." - Paul Krugman, Nobel Prize In Economics, NYTimes, May 2016.
3
I remember 50 years ago my dad saying "republicans are the party of the rich" and thinking he was exaggerating like he did about everything. Nope, he wasn't, were, are, and always will be the party of the rich -- the white rich.
5
"While income inequality is high in the United States — the World Economic Forum ranked us 29th out of 30 developed countries in 2017 — wealth inequality is much greater." How does this make sense in a Democracy? It doesn't. We are now in a Plutocracy that is entrenching it's ability by law to funnel all of the wealth to a very few. Wealth that is being created on the backs of the rest of us. Why do we tolerate this? Why would ANYONE vote for these people.
VOTE THEM OUT!!!!
6
Great Analysis.
How does this help our society? Quite simply, it does not; to the contrary, it exacerbates divisions and takes resources from those in need. Ultimately, social stability- something we all take for granted- is at risk.
3
Tom throws away all semblance of balance attempting to prove that Republicans are solely about turning America into a land of five “winners” and well-over 300 million “losers”. It’s not a compelling argument.
If the rich become marginally richer – not at all a foregone conclusion given the changes that still are percolating in the tax bill proffer – then it’s at best a secondary effect. What thoughtful Republicans are after is a broader tax base more in line with what we had up until about 1980, when efforts began in earnest to shelter lower-earners from any participation in co-funding our governance, and more in line with what Europe practices – a Europe that is constantly thrown in Republicans’ faces on healthcare and other governance choices.
We see the need to make our immense social spending more sustainable, because it’s quite clear that most of us have accepted that we can’t materially reduce it. We can’t forever go back to the well of our higher-earners to make that spending more sustainable, so the only alternative is to broaden the tax base and draw in the middle classes and even the working classes – to participate in the funding of entitlements of which they are almost entirely the beneficiaries.
Tom should be gratified, because I’ve provided the left a desperately-needed life-preserver by accepting that we can’t materially reduce social spending. But he’s wrong about motivations, and probably wrong about ultimate effects.
One can always count on Trump and his enablers to look after themselves at the expense of everybody else. Trump, McConnell and GOP servile opportunists have the nerve to claim that the tax reform is intended to help the Middle Class when it does exactly the opposite. It is a raid on the Middle Class to add more wealth to the Trump family and other superwealthy families. The sheer brazenness is breath taking. It has been recognized by moat Americans today that wealth inequality has reached grotesque levels. Yet the GOP is proposing a tax plan that will increase this inequality further by increasing the tax burden on home owners earning between $75,000 and $200,000/year to give a bonanza to 0.01% of the population. Obscene does not begin to describe this plan.
4
Incisive analysis here. Let me add that the individuals set to benefit from said tax repeal windfall are the self-same individuals who have funded the politicians advancing the legislation, and the so-called "think tanks" (ALEC, Heartland) who provide the wording for same. To say it's a "quid pro quo" arrangement is to minimize its intended impact, which will prove devastating for the economy, perhaps especially for the long-term once malfeasance from deregulation kicks in and craters the economy anew.
10
Repeal of the estate tax would serve to increase wealth disparity in this country, that is obvious. What is less apparent is the fact that those who inherit the vast sums of money from very wealthy parents will never need worry about working or their relationships to society as a whole. As Thomas Piketty and others have pointed out, once a fortune reaches a certain size, there exists very little for the owner of the estate to do except live on a tiny percentage of that fortune. Money can be plowed back into further investments, thereby increasing wealth disparity and perpetuating the status of the ultra-rich.
A new Gilded Age, indeed.
47
And the money is plowed back into further campaign donations, thereby increasing the political power disparity and perpetuating the status quo of our politics that perpetuates American wealth inequality.
The media neglects its duty to the public by ignoring campaign finance. One reason is the media also profits greatly from our high cost campaign ads funded by billionaires.
1
Why should after tax dollars be taxed again? We're not a socialist nation. The Govt has no right to double dip. Did you complain when Obama blew the debt out of the water?
Poor John, stuck in political syntax with no regard to reality.
First, as you now, the estate tax affects essentially nobody.
Certainly not you. So let's just be clear from the start that yours is an ideological position not much connected to life on this earth.
Then there's the classic Republican 'double dip', which this is not.
As you so clearly point out, this is an estate tax, not an income tax. Not that people who pay estate taxes actually ever pay any income tax, but you get the point.
If you think this really is double dipping, I expect to see you tonight, outside the PigglyWiggly, complaining about the injustice of paying two cents tax on a pack of gum.
Then of course there's the non-tax argument, which I trust you have already settled in your own mind, that one purpose of an estate tax is to foreclose the possibility of creating a new, European style de facto aristocracy, just like the one we ran away from to get here.
Apparently you're comfortable with that, which is good because people who think like you have gone a long way toward recreating eighteenth century England right here at home.
The 1.5 TRILLION dollars in deficits produced by the current Republican "tax reform" bill comes to $4,600 for each of the 322 million men, women and children in the United States. A family of four could receive a check for $1,840 per year for the next 10 years.
If we're going to put a huge cash advance on the national debt credit card, let's make sure that everyone gets a piece of the action.
5
Instead of splurging on a giveaway, how about we have something to show for the money, like infrastructure which would get the money into the economy and put people to work.
1
And the Republican plan would end the deduction for medical expenses!
My child just spent 6 months in the hospital for cancer treatment.
I'll be calling you, Senator Todd Young, and especially you, Representative Susan Brooks. Please don't pretend to care about "all Hoosiers."
31
During the Obama administration, Wall Street Banks received $4.5 trillion through the quantitative easing program, so yes, he helped the rich get really, really rich, so in the end, he helped himself. Otherwise, why would he of been offered $450,000 for one speech? Tribal politics is how the rich keep the average citizen and voter at bay, at each other!
9
at least Obama's $450.000 profit from 1 speech was after his term, not before he ran, like Hillary and the big banks.
Either one - Obama's (and Michelle's) paid speeches or Hillary's (and Bill's paid speeches) - are bad. Does greed know no limits?
1
Sorry, but clearly you have no idea how QE works (not that it was even a good idea).
I have friends whose sole source of information is Fox News, ie the propaganda arm of the 1 percent, the plutocrats and the Republican Party.
If you share with them an article like this with data and analysis their brains go into a crashing eruption of "Crooked Hillary" and "Investigate Benghazi". One or two bemoan the plan to send the middle class to the concentration camps for reeducation and extermination. But otherwise they dig their heals in further and say "Give Trump a Chance". Poor John Lennon.
49
Republicans often make a big stink about people getting their hands on other people's money without working for it. You would think that by this logic they would favor a 100% tax on all estates. Oh, right. It's only the undeserving sorts ("those people") that trouble them.
18
Myopic, greedy, and destructive for many.
9
Let them have free wi-for!
Typo at end of paragraph four on year when costs of repeal of estate tax max. In column states 2017 most likely 2027???
5
I believe President Putin's goal is to make the wee people of the United States feel powerless and embittered so that he can operate a modern feudal system run by oligarchs. Putin can easily control the oligarchs through "plata o plomo" (silver or lead). Controlling the U.S. Congress is nearly as easy as controlling his puppet in the White House. Simply blackmail or bribe the leadership, and the rest will follow. This may be why so many Republicans are resigning this year.
5
If the Republicans pass this huge tax cut for the rich at the expense of the working and middle class, then maybe (a big maybe) their so-called base of uneducated white males will actually wake up understand the they are being played like fools
10
Nice thought, but it will never happen. I still am flabbergasted when Trump supporters still stand behind him when we see them being interviewed. Some of these folks , I'm sure, think the estate tax might somehow apply to them. Then again, they buy into the GOP narrative that tax cuts for the wealthy will help the working class. I don't remember much trickling down during the 80's, but what do I know? I'm a poor sap that works for a living.
1
Probably not. On the surface, almost all will get a cut. They won't be exposed to the fact that the rich get much more. Later, the Republicans will blame the deficits this causes on Democratic spending for Those People who don't work, and working class whites will support cuts to programs that mostly help them. And they will lose overall while thinking it was because of Those People.
2
"One of the saddest lessons of history is this: If we've been bamboozled long enough, we tend to reject any evidence of the bamboozle. We're no longer interested in finding out the truth. The bamboozle has captured us. It's simply too painful to acknowledge, even to ourselves, that we've been taken. Once you give a charlatan power over you, you almost never get it back."
Carl Sagan, _The Demon Hauted World_, 1995
2
"The House legislation, backed by the Republican leadership and President Trump, would, starting in 2018, double the size of estates exempt from taxation to $10.98 million from the current level of $5.49 million. It would repeal the tax altogether at the end of 2023."
Imagine the frenzy to keep grammy and grampy alive as 2023 approaches.
December 31, 2022. "If you die now, you ungrateful old wretch, you'll deprive your grandchildren of billions of dollars. Your doctor says your will to live is more important than your actual state of health, so get willful!" The monitoring machine goes all flatlines. "You've bankrupted us!"
6
That's a replay of the old novel "The Tontine", where the last beneficiary struggles to stay alive until Jan. 1 to get one more payment.
Greed Over Party
5
Ah, the "Paradise Papers" Party, now on full rapacious, plutocratic view. Don't you wish you were rich, Mr. and Mrs. Middle Class? As they say, to the winners go the tax cuts. Weep, and pay for them, Losers!
7
Scary right?
Implicit in Mr. Edsall's analysis is that Republican legislators are convinced (perhaps rightly so) that republican voters are idiots. From the standpoint of these charlatans the truth is whatever they say it is-- and their voters will believe it.
If republicans want to give enormous tax breaks to the wealthy at the expense of the rest of us, why don't they just own that? Why bother with all of the flim-flammery?
21
Quite the contrary. What is implicit in his analysis is that democratic voters are idiots. Whose tax code have we been operating under for the past 11 years? The argument that the tax cuts will disproportionately advantage the people who actually pay taxes is classic democratic class warfare politics. When was the last time a democrat ever said a tax cut was NOT going to benefit the rich? Probably in the John Kennedy era. Wake up and smell the coffee and get you head out of the left wing propaganda machine drivel.
The pay the most taxes because they have most of the wealth (which does not mean that they earned it), and they pay less taxes than they have wealth. The wealthy are undertaxed.
Are (all) the Ultra-wealthy really this greedy? And so stupid that they don't see what is happening to (*their*) country? Do they really perceive that such polarized politics are good for them? And that destroying The American Dream is a good thing? Go talk to them - find out! I want to know what they think!
12
I find it difficult to fathom the very nature of these tax cuts which are specifically designed to benefit the rich and their families. It is disgustingly appalling and makes me angry to hear the rhetoric of these elected officials including the President embellishing and raving these cuts. The greed, corruption and favoritism coming from government at the expense of the middle class and the less unfortunate is grossly irresponsible and unconscionable. I thought plutocracy was dead.
Let’s see…..if this bill passes my modest deductions will disappear. I will no longer be able to deduct interest for my student parent loan which is already capped at $2,500 per year, I will see limitations on state/ local tax deductions, property taxes and home mortgage deductions. Oh, I forget about medical….way beyond my reach. However, there will definitely be an increase in my taxes.
Yet…..this benevolent government is doubling the amount of estate taxes from $5.49 million to $10.98 million with plans to repeal the tax altogether by 2023. In addition, they will be providing corporate welfare at tax payer expense.
All of this is coming from the most powerful and richest country in the world which preaches democracy and fairness to the Nation and the world. The country is going downhill on roller skates and the leadership of this nation should be ashamed.
22
Since the only Trump tax return we know (2005) showed that he only paid the Alternative Minimum Tax, these new tax cuts for the rich probably won't profit him much personally. Unless the AMT itself is repealed.
Which only shows just how screwed up the system already is.
Yes, I believe repeal of the AMT is in there.
But it will profit his heirs bigly.
1
Repeal of the AMT is in the Republican plan, so he stands to gain bigly.
If Donald Trump's "base" could take time out from hate to read this column, perhaps they would have an entirely different viewpoint of their "leader." The clear intention of this "tax and jobs bill" is to create an even more defined plutocracy, one built upon the backs of the poor and what is now a disappearing "middle class."
The problem, though, is Fox "News" and Rush Limbaugh, who keep those most in line with their president's financial/political/social viewpoints on the perpetual boil. The intent of this fraud is theft, pure and simple. Sadly, most Americans won't wake up to the fleecing they're allowing the wolves to take from them because they are diverted by important (but ultimately non-returnable dividends) like racism, which is not marketable and has no financial capital. It doesn't create wealth; it certainly doesn't create jobs. But the Koch Bottles, to name one enormously and obscenely wealthy family, invest so much money into creating legislative fiefdoms at the municipal and state levels (ALEC, anyone?) and to stuffing the pockets of their hirelings in Washington that most people cannot see gerrymandered elections for what they truly are: corporate bribery. That it is corrupt and dishonest has no traction with the Trump "base," and too many Americans are cowed and intimidated by the complexities of tax law. It's the classic case of "voting against one's interests" because the sops and ruses the Right have employed to gull the stupid have worked.
Woe is us!
19
soxared, As you point out it is tough to see where we go from here if those most vulnerable to this fleecing are so distracted with social issues like abortion and immigration that they cannot protect their economic self interest. I do see a path, although I am not sure how likely it is to come true. The biggest source of misinformation is both FOX news and the many in congress who push the middle class tax break narrative. Trumps base will never help reverse this situation. On the other hand, there are lots of independent voters who can help alter this domination of politician speak by imposters. On the repeal of Obama care it seemed that lots of voters paid attention to the facts, pushed in part by Democratic legislators. This may sound overly harsh, but we seem to have a permanent underclass that must be treated with parental solicitude.
1
I very much enjoy Mr. Edsall's fact-based, in-depth Op Eds. Republicans are saying: "What scraps do we throw the 99% so that we can cut taxes as much as possible for the 1% without losing control of government?"
What is the tax reform we actually need? It starts with eliminating loopholes ("tax expenditures") for the top incomes. The top 1% get about $250 billion per year in breaks. The next 19% get another $500 billion/year. In other words, we could probably balance the budget over the next decade without touching the bottom 80% of the population.
Increasing the estate tax, so billionaires only have heirs that are single-digit millionaires, a financial transaction tax (the top 5% have 70% of the financial assets) and removing the cap on the Social Security tax (which affects about the top 6%) are other good progressive options.
5
republicans already know how to make the rich richer. Transfer money that helped the working class and the poor back to the already rich who have been waiting patiently to get richer while the rest of us lose health care, roads, unions, environment, the vote, and everything not nailed down. Some Americans are more equal than others under this miserable administration.
5
What? The GOP only focused on the super rich? Shocked.
I am also shocked that there is gambling at Rick's, in Casablanca.
4
Both proponents and critics of the Republican tax plan seem unable to think beyond the tax structure of the past; that’s the real concern. All proposals are just added pages and complexity to our onerous, 8,000+ page Federal Tax Code.
Let’s consider some beneficial and sensible simplifications that would eliminate hundreds of complications and thousands of pages of legal jargon.
Eliminate the tax on corporate profits; instead tax the distribution of corporate profits to shareholders as ordinary income! That would eliminate double taxation, resolve the “pass-through” issue, and give the US a competitive edge in attracting business assets worldwide.
Eliminate the estate tax; instead tax the beneficiaries! Tax distributions of cash and liquid assets as ordinary income. Reset the “cost basis” of the inherited assets to zero. That would reduce the buildup of inherited wealth without confiscating capital, and eliminate the “build-up” problem.
Place a tax surcharge on passive income, carried interest, and gains from financial gaming. A tax surcharge on economic parasites and nuisances is better-targeted than the broad-brush Alternative Minimum Tax (AMT).
Finally, introduce the value-added tax (VAT), the only appropriate, fair, and unavoidable tax on business enterprise. VAT is a fee for selling products and services in the USA market, the biggest and best in the world. In the end, VAT will be the tax that saves Social Security, Medicare, and Medicaid.
4
The Republican Party is the party for uncultured and egotistical wealthy people with little respect for their common humanity with others, and no sense of "noblesse oblige" or that by paying tax they buy civilisation. The decadence of the court of Versailles lead to the Reign of Terror and the depositing of expensively perfumed heads in baskets - and something like that could happen again. But uncultured and egotistical people tend not to know enough of history.
3
What bothers me as much or even more than the bill itself, is how the Republicans are playing us for fools. And they are not really trying to hide it. Just read the press release the House put out. By their own estimate, the average middle-class family will receive a $1200 tax reduction under this bill. Wow! They can finally buy the new refrigerator they have been coveting. Meanwhile, conspicuously absent, is an estimate of how the 1% will fare. Their example of a "rich person" is an owner of a small business who makes $500K a year. They estimate that she will save $50K a year in taxes. (That'll buy a really nice refrigerator.) You not need to be an economist or tax expert to figure out the 1% will receive tax reductions in the six figures. Calling this a middle-class tax reduction plan is one of the biggest lies the Republicans have perpetrated so far.
5
The only people they need to keep happy is their base, who doesn't get it. The people that voted for Trump overlooked a lot because they thought the media was manipulating the story. They aren't going to look into analysis of the tax plan and will buy whatever sold. I doubt they think they are playing anyone else for fools- they are just making a blatant policy choice, knowing that they can play their base at the right time, as they did with the election of Trump.
I don't blame republicans- I blame the people who voted for Trump and seemingly lack critical thinking skills.
It would be better for the Republicans to do nothing, rather than to embark on this complete theft from the people of the country to give more to the robber barons. There is a breaking point and they are on the brink of the abyss right now. Call Congress, show up at their offices with protest signs and boycott the corporations that show up in the Paradise Papers! If ever there was a time to scream bloody murder, this is it!
1
Does this new bill take away some of the loopholes and deductions that corporations have used to lower their taxes, sometimes to zero?
Let's do the math:
Currently $100 taxed at 35% will net $65, but then you add in your 35% worth of deductions and you arrive back at your $100 of income. You paid zero tax!
Under the new plan, $100 taxed at 20% nets $80, but then you add in your 35% of deductions and you arrive at $115. Even better--you made more money because the government will owe you a refund!!!!!
Santa Claus, folks, is definitely Republican.
5
Tax cuts have never been about “creating jobs” or “growing” the economy.
Tax cuts have always been about benefiting a tiny few at the expense of the uniformed and doltish many.
Which side are you on?
2
With the GOP tax plan, Donald Trump is trying to convince the “peasants” he is their Robin Hood, when anybody with half a brain should be able to see he’s really our modern day Prince John and Paul Ryan his Sheriff of Nottingham. Oh those Republicans and their “merry band of plutocrats!”
2
Trumps entire reason fro running besides taking orders from his Russian bankers is to eliminate the estate tax. btw, When are we going to hear about the billions that Trump owes to Russian financial interest? He has always been highly leveraged and NO US BANK will loan to him yet he has billions in property? Calling Mueller on the Trump line, time to bring the paddie wagon.
3
The Republican talking point is that estate taxes are unfair because that money has already been taxed. The capital gains tax exemption illustrates how phony this excuse is. After all, had the parents lived to sell the 10 million dollar investment that had grown in value to 100 million the parents would have the parents would have been taxed on the capital gains. This is a naked giveaway to the rich.
1
This whole tax bill looks like that the burglars (the very rich) with the help of their enablers (the Republicans), are trying to quiet the security guard (the middle class) with a $10.00 bribe to steal $10 million from the treasury.
2
The absolute arrogance in all this for me is that , under the current system, wealth has done quite well. What is the beef here? That they aren't making enough money? That they have some, as yet, unnamed threshold above which they will reinvest? Baloney. The motive here us 100% greed. If Trump wanted to show his plan would hurt him (or any of the others you mention), they would show their tax returns and have side by side comparisons of existing and proposed plans. But, no, we are to take their word for it. Problem is, if average Americans do that, by the time they realize what has happened they will have lost so much ground. You don't become a billionaire being altruistic. And you don't reward the wealthy by helping the lower classes. You just create plans that you say aren't intended to help the rich. When they are. They real problem here is voters who buy the lies. Then turn around and slap those beneath them when they realize they have been taken for a ride.
1
Politicians' livelihoods are massively dependent upon the "whales," the uber-rich who don't even blink in writing million-dollar checks to PACs, and tossing around their fiscal weight using $100 bills laundered offshore to a virginal purity. Politicians, to remain politicians, need these whales as much as the rest of us need oxygen.
The same is applicable to those "human beings" the rest of us call corporations.
Solutions to these maladies are difficult to imagine without another American revolution tailored after the Bolsheviks, but we have to start somewhere.
1. Repeal Citizens United, by any means possible.
2. Institute term limits for ALL politicians.
Once these fundamental inequities are properly addressed, then maybe we can begin discussing solutions to the rest of our problems.
2
Term limits is a bad undemocratic idea. Studies have shown that term limits lead to a constant infusion of inexperienced lawmakers, who then rely more on corporate and other wealth interest lobbyists to write laws and establish policy to benefit their clients at the expense of the larger public good. My representatives are long term career politicians who serve their constituencies well.
This tax plan is yet another piece of evidence that Trump isn't working for the people, but is working only for himself and his people. The proposed tax overhaul would enrich his company and increase his family's wealth, all paid by the people. I guess Trump is working for the people to work for him. Help Mr. Mueller!
1
Dear GOP why not spend the 2 trillion on infrastructure which a) we need b) will create millions of jobs c) will stimulate 20 trillion economic activity in the US d) since 50% of income goes back to the gov't as taxes and revenue the gov't will pick up 10 trillion in income which we can use to pay down half the debt. Or we can cut taxes and add 2 trillion to the nation debt. I like my plan better.
1
We know that Donald Trump is a con man along with the Republican Party are there for one purpose and one purpose only to lie to the American people about how this tax bill is going to work. IT'S GOING TO MAKE THE RICH, RICHER ! That's what they're paid to do. we just saw the start of how to change this with the wins of the Democrats across America. Our hands and not tied; go to the polls in 2018 and elect people that will bring dignity back.
1
Not to worry. Larry Ellison's children are going to sell his $130 million yacht and use the money to start a chain of soft-serve ice cream parlors. They'll hire people at minimum wage with no health care or retirement benefits. And make sure they don't qualify for overtime. But they'll have jobs, and they can go to Walmart and pump up the economy when they buy disposable diapers and Kraft mac and cheese. Walmart will hire more greeters, also at minimum wage. It will all trickle down. Everything will be fine. Trust me.
4
The only thing that make me feel good about this bill is I know it will financially crush the working class that voted for Trump.
Has there ever been a moment in our national history when the sitting President advocated for legislation from which he and his family would personally benefit? And benefit obscenely?
If this bill passes Congress with the estate tax phase out and the continuation of the pass-through provisions intact, Trump would have to sign the bill for it to become law. That is "self-dealing," otherwise known as corruption.
Yes, I am aware that the Office of the President is virtually immune from most laws that govern the rest of us, including members of Congress. But for Trump to push this bill and demand passage is not just contemptible, but also (in my view) a violation of our bedrock principle that no man is above the law.
Besides, it speaks volumes about Trump's mendacity that he would take this position. His venality knows no bounds.
3
Inheritances are just affirmative action for the rich, confering unearned benefits on the recipients. It's one of many forms of affirmative action that help the better off (legacy admissions at colleges, etc.). Typical of so-called conservatives, they love affirmative action that helps he well off and hate any form that helps the disadvantaged.
1
Finally the struggling wealthy will get a break.
1
While stoking anger at the rich is usually a Democrat past time, this particular tax, the Death Tax, certainly garnishes its fair share of detractors from both sides of that polluted river running through the Capital. I don't think anyone should be asked to have their money taxed more than once -- that is unfair and greedy. And why doesn't the Federal government, the biggest subsidy of all, the worst and most wasteful spender within our borders, significantly reduce its spending? I know that many will say that they have and are. Not enough!!
Rather than add even one percent more to any citizen's taxes, the government should be forced, forced to eat itself.
The state tax is not income taxed twice, it is new income for the heirs. The Federal govt actually does not waste much money, at least in domestic programs, which studies show no more than 1-2% waste. The military budget is in fact the most wasteful part of the federal budget, but strangely the "fiscal conservatives" won't touch that. why not take a real look at the federal budget and where the money is going?
That will make a very nice Republican campaign slogan for 2018 and 2020: "Make The Rich Richer Again Again"
1
Hardworking middle-class Americans must take constructive actions to stop Elected Politicians from self-dealings and putting self-interests ahead of ours!
Trump and his minions promised (among a laundry list of unfulfilled promises) carried interest would be eliminated, all Americans will get a tax break, he will not benefit, and he will eliminate our national debt in 8 years. He is a serial liar, knowingly aided and abetted by the bulk of his party.
A current forecast is his tax cuts will add $10+ trillion to our national debt pushing it to $30+ billion in ten years – financed through the likes of China and Russia. He will now own the full $30+ billion.
Voting one party out doesn’t work. We just get a fresh crop of self-dealing individuals executing similar strategies from the other side of the isle.
Our system is corrupt and broken. Hopefully, one day we will have trials and convictions for the self-dealing actions taken by self-serving Elected Politicians
We must find a way to hold self-interested Elected Politicians and their staffers, from both parties, personally liable, responsible and accountable for the lies they have told US, their gross mismanagement of our county, our $20.5 T and growing national debt (108% of GDP), and our $100 T in future, unfunded liabilities they forced on US jeopardizing our economic and national security, while benefiting themselves, their staffers, their party and special interest donors.
http://www.usdebtforum.com
1
In light of the Paradise Papers, do the very rich and corporations really need more money?!
1
Sheesh! The new Elephant Party slogan appears to be " $300 for you, $300,000 for me!" Ridiculous.
A nation's tax policy - as long as it is more than partially adhered to - is nothing but the definition of who makes, who takes, who gets and who keeps for a modern society. Those rules for the United States have done nothing but permit the accretion of large amounts of capital - which is taxed very lightly as compared to the tax treatment for working people over the last 40 years. Rather than "a rising tide raises all boats" mentality, our economic system has created great wealth over the last 40 years WHILE ALSO adding 18 million to the number below poverty. This is greed, pure greed. We can hide behind rationalizations like "I pay all my legal taxes!" and "Our poor are pretty well off...". Stop that noise.
The latest Elephant Party plan, do away with estate taxes, is not just greedy but unpatriotic. The Declaration of Independence established that 'all men are created equal', not 'all men are created equal and some families will have money forever'. This is not the continent for aristocracy.
I will never support any politician who doesn't see the problem of income distribution - which is solved primarily through taxation - and act to repair it.
2
SPREAD THE WORD. Trump will only be toppled when his supporters realize he's NOT helping them. They've elected a Trojan Horse. Personal attacks only compel his base to defend him. Policy is the key. The white supremacist connection might be the splashier criticism, but in the long run emphasizing the harm he's doing or allowing to be done (via environmental policies, for example) is the only way
1
How is it possible that 30% of the population is willing to believe a bunch of charlatans selling a tax plan that can only be described as "grab, grab, grab" for wealthy people. The potential $100 a month tax break will likely cost the middle class taxpayer two or three times that based on the deductions being closed.
How can they believe a pathological liar who says ""Believe me, it will cost me money." What a "tell" - When Mr. Trump says "believe me" you can rest assured a yuge lie will follow.
Most everything about the plan is a lie. Most importantly It will not add jobs - proven time and again tax cuts do not stimulate the economy. Demand stimulates the economy. Economics 101.
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5
A little confused here: Senator Wyden isn't identified as a Democrat in the photo and isn't quoted in the article. As an admirer and former constituent of his, I expected a connection between the image and the op-ed piece.
1 Timothy 6:10 "For the love of money is the root of all evil: which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows."
Funny how the Republicans with their holier-than-thou attitude always ignore this passage.
1
This Tuesday, we saw that this administration’s efforts to deceive us into believing that their failed policies would have benefited the people of our country did not fool us. The electorate is not as dumb as they thought.
If they think the proposed tax bill would convince us that it is in the best interest of the middle class and those who aspire to the middle class, think again, Mr. Ryan, Senator McConnell, Mr. President. A conspiracy of decency has only just begun.
I suggest establishing a new section of the NYT Food section, to be entitled "Eat the Rich."
After all, from a financial perspective, this tax plan effectively puts the Middle Class on the menu. Turnabout is fair play.
The Republicans have abandoned what the Founding Fathers called republican virtue which explicitly rejects inherited power. With the Supreme Court proclaiming that money is speech and corporations are people to a degree, money is power and inherited money is inherited power.
Two other aspects of republican virtue are a commitment to the common good and rejection of corruption and greed. To this observer the current Republican Congressional tax writing process is corrupt and committed to institutionalizing greed.
This is what a middle class tax cut looks like in a post-truth America.
Tax plans by and for elites, Paradise Papers detailing elaborate tax dodges by those who refuse to contribute to the society that they have most benefited from, the DNC for sale to the highest bidder. . . .
When did ideals like "the public good" and "public goods" become quaint, antiquated notions? This isn't what Schoolhouse Rock, or my textbooks, told me about how America works and what it's supposed to stand for. Was all of that stuff just lies by elites to sucker poor saps like me?
"...the value of the tax cut would grow steadily from $1.3 billion in 2018 to $38 billion in 2017."
Editorial comment - time does not go backward. I'm not sure of the year when the benefit of this tax cut for the rich will be $38 billion, but I'm pretty sure it's not 2017, as 2017 < 2018.
Essentially, 1 person gets 10 apples, and 9 people get zero apples. Then use Fox News to cynically sell the plan as an average of 1 apple per person.
5
Or one person takes nine apples and uses Fox News to get the other nine to fight for the apple.
2
The Republicans have been since Reagan the party of "tax the poor to feed the rich". They hate welfare but love defense contractors. No problems with $800 hammers but prison for someone poor getting money they may not deserve. Steal big from medicare become a governor. Steal small, time for jail.
The Household Wealth curve is getting close to the 1929 25% point. Yippee!, here we go again!
Long winded discussions about tax policy make “experts” feel smart, but it’s just rearranging the deck chairs on the Titantic. The historic trends sail on. The “optimates” and the “populates” continue their never ending battle. We learn so very slowly and meanwhile greed never sleeps.
Well written, well presented, but until you can fit it on a bumper sticker, you are wasting your time.
1
Is this (2017) a misprint? "According to the Joint Committee on Taxation, for the tiny percentage of the population that benefits from such immense estates, the value of the tax cut would grow steadily from $1.3 billion in 2018 to $38 billion in 2017." It can't grow backward, can it? Please clarify.
I think it is supposed to read 2027 not 2017.
It’s not rocket science. Ultra wealthy people want to keep their play dough. Country? Who cares? Informative article. Nice.
When the Republicans are writing tax reform the end result is not in doubt. The big winners will be their wealthy donors and the biggest winners will be their biggest donors. The big losers you ask, well they would be you and me. And the biggest losers, they would also be you, me, our children and our grandchildren.
1
And yet big money is already advertising this fiasco as a “tax cut for the middle class” with smarmy commercials about how families need this break. The big lie has worked for the GOP so many times before; let’s hope columns like this one smoke out the liars this time.
The rich get richer and richer and richer while everyone else suffers. So why do people keep voting for these people? Because they will pretty much vote for anyone who espouses a hatred of abortion, love of (Christian) religious freedom, and wants to make sure you can keep your guns. It would never really sink in that they are being used.
1
In other words the ducks who can quack got their tax cuts, the ducks who can not quack got nothing.
Tax Reform? More like Tax DEFORM!
The new, improved Tax Scam is like giving our Constitution the Finger. It flies in the face of our Republic, of the Preamble’s assurance that our nation is founded on the idea of a “Union” - a social contract. That the purpose of government includes things like ensuring “domestic tranquility” (not mass shootings!), promoting the “general welfare” (not the wealthy!), establishing “Justice” (not the Gerrymander!), “secure the blessings of liberty” (not diminish the right to vote!).
The GOP (Got to Pass ... terrible legislation) is like a lethal virus upon this nation, gradually sickening our Republic and all the social programs which should be the birthright of every American: universal healthcare, excellent public education, public daycare, a decent old age... The list goes on.
Thank you, Mr. Edsall for this and every column.
1
GOP has poor memory for history.
western history shows that "yuge" wealth disparity produces revolution during downturns. better to give up a few bucks than be burned out.
a Senator Robert Alphonso Taft GOPer whose Party left him- and Bob Taft.
1
It is time for white, educated, suburban voters to realize they have been fooled over the past few decades by the Republican mantra of tax reductions and deregulation that have lead only to transfer of more wealth to the wealthy class, economic chaos, and evironmental degradation adversly affecting the health of our nation at the same time cutting health benefits to the poor and working classes. Stand up for what is right and join me, an independent, in voting the Republicans out in 2018.
1
Of course, republicans love to refer to the estate tax as the 'death' tax. I suppose they're actually correct in the sense that eliminating it and then having to make up for that lost revenue by further reducing health care and social welfare funding will result in more untimely deaths for the rest of us.
1
I would say that the rich got richer under the Obama administration more so, than probably any of the last few administrations. He could of used executive action in relation to things related to many of those who put money offshore in the Caribbean, got rid of tax deductions for many of those $153 million in speeches that the Clintons got paid, and were deducted from those mostly financial institutions and other companies, or foundations, etc. Lawyers write laws for lobbyists who represent businesses, unions, seniors, the government, families, universities, so there isn't enough money coming into the coffers. For most of the Obama administration, we have been spending 30% more each year than what we are taking in each year. Yes, there was the downturn, caused by Wall Street, the federal reserve, Congress, and mortgage institutions who didn't see the forest for the trees, in allowing variable rate mortgages, which almost all of them failed. What academic wonders thought all of that up? Graduates of Harvard, Yale, Princeton, Stanford, etc., not minimum wage or middle class voters. No, I didn't vote for either Hillary or Donald!
1
I'm not an economist, but I do know this from observation over the last 50 years: MY situation is always worse when the GOP holds the purse strings. It always seems to me that the GOP comes in and breaks things, then complains loudly when the Dems don't clean up their mess fast enough.
I wonder how many more of these cycles the middle class and poor can handle? How much destruction can the US actually take? The wealthy can and will live anywhere. For those of us who are more or less stuck here, can the GOP be stopped before so much damage is done, that it takes years to recover, just as what happened after W?
2
I like reading Bret Stephens. Since he loves tax cuts and the Rs have lost credibility with me on this, I wonder if he’d be willing to explain the R position in terms I can understand.
It seems like it’s gotten to the point where the idea is that tax cuts are a panacea that’s good for what ails ya, whether it’s problems with supply or inadequate demand; peacetime or wartime; an era of boondoggles or an era where we’re making inadequate investments in forward looking infrastructure and failing to repair the aging infrastructure we’ve got.
I don’t see where all that follows from the fact that when Ike balanced the budget and made massive investments in infrastructure, the economy boomed when JFK then cut taxes when the rest of the industrialized world was still dealing with the fact that they spent heavily in blood and treasure to blow themselves up in a massive war.
As for the estate tax, you’d think step-up basis and special provisions for family farms combined with something like doubling the threshold level for taxation and indexing it to inflation would be enough. Sheesh.
The top 0.1% are the ownership class where their income and wealth is derived almost entirely from dividends and long-term capital gains which are taxed at far lower rates than ordinary income tax rates. Taxes on dividends and capital gains remain untouched by the Republican tax proposal.
Warren Buffet is annually paying a 23.8% tax rate on approximately 1.4 billion dollars of dividends, while the average middle class American is in the 25% marginal income tax bracket for their ordinary income. By reducing corporate tax rates Warren Buffet stands to see both the value of his stock portfolio and his portfolio dividends go up, and substantially, without any change in his tax rate. Buffet, himself, has said this is grossly unfair and counterproductive to boot.
Buffet has a conscience (he is adamantly vocal against Estate Tax repeal), but many in his ownership class and their beholden Republican representatives are the opposite. This is why you see a capital over labor - owners over workers tax plan from the GOP.
1
Perhaps it is the glasses i wear, but the reason for the Republican focused pursuit to transfer wealth to the already wealthy lies in the money the rich contributed to the armies of republican causes over a generation. If the current republican party can't return the favor soon, then they will loose future contributions for the coming generation. Wealth pinned their intents on the Republicans; the Republicans are pinning their future on their current performance.
1
When the 1% already owns 40% of the wealth, can someone explain why they need more?
2
It's crystal clear who the System is set up to reward: the tiny minority of uber-wealthy instead of the 99% majority. Is that democracy? Is that what we want? Well as long as voters can be distracted by things like religion, abortion, guns, immigration, and identity politics that's what we'll continue to get.
The system created by the Founding Father has been fully corrupted by money. They would be horrified to hear the contorted definition of "free speech" held by the SCOTUS: "Money = Free Speech", and the corollary: "Corporations are people"!
We have arrived at an oligarchy, ushering in a new Robber Baron Era. While the Greed Over People Party has led the way, the Democrats have been complicit in abandoning their once-faithful base of the working and middle class to gorge at the same trough of donors as the Republicans. The 99% need to start electing people who will actually represent THEIR interests, not the special interests. If it means launching a new political party, then so be it. Proof of the abandonment of the majority by both parties is shown by the fact that the average net worth of congressional members (as of 2102) is just over $1,000,000. Compare that to the median wealth of Americans: $44,000 (as of 2014). It's no wonder they don't represent us!
Throw the oligarchs out!
1
Income from investments, particularly in today's world where investing does not generate or even encourage production, should be taxed at higher rates than income derived from work. Nevertheless, the important question is how can we convince the Trump core that Trump's economic policies are hurting them. They certainly aren't reading Edsall, or the Times for that matter. How can we penetrate the bubble?
1
Excellent article and analysis that needs to be widely shared with those who do not read the NYT.
Its abundantly clear the GOP lawmakers are bought and paid for by the wealthy donor class who want, above all else, to NOT pay a fair share of national taxes that supports those who would benefit the most - the lower 3/5's of the economic class of voters. If passed, this bill will result in the future GOP calling for even more cuts in the social safety net as cost-reduction measures the country needs to make in its citizens.
What ever happened to the promised $1 Trillion infrastructure bill? It seems the GOP would rather give that money to their 1% donor class, who will hardly notice the difference rather than invest in America.
How can these GOP lawmakers consider what they are planning to do help out the country they were elected to govern? Its beyond my understanding!
With typical duplicity, Repbublicans promote a tax reform bill as a jobs act, as if that will help get it passed and make people overlook all the goodies it gives to the. rich. Never mind that we are already near full employment — so much so that if Congress had passed the infrastructure bill Trump promised, we’d have a tough time finding enough workers to do the projects.
As it is, the tax bill has so many flaws it may not pass, and there will be little time left for infrastructure. So much for Republicans’ ability to govern.
It all started with Reagan with his trickle down economy that rewarded the Corporations & the rich & neglected the Middle class & the poor.Then the so called "genius" Ryan found the problem in balancing the budget, get rid of so called entitlements, which included Social Security, which is not an entitlement, but if it helps the Middle Class & the poor, so it must be an entitlement.Romney spilled the beans when he was campaigning for President. In what he assumed was a closed meeting he said, " half the country are takers, & the rest are the givers" in other words we must help the Givers to retain more of their hard earned income. That in a nut shell defines Republicans..According to their ideology we must keep the rich ,rich so they can keep contributing to make our economy grow, & if necessary take from the Middle Class & the Poor to accomplish this.To justify this, to quote Mr. Ryan," the middle Class & the poor will benefit from the opportunity the country affords them ", which means take away the entitlements which will force them to contribute.This new Tax bill is another attempt for the phoney trickle down economy , that will only enrich the rich & take from the Middle Class, & the poor. We must not let this happen.
1
Sadly, in our sound-bite -driven world many in his base will accept topline exclamations from their leadership that this plan will reduce their taxes and also create a massive economic stimulus to raise their incomes without reading deeply enough (beyond 142 characters) into what is a very complex matter to see the audacity of the falsehood.
A significant tax increase on the wealthiest families in this country would amount to a statistical error in terms of their overall wealth.
Yet, significant tax increases on the very wealthy could finally and significantly help create a single payer health system, free college education nationally and reemployment of coal workers into green energy like solar and wind.
Are some of the very rich so twisted that they are in effect suicidal? Do they not realize that climate change effects us all ?
It remains baffling to me that some of the very rich seem sociopathic at best, lacking empathy to a degree that would make Caligula blush.
It should be a crime to be worth a billion dollars, much less 10 or 20 or 30 billion and spend a significant portion of this unconscionable wealth on caring for our planet and for the so many others who indeed helped create that wealth.
3
It is sad and short sided that the very wealthy do not seem concerned about the sustainability of the republic. Passive wealth accumulation has no real value to society, yet that is what they are emphasizing. And infrastructure and social services will be reduced while they build more gated mansions to avoid the unwashed that they create. Swamp building is in full force.
1
This is a marvelous recapitulation of the GoP's pro-rich tax reform impact. But it badly underestimates the negative impact. The situation is analogous to rewarding the lowest bidder with works contracts without exercising due diligence to ensure bidder competence and oversee the work. We know from brutal experience that rigged bidding losses are overwhelmed shoddy and corrupt construction losses resulting in roads and buildings crumbling after only a few years. The GoP tax reform promises rigged bidding and shoddy work.
Why analogous? Because the currently projected $1.74 billion in deficits will fuel a call for reduced spending and possibly even higher taxes on all but the wealthy benefactors of this GoP tax reform. Slashing health care and social security, the two largest budget expenditures (military is third but wont be touched) will follow along with reductions in badly needed infrastructure and other essential services. This will shift the burden further onto the poor and middle class while genrating a vicious cycle of reduced expenditure, consumption and growth.
So what we have is truly shoddy construction. The economic loss to America and non-wealthy Americans will far overshadow their losses with tax reform or the GoP projected 10 year ($1.5 billion?) deficit target.
Behind the GoP windfall for the rich is a poorly veiled assault to downsize Government. It will surely impoverish America heart, soul and pocketbook.
1
Most of the new wealth being created goes to the rich. While they took the risks and are earning their rewards, they are deciding how the wealth that exists is used. If our infrastructure is rotting or becoming obsolete, college educations are becoming unaffordable to middle and low income families, and health care is too costly, they are as much to blame as elected officials. It's not just public institutions which suffer. The private sector also suffers because they limit how capital flows, too. None of this is intentional nor considered well, it's just normal for people to focus upon themselves.
The rich are so good because they know how to make money based on their pure risk taking, gut instincts, rational intelligence, innate economic ability, courage to a act, drive, and entrepreneurial spirit. They create business and hire the rest of us, by giving them money we let them create jobs for us. This is called trickle down.
The thing about trickle down is that there's some truth to it. For example if you are a fund manager working for a wealthy family office running their money to make money, what possible redeeming quality could that have? Well, brokers selling them investments could make money, commissions they pay on trading various assets get paid to brokers, their traders probably buy coffee from Starbucks....etc...
But they are so, so good, and one of the places they make money is from big fat government contracts, so it is actually cruel to give rich people tax cuts because it deprives them of the opportunity to earn more money.
It turn out that paying taxes is also trickle down. It also give rich people something to work for, something to live for and the really big thing, a chance to exercise and show off their innate ability to make money from the government. Increasing taxes might actually have a higher trickle down impact that cutting taxes to give to the rich, because the rich will get that money anyway, so you might as well run it through the government on the way to help out the rest of us.
The change in the tax laws will merely codify the confiscation of whatever meager assets most Americans possess. The conservative alarms over class warfare and wealth redistribution only apply on those proposals that would affect the most wealthy. The U.S. economy now functions as an ever-tightening fist around the mid-sections of the vast majority. It is not just the tax laws; it is unreported inflation, it is the destruction of regulations safeguarding us against predatory practices by every business from big pharma to manufacturers of candy bars; it is privatization gone beserk with socially held assests handed over to for-profit entities, it is government "authorities" peopled by hand-picked men and women whose job it is to protect stockholders at the expense of the citizenry; it is an ocean crowded with sharks who are allowed to prey upon the public.
1
The wealthy in the U.S. don't need one more bit of help from Congress, the tax code or anyone else. The rallying cry of the middle-class should be, "tax the rich until it hurts!" No more free lunch. No more special treatment. No more believing that they're a special class.
And, if they don't like it, they world's a big place. Move somewhere else.
As usual, your column provides extremely useful information. One fact about tax "reform" that gets little mention is that every "cut" or "exemption" reduces the gov't's ability to fund programs that help people. Another fact is that illicit tax avoidance under the current scheme seems to be rampant, according to the Paradise papers. In effect, between tax cheats like Apple and the other big corporations, and the oligopoly-creating tax bill of the Republicans, the government will have no money for anything except nukes and aircraft carriers--plus the President's helicopters.
2
My Slice of the Pie
It’s not too late for the G.O.P. to have a winning tax reform strategy. Let the wealthiest 10% (multimillionaires and billionaires) fend for themselves while family wealth is restored to 90% of the population. Today the middle class have a 13.9% slice of the pie - (50% smaller than it was in 1989) and the poorer 50% of the population share 0.5% of U.S. individual wealth – a share so small that new family formation (procreation) is in jeopardy.
Mr. Trump understands that the gradual restoration of family wealth is the heart and soul of making America great again. The G.O.P. does not.
• Replace the business portion of the job killing payroll taxes with a 4% VAT - (the lowest VAT rate in the world).
• Lower the C corporation income tax rate to 8% (with no tax expenditures) but raise the tax on the expanded dividends to ordinary income rates.
• Tax nonprofits, charities and trusts at 2% of their net wealth and zero percent of income.
• Tax all estate wealth at 28% but allow a deduction for lifetime earnings reported and taxed by the IRS (to eliminate double taxation).
• Allow each taxpayer to save up to $500,000 tax free for retirement, health care or education (forcing multimillionaires to pay tax on excess savings).
• Pay a 28% income tax or reduce the rate (to 8% minimum) by 1% for each 0.1% in wealth tax (2% maximum).
• Keep the charitable tax deduction but limit it to charities that use half for transitional jobs in times of high unemployment.
1
I would love to know what Professor Furman thinks about Harvard's 35 Billion Dollar tax free endowment. Isn't that a redistribution scheme that benefits the wealthy? How many generations of undeserving students get accepted to Harvard merely because their wealthy parents and grandparents went there and donated to that endowment? Lets tax all of these huge Ivy league endowments at 50% and give the money to public schools.
I think the reason, in addition to pure greed, that Republicans want to impoverish the majority of Americans with their latest tax bill is because they are afraid of their fellow citizens. They are afraid that the 99% will band together and exercise their right to vote and throw the bums out of office that are funneling the riches of this country to the 1%. The rich are using their extreme wealth to suppress the rest of us by destroying education, health care and the environment. They saber rattle and promote unnecessary wars to send our children off to fight and die. Their children are never put at risk. And now they are demanding that their spoiled children inherit vast fortunes tax free in order to continue the concentration of the country's wealth in the hands of a few families.
The recent elections in which entrenched Republican office holders were defeated by a coalition of average Americans several of whom were women, LGBT, and recent immigrants is heartening. We need to elect people to office that have the interests of the average American and the country as their first priority.
The retention of the step up in basis without the corresponding estate tax turns the “death tax” into the “death tax break”.
There is also the issue of people, like Mr. Trump, who are in the type of business which can depreciate the capital assets of their businesses and use that depreciation to offset their taxable income. In exchange, this depreciation deduction is to be “recaptured” when the asset is sold because the depreciation reduces basis dollar for dollar, often creating negative basis for long held and/or refinanced assets like commercial real estate (a coincidence?). A step up of basis at death would eliminate all the recapture, PLUS create a new positive basis equal to the value of the asset at death that can be depreciated all over again! One can only imagine the kind of valuation games that will produce.
This just shows the cynicism of the Republicans, who called the estate tax double taxation. Now they want no taxation at all.
Maldistribution of wealth by means of the tax code is the primary cause of wage stagnation. No wonder our GDP doesn't grow robustly. The vast majority of Americans don't have the money to buy anything but the bare essentials.
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Republicans since Reconstruction have been all about the wealthy and big business. The only exceptions have been Teddy Roosevelt Pete McCloskey and both later left the party.
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The Republican bill picks winners and losers among middle income taxpayers. I recomputed our 2016 federal income taxes using the Republican bill. Our federal income tax liability would have been 32% higher. That unhappy result was largely due to elimination of deductions for state and local income taxes and for large medical expenses in excess of 10% of AGI. Since our situation will be the similar in 2018, we will have to rearrange our affairs when the bill passes. The bill offers ways: We could move to a state that does not tax income, for starters.
The whole conversation about about tax cuts to help the middle class is ridiculous - we need jobs and higher wages. I don't remember ever saying I needed a tax cut. Paying taxes reflects the fact that I'm working and making money, and I'll take higher wages (and taxes) over a tax cut on a measly salary any day - a deal which I suspect appeals to 99.99% of Americans.
"The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness." -John Kenneth Galbraith
Many here have already weighed in on the public policy question of allowing the massive wealth accumulated in big estates to go largely untaxed, and I won't pile on. But I do also wonder what kind of entitled ruling class we will create in the process.
Anecdotally at least, a significant number of those who inherit great wealth, without having to work particularly hard or to suffer through significant financial hardship before they do, bring selfish, entitled mentalities to the table. Some of them--a few notable examples come to mind--believe they are are smarter and intrinsically worth more as people simply because they are worth more on paper, thanks to Daddy's money. And given that the current tax bill would codify plutocracy, that makes me wonder whether our collective children and grandchildren will be ruled by increasingly lazy, entitled rulers with increasingly puffed up egos, oligarchs who retain power through their untaxed wealth and who pass it on in degenerating line.
Creating a long line of Jared Kushners with political power is reason enough to lobby against elimination of the estate tax, never mind its public policy failings.
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The average Trump voter does not seem to care about either self-interest or the welfare of their neighbors. They will support tax breaks for the super rich and all efforts to cut their own health care; it's the idea that appeals to them, not the reality. It is the same with the 2nd Amendment -- the right to bear arms is more important than the lives of all the children being killed, all their neighbors being shot. It is not possible to appeal to such people.
It is difficult to comment on an article such as this with all its references to esoteric policies and arcane organizations. As many people in this country, I have relied on our representative form of government to do what is best for the greatest possible number of people. How naive is that? And yet I persist. For me, the best remedy for the unfairness of the tax system would be a continuous drumbeat of dumbed down slogans. Hey, it worked to get the Republicans to where they are, a place I no longer recognize as the country on the path to where I'd hoped it would be by now.
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The repeal of the estate tax makes permanent and worsens the wealth inequality in America. The idea was to let everyone play marbles but don't let anyone hoard ALL THE MARBLES.
There are only two possible reasons for mainstream Republicans to support this type of tax "reform" which is designed to further enrich the rich: (1) Ignorance of the short term results of such activity on the average citizen and long-term results on the US polity, or (2) Absolute corruption in which votes are sold for money - either campaign contributions or cash-in-fist, both of which are nearly the same thing. This is the question to ask all Republicans: Have they have sold their souls to the devil? This type of legislation should not get a single vote from a rational voter except for the 1% who are laughing as they buy larger wallets.
What’s the big surprise ? What’s the big shock ? The wealthy , rich and powerful always win in the end , especially in america . Next case !
The GOP's philosophy of pulling yourself up by your bootstraps does not apply to the super rich, who apparently are entitled to the biggest handout of all.
It's like this tax reform bill was specifically written to help Donald Trump and his children. If only there was some record of how much he paid in taxes over the years that we could all consult...
This tax plan will fail without major revisions. the Club for Growth wants even bigger cuts for the tippy top and the moderates are afraid of falling into the big hole in the deficit.
The republicans will enter election year with no major accomplishments except, of course, proving to a stubborn base that they have no idea how to govern.
Utterly reprehensible. Many politicians leverage their positions and become wealthy while, at the same time, many of the rich are becoming politicians -- a vicious cycle that disadvantages mostly those already disadvantaged. It is, therefore, easy to see how and why both parties (i.e., politicos and the wealthy) conspire to increase their fiscal health at the expense of the 99%. It is high time to recall all elected officials who do not put the well-being of American people in the 99% before their own greedy self-interests.
Unfortunately, the pain for the elderly, moderately affluent and middle-class taxpayers will only get worse because the pillars of this tax scheme are mired in sand, not bedrock. The failed theory of trickle down will be tested again and if as before it fails to produce the hoped for largess you know who is going to pay for the 1.5 Trillion dollar scam? Of course it will be entitlements, ie. SS and Medicare. That has always been the dream of the Ayn Rand Branch of the Republican Party,headed by the smirking face of her leading acolyte Paul Ryan. With that end in sight nothing else matters.
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Not only are the Republicans giving a huge gift to the children of the wealthy, they are guaranteeing that the middle class will have no money left to pass to their children. We will have higher medical costs, higher taxes - losing deductions for state taxes and mortgage interest - and targeted reduced 401(k)s and even Social Security. All the savings and assets that might now go to our children will be spent to make up for the increased expenses of this bill. It will go to the children of the wealthy instead of the children of the middle class. Remember Trump's promise to his backers right after the election - that he would "take care of" their taxes. And so he has, and so has Paul Ryan. Despicable.
How rich do rich people need to be? Where is their sense of community and compassion? Where is there honesty like Warren Buffet about the fallacy of tax cuts to the rich creating jobs? Where is their shame about hiding money to avoid paying taxes that support roads, services, defense, science, medicine? Oh, I forgot... they have their own God that says they deserve all the wealth they can accumulate because they are righteous.o pay our taxes are All of the rest of us who don't hide our income are just undeserving and unfavored by their God.
It totally bewilders me how anyone can have so many houses and walk past the poverty that unavoidably stares us in the face each day. Oh, I forgot, they shade their eyes with anti-poverty glasses like the rest of us wear sunglasses.
This is not the America I grew up in, and it is not the America I want to bequeath to my grandchildren. Tax cuts for the already rich at the expense of the struggling middle class will not build this country. It will only help it to slide further into an America none of us can prosper in.
Why should the wealthy be taxed at a higher rate than anyone else? Because wealth is power. As the powerful become more powerful they control all aspects of life, entertainment, media, education, politics, and ideology. when that happens Democracy ceases to exist. The Republicans want you to believe that Democrats want to tax the rich as a form of punishment. Republicans claim that Tax cuts spur economic growth. The following is a synopsis of the economy during the Reagan administration: "Prior to the current recession, the deepest post-World War II economic downturn occurred in the early 1980s. According to the accepted arbiter of the economy’s ups and downs, the National Bureau for Economic Research, a brief recession in 1980 — lasting only six months — and a short period of growth, (sic) were (sic) followed by a sustained recession from July 1981 to November 1982. The unemployment rate hovered between 7% and 8% from the summer of 1980 to the fall of 1981, when it began to rise quickly. By March 1982 it had reached 9%, and in December of that year (sic) the unemployment rate stood at its recession peak of 10.8%. The jobless rate slowly receded over the next few years, falling to 8.3% by the end of 1983 and to 7.2% by the 1984 presidential election. The unemployment rate did not fall below 6%, however, until September 1987."
Eliminate the estate tax; instead tax the beneficiaries! Tax distributions of cash and liquid assets as ordinary income. Reset the “cost basis” of the inherited assets to zero so that the profit or loss from the sale of the assets will be properly taxed. That reduces the buildup of inherited wealth, eliminates “step-up”, but avoids the confiscation of capital.
Place a 15% tax surcharge on passive income, carried interest, and gains from financial gaming. A tax surcharge on economic parasites and nuisances is better-targeted than the broad-brush Alternative Minimum Tax (AMT).
Finally, introduce the value-added tax (VAT), the only appropriate, fair, and unavoidable tax on business enterprise. VAT is a proper fee for selling products and services in the USA market, the biggest and best in the world. It is a consumption tax; so is the tax on corporate profits. But VAT is an equitable tax on products and services, not fictitious profits. It brings in lots of tax revenue. It can be readily tuned to the economic environment.
In the end, VAT will be the tax that saves Social Security, Medicare, and Medicaid.
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A VAT may be a wonderful solution, but it does not appear to be a constitutional one (see Article I, Section 9 of the U.S. Constitution, which explains why it was necessary to add an amendment to the Constitution to allow the Federal Government to collect taxes on income).
Eliminate the estate tax; instead tax the beneficiaries.
This is actually a great idea. It won't fly with the Repubs but you would create the 3rd rail of wealth. You touch it, you get taxed.
99% agree, with one minor quibble - lower income people should receive some amount of rebate on the VAT since they consume a greater proportion of their income.
I say this as someone whose household has a significant amount of income that would be subject to your "finance" surcharge. I value a stable society more than some tax dollars and I don't plan to leave my kids an inheritance in any case (Let them learn to be productive members of society and pay their own way!)
The GOP "reform" proposals are being touted as both tax cuts and tax simplification, while the details show clearly that it's really all about the cuts, skewed dramatically toward the extreme top. I'm all for progressive tax rates, but given the current climate I'd settle for legitimate tax simplification. And as another GOP goal is the establishment of a national religion, that offers an example that might lead to true tax code simplicity, one that I am certain when the math is done would also go a long way toward funding the government at the level required to address our pressing issues - tithing. Let's make it a no-brainier a (highly appealing approach in our country today) - every single tax entity (corporations, partnerships, individuals, estates, trusts, religious organizations) pays 10% tax on every dollar of earnings, including income (regardless of type and source), estate inheritance, and capital gains. That's simple. Let's do the math - I think we'll be pleasantly surprised. And who can argue that it isn't fair? Certainly not the wealthy.
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You're asking for a flat tax. There's plenty of analysis that's been done on it and it's much larger than 10% (closer to 30%) to cover expenses. Flat taxes are also inherently regressive. There's a floor on basic living expenses, such as food or rent, that represents the basic cost of just staying alive. For people on the low end of the income scale, that 30% tax plus the floor living costs can chew up so much money they have little left. That's bad for the economy because they then have limited disposable income to spend in the broader economy. And people on that end of the income scale represent a large percentage of the population. Flat taxes are an awful idea when income inequality is high; it just concentrates wealth even more at the top.
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Flat taxes are so easy and simple and sound great. But they are one of the least fair methods to tax. A person making 25k a year needs every dollar to survive. A person making 5 mil a year can suffer through on 500k. From 1932 until 1980 the highest marginal tax rate (the one the wealthiest 1% pay after their first few hundred grand) ranged from 63% to 94%. It's no coincidence that during this period we paid down our debt, paid for our wars, AND built an enormous infrastructure. 50 years of GOP tax cuts have created the majority of our debt and left our tax base so empty that we can't afford to educate our kids properly. But that isn't an accident either, ignorant people are easier to sway in the voting booth.
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Thank you for making the differentiation between between income and wealth. While income inequality is a feature of our time, a truly progressive tax structure would mitigate its effects. The history of tax legislation since the Great Depression, starting even with JFK, has been the dismantlement of the redistribution of piled-up money that is always the product of an unchecked capitalistic system. And while one can well argue that the top rate of 90% that JFK inherited was too high and that the overall economy would benefit from lowering that high rate, no evidence exists that lowering the current rate would benefit the overall economy. In fact (Kansas) the evidence is to the contrary.
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Alas, the Democratic party seems reluctant to support the progressive wing of their party that seeks higher taxes, higher minimum wages, universal health care, and taxation policies that would help limit the wealth disparity Mr. Edsall points out in this article. But what is particularly distressing is the DNC's reluctance to speak out against the billionaire plutocrats because it is "too divisive". The economic divide, meanwhile, widens even more... and my hunch is the plutocrats are helping both sides and encouraging them to avoid discussion on the divisive issue of wealth disparity.
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That's because the DNC has become the center right party of our country, while the GOP has moved to the 1925 Germany pre-fascist position. Which is why Bernie (like him or not) was a liberal and an Independent but not a Democrat. Makes you think, where is the liberal party? Maybe someone should throw one. I think a lot of people would come. I would.
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In 2013 Thomas Piketty's book, "Tax on Wealth Capital in the Twenty-First Century," was published in French, and in 2014, it was published in English. At the time it got a great deal of attention from commentators. In large part it attacked the inequality of wealth throughout the economic system. The GOP now wants to increase the disparity in the United States--already existing at an unacceptable level--by eliminating or substantially reducing the estate tax. It would help to revisit and be guided by Piketty's thoughts on the matter.
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We had a preview of these tax cuts in the Bush administration. But back then, the reaction was muted. Democrats weren't campaigning against the outrage of the estate tax repeal. Other than on the opinion pages, reporters weren't pointing out that Bush gave him and his peers a huge tax break. Obama sought to avoid conflict by letting Bush's tax bill expire of it's own accord, supposedly to not hurt the recovery, which in effect appeared to buy into the lies Republicans were making about it's merits. There was no pushback. No outrage. No pointing out what could be done with the money that would have come from the estate tax. No national dialog.
So while I am happy that the Democrats and media have finally woken up, I still wonder what took so long.
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There was pushback--the GOPers screamed that Obama rasied taxes in 2013, when he let the Bush tax cuts expire. But this was too little, too late.
Two reasons. Obama realized he had a finite amount of political capital. He could fix the economy or fight the GOP, but not both. He was probably right and made the right call. 2) The GOP has moved further and further right since Reagan to the point that the people in the WHite House now literally couldn't get interviews when GWB was in the White House. Nature abhors a vacuum and the Clintons took the DNC to the center and even a little beyond to the center right in places. Which is why so much of the Hillary platform sounds like the Bob Dole platform. And it explains why liberals like Bernie aren't in the DNC, because they see it as part of the problem too. And after the Brazil book everyone on the left should.
Trump supporters are starting to experience cognitive dissonance over this tax "reform" proposal. At first they will initially reduce their dissonance by arguing this is "fake news" and "anti-Trump pseudo-science".
Their dissonance will grow as the bill's effects become apparent. At some point they will reduce their dissonance a second time by deciding "The GOP establishment corrupted Trump to supporting this bill" or "Trump is being manipulated by his advisors Kushner, Greenblatt, Epshteyn, Mnuchin, Friedman, Miller, Eisenberg, Glassner, Icahn, Cohn, Shulkin, Cordish, Berkowitz - those people..." or "Trump is being drugged by ..." or "Trump has been secretly replaced by an actor controlled by ...".
The third stage of dissonance reduction will involve "Trump lied" or "Trump is a con artist" or "Trump ran for President to increase his wealth".
At which point there may be a violent reaction to Trump and the GOP by his past extremist supporters.
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“Until they became conscious they will never rebel, and until after they have rebelled they cannot become conscious.”
― George Orwell, 1984
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1930 - 1980 was the age of Roosevelt, where the ethos was that it was unfair for the very wealthy to take from the middle class and the poor. The age of Reagan, starting in 1980, changed all that, and we are still living with that ethos today. The people who voted for Trump erroneously believed that he would change that trend, because the Republicans are so good with divisive propaganda.
The voters need guidance. If we can establish an addition metric in the CBO score that analyzes every piece of legislation's effect on income inequality, Americans would more clearly see that in every battle between Democrats and Republicans, from Social Security cost of living increases, to tax rates, to health care policy, the Republicans consistently legislate to increase income inequality. Democrats have attempted to slow the trend but were outgunned in an era that demonized compassion and fairness.
Republicans have policy disagreements that are visible right now, but over the last 40 years, the one thing that has united them is a legislative agenda dedicated to increasing income inequality.
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Since Tax Break loopholes are larger than Discretionary Spending, it makes more sense to eliminate the reduced tax rate for capital gains. Corporate taxes generate 2,000 times less revenue than does payroll taxes. The middle class alone is funding this country's debt. Taxing capital gains fully would greatly reduce the federal deficit and more readily equalize the distribution of income.
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Agreed. Money moving into the bank is income, period.
Were you alive in the 70's? Any fair elimination of capital gains exclusion would need to be replaced by an indexing of basis for inflation.
So much for simplified tax code. And wealthy folks will still have their accountants and advisors to optimize their rate of taxation. And concentrate even more wealth.
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My family’s taxes will go up considerably if we are no longer able to deduct all or some of the following:
-Mortgage interest
-State and local taxes
-Job hunting expenses
-Medical expenses above the allowable percentage of adjusted gross income
The elimination of these deductions will more that offset any benefits that we get from the Republican tax plan.
Who is being hurt by this plan? Middle-income taxpayers who own a home, pay state and local taxes, have heavy medical costs, and who are looking for work.
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and don't forget families with children! a modest increase of the child credit is never going to make up for the loss of the personal exemptions, which currently apply to all dependent family members, whereas the child credit does not.
I understood the Republicans intended to eliminate the estate tax, but this is the first time I have read they intend to retain the step up in basis for appreciated assets. That changes their proposal from a giant gift to the rich into a monstrous attack on liberal democracy. It effective removes any obstacle to the formation of dynastic wealth, and together with Citizens United, would be a catalyst for the rise of a permanent two-tier society in which one segment of the population works and the other rules.
Both the Bush and Obama administrations enacted increasingly higher estate tax exemption levels. Although this Republican plan obviously goes much further, both parties have been working to weaken the estate tax for decades, to the exclusive benefit of the rich.
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Right! The estate tax is a European contrivance to prevent the building of family dynasties. A rational alternative is to tax the heirs, not the dead person's estate. The heirs should pay income tax on distributions of cash and liquid assets. Inherited property and investments should be reset to zero cost basis to be taxed fairly without confiscation of capital.
To be fair, although Obama did raise the estate tax exemption, he did that as part of a compromise to keep the government open and put a cap on defense spending while preserving spending on Medicare and Medicaid. He didn't unilaterally seek to raise the exemption on estate taxes, he just agreed to that Republican proposal as part of a broader budget agreement that ended up being quite good for the economy and stock market.
1
Personally, I will benefit from this tax proposal, but, in the long run, as with the Bush tax cuts, there will be a reckoning, either at the polls or in the markets.
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This tax-bill through lower rates and a 5 year window to "expense" improvements will accomplish the following:
1.) Enhance shareholder's values through dividend increases and stock buy-backs.
2.) Encourage industry consolidation and "duplicate" job elimination.
3.) Along with "regulatory relief" (in the 9th year of a bull market) add the frothing that often occurs before great mistakes are made (irrational exuberance).
4.) Accelerate job automation and elimination via "expensing" of new equipment purchases.
5.) Do nothing about lack of demand for assets (new housing for example) that individuals at or below median income levels can not afford. Cash on corporate balance sheets is not the current problem.
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Corollary to 1. By increasing share buybacks and dividend increases, it gives a short term boost to quarterly performance, the overwhelming method of determining (and increasing) executive compensation.
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When the wealth accumulation by the richest exceeds societal norms there only a few outcomes. One outcome is revolution. The more common one, however, is economic collapse. The gilded age ended in a vast economic disaster. This portion of American History is usually skipped in courses because the Civil War and WW1 consume disproportionate attention. The stock market collapse after the roaring 20's gets more attention, but the gilded age collapse might have been even more severe.
People accumulate weatlh, primarily in America from government procurement. They then seek to invest that wealth. They then employ people to invest the remaining wealth. These people are measured over very short time spans. If they don't chase the latest financial development, their clients will seek greater returns elsewhere. In the recent real estate finance market collapse, the rich people hired investors that created whole new ways for people to lose money speculating. Brought down the whole economy, and we may finally have dug ourselves out.
Time to start all over again.
When was the US economy growing fastest? 50s-60s. Tax rates for the richest we 70%-90%. Eisehnower built the interstate highway system and Kennedy-Johnson put a man on the moon.
Low tax rates foster the accumulation of vast wealth, and its loss in general collapse. "For the love of money is the root of all evil." Turns out to be good economic policy.
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John in Boston: Yes, a time for despair. I might add that another phase needs to be accounted for, at this time in our history: money "hides" now all over the world, in collusion with amoral and apolitical "others". When that phase of shielding wealth plays out, and revolution occurs everywhere, real, long-term hurt will be spread over the entire world. Couple that with environmental/climate catastrophes ... well, you can see where I'm going with this.
Where are the good hearts and minds to discuss the solutions?
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John, so true about the Gilded Age. Here is what I fear: it is possible the minions will arise-- it happened in the French Revolution, the Russian revolution, and even one could say in the USA labor movement of the early 20th Century which was pretty close to revolution. The problem now is the enormous fire power of the government-- be it federal, state or local. I think they would shut down anything even mildly approaching rebellion in a heartbeat, and then declare martial law-- from which we might never recover. Sadly, the under-educated trump/pence/GOP supporters and the brain-washed fox watchers would be on the side of the destroyers of rebellion, not the rebels.
1
This is flat out class warfare. This is a tax bill designed to benefit the Trump family and like everything so far in his take over of our government it is the very opposite of what this nation needs which is a massive tax hike for the super rich and a closing of the loopholes which benefit only the rich like carried interest and a lower rate for income based in work and a higher rate for income that requires no effort on the tax payer's part.
If there is one disclosure that would blow up this GOP war on the middle class it would be Trump's tax returns for the last 5 years. Trump would rather go to jail for contempt of Congress before he would obey a subpoena to produce his returns for examination. Allowing Trump anywhere near tax policy while he hides his own return is a moral outrage and should become a political outrage.
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Maybe some day soon, the entire human race will be homeless, starving and also constantly walking around on private property; that is to say, felony trespassing with special circumstances, because the Trump family will end up owning 100.000000000000000000% of every single thing, including all the land, and the seas and the air we breathe, which will no longer be ours. If one of Trump's poorly paid employees were to share his one slice of bread with one of the starving masses, then he will have betrayed the Donald, and set us backwards down that evil, evil road to socialism.
1
Are you tired of all this winning yet?
Just how much swamp has been drained?
We have seen only one year's tax returns from Trump, but the tax cuts seem to be directed primarily for the "only one that matters".
Interesting phrase, "I am the only one that matters." Sums up Trump's foreign policy. It also sums up Trump's domestic policy. His calumny of Jeff Sessions over the Russia Collusion investigation shows, "I am the only one that matters." His tax policy also shows, "I am the only one that matters."
Nobody thinks these tax cuts are going to help economic growth. We already did this experiment twice and it doesn't work. That's NOT the reason for these tax cuts.
Nobody thinks cutting corporate taxes will lead to wage growth. The increased profits will go into executive compensation, first, and then shareholder dividends. Corporations get sued if they don't put investors ahead of staff.
Nobody thinks cutting taxes on repatriated profits will increase repatriation. Corporate inversions and the off-shore banking practices revealed in yet another leak of overseas banking show how the wealthy bank.
Nobody believes this is a middle-class tax cut. Some tax rates are going up. Where? Lower incomes.
This is a tax cut for the least needy. The least needy ever.
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From the moment Republicans started "tax reform" it was a foregone conclusion that the "tax reform" would benefit primarily the very wealthy. What is still quite surprising is just how heavily skewed, how egregiously biased their "tax reform" is in favor of the very wealthy. Republicans "tax reform" favors corporations over individuals. It favors income derived from capital over income derived from work, i.e. labor wages. It favors the wealthy, and corporations, and to offset only a portion of the revenue loss it raises taxes on the working class and middle class, the very voters who elected Trump. At least this is not surprising - that Trump has turned on those who supported him, that Trump and Republicans are taking from those who have supported them to give to those who fund them. The final surprise is that there are still 30-some percent of voters who still believe Republicans dog-whistle distractions and 'wink-wink' despicable policies will be better for them. It seems that bigotry, racism, and fear trump (pun intended) their own self interest, and certainly their patriotism.
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That 30% only listen and believe the lies coming from Trump and his cohorts who say that this tax reform is for the working people of the nation. They are not the most objective lot, are they?
I"m not surprised. The GOPs have been waiting for years for full control so they can reward their paymasters and themselves. They've been advocating similar policies all that time; it's human nature to go even further when opportunity suddenly opens up.
Its pretty complicated isn't it? I wonder how you explain this to the unemployed coal worker. You can either say "tax cut for the middle class" or " make the rich pay a fair share". Someone is lying, right? Why don't we make it a crime for public officials like senators and representatives or presidents to lie. Make it a jail-able offense with minimal requirements, like it has to be a lie to one with a 5th grade education. I know that most people with lower income, hate taxes but they hate payroll tax not income tax. Income tax is hated by the wealthy. So why don't we address that? How much more money do you need after the first billion? How about a guarantee that the tax benefit is partially refundable if you or your progeny go bankrupt? How about a deduction for voluntary contributions to the public debt with public recognition of the contribution, like plaques or statues or some such in public places? Of course honor might induce some to contribute autonomously.
I still don't believe that economic activity will be helped much by tax breaks for wealthy especially estate tax, or if it does it will be "Life is Good" caps or "Sponge Daddy" sponges or I-Phones. I despair.
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Oh gosh, if lying were criminalized, Trump would spend his presidency in court, since 69% of what comes out of his mouth is a lie. The coal miner, the laborer, most people (if I think about it), don't research any legislation, they wait for the sound bite--which is a lie--then convince themselves it is reality. This was evidenced in Kentucky with the ACA. People had no idea what it was, just they were against it. Until someone actually walked them through and they realized their legislators were lying to them. They could actually get affordable health care--sometimes for the first time in their lives. But did they vote out the idiots who lied about it? Nope.
1
Tax in America and the wealthy 2017?
Insofar as Republicans in America are typically associated with the military, religion, constant calls of patriotism and self-sacrifice, there seems a clear contradiction between this leaning and relentless capitalism to point of libertarianism and the extremely wealthy not only rising with dramatic inequality above the rest of Americans, but seeming to increase distance from America itself, demonstrating a breakaway psychology from the rest of Americans to point of everything from private and distant and even overseas estates to tax havens to private jets, yachts, desires to go into outer space.
Democrats seem to have more faith in humanity, seem to want to level things more fairly, bring proportion to the country, but there is no question something of deeper psychology is working over the country, a deeper psychology than simple animal spirits and like psychology commonly spoken of with respect to economics, but a deep psychology of fight or flight, a desire for control on one hand to point of vast military and law enforcement and moralizing whether this means religion or political correctness, and on the other constant escapism, flight, whether this means drugs or mindless entertainment or the wealthy seemingly trying to bail on the country entirely at a moment's notice, ideally by tax haven and home in outer space. It's easy to paint America's problem in material and economic terms but deeper is the question of faith in ourselves.
13
Just because they are rich doesn't mean they are happy. It was reported that a national chamber of commerce declared the proposal as class warfare against the rich because they didn't get everything they asked for.
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The most pernicious part of this tax bill is it's intentional underestimation of what it will cost. In calculating the 1.5 trillion dollars cost over ten years the GOP used growth numbers that were fictional and simply used the cuts in bracket percentages and fixed figures like the elimination of the estate tax to calculate the revenue short falls.
They intentionally omitted the impact of all the corporate and individual loopholes that were left in tact. So when corporations and wealthy individuals file their taxes they will start form a lower nominal tax rate AND add dozens of loophole deductions.
This 1.5 trillion cost could easily become 2 or 2.5 trillion. When that happens the very same politicians who are not now concerned about the deficit will pop up and declare the need to slash social spending yet again to fill in the gap created by this tax give away to the elites.
Democracy, with all its flaws still exercises control over government. The EPA, federal land management and the CDC are but a few examples. When those agencies are cut and or privatized much of that democratic control is gone.
The GOP has gone back to its Reagan revolution. Cut taxes for the rich, give corporations a free ride and dismantle government whenever and where ever you can. For the rest of us, we get what we can pay for in the market and if we can't pay, we are simply out of luck.
18
When you add in the removal of deductions for high health care costs, adoption, teachers' school supplies, and state and local taxes, this tax bill looks like it's nothing more than an attack on the middle and upper middle class. Removing these is hardly reducing complexity in the tax code, because these have always been optional. Taxpayers could always simply not take them. The IRS doesn't force anyone to itemize or take these deductions.
If this passes, the loss of revenue will hit everyone. Where will we find money for roads, disaster response, education, veterans, the elderly, etc. if all the money is held by fat cats on their yachts. This is how the US will spiral downward into historical oblivion. Having a deeply entrenched wealthy elite is not the way countries grow and prosper.
56
Q are those yachts made in the USA?
Even if they are, the toys of the superrich do not fuel an economy. Consumption of large, board based middle class does that, and when the middle class is destroyed, so is the economy.
You wrote "the super wealthy, a class that in recent years has acquired a growing share of both income and wealth." You left out power,it's a class with a growing share or wealth and power. The rich have the power to make sure the tax law favor them, and these changes are only the icing on the cake. It's enough to make you ask where is Gus Hall when you need him?
26
And the chart displayed in the article only takes into account income (an extrapolation of wealth measured by income tax) in 2012 (so it's five years outdated).
Thing is, most of the wealth produced by society as a whole doesn't take the form of income but the form of capital. If you take that into consideration, then inequality is much higher: the three richest American individuals (that's three people), have more than half the poorest Americans (bottom 50%):
(Bill Gates, Jeff Bezos and Warren Buffett are wealthier than poorest half of US)
https://www.theguardian.com/business/2017/nov/08/bill-gates-jeff-bezos-w...
10
I agree with Edsall on the corporate tax rate and pass through provisions, even though I would benefit from those, But I vociferously object to his comments on the estate tax. As someone whose children will owe significant estate tax under current law despite extensive planning, I say leave my family alone. I spent (so far half) a lifetime getting a top education, working hard and accumulating assets not for me, but for my family, for my kids, so that although they have found their interests and achieved academically, financially they won’t have to struggle as I did. To be blunt, I earned it and paid tax on it and should be able to do as I please with my own post tax money. Once again, the government needs to get its grubby hands away from interfering with my family. It’s not your money.
So you have an estate over 10 million? unless it is over 100 million you should not even need an estate planner to save from paying the Death Tax.
btw almost all great societies that have flourished, restricted the inheritance ability of families due to it's need to keep their economies from becoming top-heavy and collapsing.
2
To DRS New York,
On the estate tax that you want to eliminate: Right now a couple can pass on $14 million with no tax; an individual can pass on $5.5 million -- not bad (and there is no capital gains to pay). You can also gift around $11,000 a year to as many individuals as you want, tax free, and you can employ your children and pay them sizeable salaries. If, after this you think they would be in bad economic shape by having to pay taxes on your estate beyond this generous amount, then think of the condition of most Americans -- who defend you, work for you, clean your streets, etc. --mostly at very low pay and often with few benefits. What sort of society do you want to live in?
4
But it is our money. You benefitted all your life from our money and we want some of it back.
1
Our "one person, one vote" electoral system has rapidly become a "one dollar, one vote" system. If we don't fight the Republican desire to turn us into Russia, with their slavish devotion to the billionaire oligarch class, we certainly will be a pretend democracy, just like Putin's Russia.
Oregon, my state, has adopted vote by mail for all elections, state and federal. That stops voter suppression, and when the poor and middle class regain their power at the ballot box, this slide to banana republic income income inequality will stop.
Work for electoral change and vote by mail, and restore "one person, one vote". K street needs to put in its place, and the voice of the people especially regarding fair progressive taxes needs to be heard.
Hugh Massengill, Eugene Oregon
23
This worthwhile read reminds me of a maxim I am aware of concerning any policy supported by the most wealthy in America. Does it tend to increase their wealth and therefore exacerbate inequality (.87, wow), or is it neutral or negative, reducing or at least not widening inequality?
If the former, then the policy is supported by the uber-rich only because it benefits them. If the latter, take a closer look. The policy might contribute to the social good and have a little old fashioned patriotism lurking behind it.
Turns out there are better ways to evaluate the love of country of the uber-rich than their disapproval of black men kneeling for the National Anthem.
6
I wish someone could calculate the number of family members of NFL players who have served as police or military and compare (even per capita) to the NFL owners. That would be a better indication of who most honors the flag and its ideals.
2
This reminds me of the song "Ain't we got love". "The rich get richer and the poor get poorer". I think it was a song that was written during the Depression. It should be revived now to remind all of us that this is what happened when the Government favored only one class of people. And also what happened to the Stock Market then. It crashed. I this what the Republicans want to happen to our Country all over again. We just got through the Great Recession. Apparently that was not enough for the Republicans. They think the ordinary citizen should suffer more. What a sham this Tax Reform is. At least one of the people you list, Warren Buffet, is not in favor of having the wealthy get wealthier at the expense of the regular everyday worker. A billionaire with a conscience. How refreshing.
11
So, the children of the poor are told to work harder, while the children of the rich are handed more, regardless of how hard they work. Could this possibly be any more un-American?
106
I feel sorry for young Baron Trump....maybe his Mom can take him back to Europe and live on a farm where he can learn some real life skills after the 3rd Trump divorce. Poor kid deserves a chance at a real life. His step brothers did not turn out well, and who wants their kid to be another Jerrod Kushner? Dysfunctional families = the gift that keeps on giving generation after generation.
1
Thank you for the straight dope data on what the tax bill would do. Here's the problem: I can't show the front, most impactful chart to anyone I know. They won't understand it. Sure, they will see the tiny gold bars of 2027 compared to the blue 2018. Percent change does not register with the average person. Because so much of the information is put in terms like this, unpacked for what it means next year, in 5 years, in 2027, the chart is not only meaningless, it breeds suspicion and hostility in people who we really want to understand and speak out against their being taken to the cleaners yet again.
I look forward every week to reading Mr. Edsall's deep research every week. That said, why do I have to wait until Thursday? With these issues so very critical to every citizen, there should be hard hitting coverage of every topic covered by Mr. Edsall today and in different ways of talking about them targeting the interests and abilities of every aspect of the electorate.
For that failure, I hold the NYTimes responsible. It's the least you can do after the utter failure to cover Sanders in the election amplifying the DNC's handing over of the election to Clinton and the polling failure to accurately report how the electorate was leaning and contributing to complacency in voters, both of which contributed to trump now sitting in the white house.
Thank you for hiring Mr. Leinhardt, you need to look further to find a conservative voice of equal caliber.
2
Thanks. I feel like my brain is on overload, and not in a good way.
The obvious solution is to pass laws that prevent the extremely wealthy from buying our politicians, starting with squashing the super PACs.
Then enforce them.
16
I say leave the estate tax as is. I think a very big portion of the voting constituency in this country would find some humor and retribution in the fact that when Trump is on his death bed, first and foremost on his mind will be that finality is going to cost him big time.
3
I've long thought that our democracy had turned into a plutocracy. Now I fear we're moving toward a kleptocracy. Trump, his Cabinet and many others in the 1% are acting more and more like Russian oligarchs, their wealth acquired at the expense of ordinary citizens, much of it hidden from the tax man and used to dictate the rules of government to a tame Duma (Congress). This $2-plus trillion tax giveaway to the oligarchs is just another step in that direction.
27
It's not terribly surprising that the benefits go mostly to the rich and the costs are borne mostly by the poor. What always astounds me is the fact that the poor keep voting for the politicians who propagate this inequity. At some point people get what they deserve and that's the tragedy that often goes unremarked.
11
When you consider the egregious LIES being told daily by the President, his cabinet of millionaires and billionaire, the corporate WSJ, Fox "news" and Republicans in Congress, it is not surprising that people who are just scraping to get by vote the way they do. They do more wishing and hoping than reading and despairing. It's also why people buy lottery tickets.
3
First a HUGE tax-cut for billionaire businesses and individuals -- essentially paid for by cutting SALT and mortgage deductions from the middle class.
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Second those "gifts" to the 1%'ers causes a huge balloon in the deficit.
.
Ryan and the GOP demand drastic cuts in SS, Medicare and Medicaid in order to HEAL the deficit.
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Finally small businesses begin to close since their customers have less to spend ...and the economy spirals down the drain as the 1%'ers "sit on their hoard" of dollars.
.
Looks like Putin wins again
6
It is as if the Republicans in Congress looked at growing income and wealth inequality and said, "Inequality is good! Let's have more!" The aristocratic class that they are helping to reestablish possesses, through the GOP, wildly outsized power as well as outsized wealth. They have, as a group, little understanding or sympathy for people who are not like them, as their demands for "relief" from the estate tax demonstrate. They also have little loyalty to the United States, as their "offshoring" of income shows. They are a clear and present danger to our democracy's just as President Trump is. These masters of the universe must be brought back to the earth the rest of us live in.
7
The GOP is doing this to promote the slogan "It's nice to be rich".
Great piece!
But maybe let's start this discussions at the beginning.
Supporters of tax breaks for the wealthy argue that "they are the ones paying most of the taxes, and should get more of the 'relief.'"
So, what are taxes all about?
We should make it clear that they are not penalties. They are dues for living in a society such as ours. And we as a society, through our government, have to try to guide that society as best we can. Sure, total social engineering is a counter-productive goal, but gentle guiding, or "nudging," as our recent Nobel laureate calls it, does work. A good tax code nudges us into good social behavior. Some have been lucky in inheriting or making buckets of money. That should not simply be taken away from them. But for most, their windfalls are a product of glitches in our economic system -- monopolistic organizations, loopholes, luck, good guesses, and even misfortune of others. Our tax code nudges us back to a more balanced society. The rich can remain rich. They just give back some of their fortunes to the society that provided them the means to have such wealth. Taking money from sick people (end of med deductions), from students, and from families living in expensive cities are the wrong nudges. You don't need a Nobel laureate telling us this.
Shame on those supporting these anti-social proposals!
14
Nice analogy; if only it really worked that way. I haven't felt much nudging lately, and my ACA policy costs 5x what I paid before for the same unusable coverage.
In any case, the revenue from estate taxes is minuscule in terms of the total of government revenues, so this issue is overblown. And since Democrats are bound to take over the government in 2020 they can repeal all of this.
This is a boon for red state voters. Many plan on making a fortune by winning the state or Powerball lottery.
1
No reason to be snarky to those less fortunate than you. It is NOT humorous. I believe it adds to the division prevalent in the USA that has contributed to our present chaos. I know you can do better but please keep reading and responding the country needs smart interested voters more than ever.
Rather than make a comment myself, I'll let Teddy Roosevelt make a comment:
"No man should receive a dollar unless that dollar has been fairly earned. Every dollar received should represent a dollar’s worth of service rendered — not gambling in stocks, but service rendered."
3
This is still an anti-human capitalist point-of-view. Bah.
1
Right -- Teddy Roosevelt, the well known communist? please.
3
The bitter irony is that these billionaires don't need an extra dime for themselves or family. It's pure greed and power.
Most have spent their lives avoiding taxes too, not paying their fair share.
They are takers first, Americans second.
461
The real culprits are the hand maidens and courtiers who willingly do their business. Many members of congress fall into this group. They know trickle down economics doesn't work. Yet the sell it to the public like the con men that they are.
They also know that by the time the public figures this out they will be safely ensconced in high six figure lobbyist jobs or made VP's of the corporations that they served over their constituents.
5
An example of how great wealth can't buy happiness we have Betsey DeVoss who needs to have personal security as she feels threatened....how sad is that...wonder why she feels people don't like her and feels paranoid? maybe because she is a threat to the future of millions of Americans. Amway pyramid scheme sums her up.
4
Both parties in Congress have over the years allowed all of the deductions that lawyers write for lobbyists on behalf of those that have any money, from the poor to the rich, for deductions and credits!
2
As usual, Mr. Edsall delivers encyclopedic research on the issue. Obviously, the Republicans, led by their party leader, Don Trump, are doing their level best to come to the aid of the super-wealthy citizens of our country. There is no economic justification for their tax proposal - in fact, deficit-financing tax breaks for the rich will hurt our country at a time when we should be investing in our infrastructure and generally paying our bills. Where are all those supposed fiscal hawks of the Republican Party? Funny thing, they only exist when Democrats hold the levers of power.
16
Ryan and Trump have been working real hard to make me feel good about paying more so those who at the top can have more. For some reason it just doesn't resonate as a good thing for me. I am wondering how many times do those at the top have to realize gains at my expense before they will finally be happy with having more of what they don't need.
59
Rick, the answer to your question is they will never be happy until they have it ALL and we are living under bridges or dying. Greed and money are addictive.
3
According to Washington Centre for equitable growth, "the share of wealth owned by the top 0.1% is almost the same as the bottom 90%."
Instead of going for an egalitarian distribution of wealth by increasing the tax structure for the rich, Trump has just done the opposite. Now, with the revised tax structure the wealth gap will further widen between these two class of people. according to a study, the income of the middle class and the poor have gone down considerably over the past 10 years due to stagnant minimum wages.
31
Call me old-fashioned but I would like for the country to go back to the 1980's in that income through investments is taxed at the same rate as income through physical labor.
369
BTW, "physical labor" is also "intellectual labor": software engineers, doctors, lawyers, professors, anyone who gets a W-2 or 1099 as in "independent contractor", not passive income from investments.
13
Agreed.
1
I'd like to go back to the 60's. At least the Dem's and Repubs talked with each other and tried to make the US a better place. Now I feel as if i'm in a game of Rollerball
1
While we're at it, would somebody introduce an amendment to the tax bill to declare that the federal income tax returns of the President and Vice President, and major party candidates for those offices, are public information to be released by the IRS?
I'd love to see Congress put on the record if they approve of Trump's tax secrecy, or if Trump would veto tax cuts for the wealthy in order to keep his tax returns secret.
109
Mr. Edsall has provided the evidence. The motivations revealed by the evidence tell us that the Republican party wants to, and has always wanted to establish a permanent ruling class of the super rich. That's why they put the elimination of the estate tax at the top of their list. Only the wealthy should rule.
This is called a plutocracy. The people who rule are called oligarchs. The rest of us are called serfs. That's how Trump and the Republicans are going to make America great. They will reinstate serfdom. Man, those were the good old days.
240
They welcome a return to exploiting indentured servants...this is their idea of employment progress....clearly they have no real ideas, just a greedy neurotic compulsion that rules their empty lives.
2
Thomas Jefferson warned against inheritance growth that would lead to an upper class, as was in England at the time. We are already there!
195
At least in old England they tried to maintain some semblance of a moral code, here and now not so much. If we stay strong we might be able to pick up the pieces after the Oligarchs implode from greed.
1
Surveying the smorgasbord of goodies for the ultra-rich laid out by the House GOP'er plan, IF djt's accountant really told him the plan would cost His Unhinged Unfitness money, as he claims:
https://www.nbcnews.com/politics/congress/trump-tells-democrats-he-ll-ge...
then someone needs to be switching tax accountants !
29
This article is a great explanation of how republican sponsored tax cuts will affect Americans at various income levels. I am of the understanding, however, that a very sizable number of citizens in the income brackets ranging from the bottom 20% to the fourth 20% have been voting for the very republican party which is sponsoring the tax cut proposal in it's present form.
The republicans have been touting their intent to do this forever and have won election after election until they now have a clear path to complete their plan.
The "middle class" for its part, has responded to the term"tax cut" as if republicans would actually include them in the plan. Beyond the meager economic bone they are throwing the MC, republicans are doing what they always do, which is take care of the wealthiest, at the expense of everyone else.
While it's fair to evaluate and criticize any plan of this nature, let's recognize the responsibility of the voters in the outcome of whatever tax bill is eventually passed.To their credit, republicans have never hidden their intentions. Once the voters decide to take their heads out of the sand and understand no one is going to "take care of them" unless they get involved, tax redistribution may be completed in a more equitable manner. If not, they will be tacitly agreeing to live with the consequences.
151
Far too many voters are and remain ignorant of their own exploitation by the GOP. They get their news from sources like Fox News or the like. Their news intake consists of slogans, one-liners and outright lies that are not very well challenged by the Democratic party. To be fair, many of these duped voters put in a hard days work and have little time or energy for in-depth reading at the end of the day. When the consequences arrive, will they wake up? Locked into an ideology, no matter how exploitive, I, sadly, doubt it.
6
Republican intent to generate a benefit for the middle class is the baldest of lies.
6
The Republicans haven't been clear in their intentions. Rather, they lie at every turn saying this is a great tax plan for the middle class. Just yesterday, Trump said the new tax plan is a disaster for him personally when the exact opposite is true.
6
To see the intent, just look at the specific provisions. For example: carried interest loophole - stays; estate tax - goes; alternate minimum tax - goes; corporate tax which averages 19% today decreases by something like $1T over 10 years (maybe someone knows where the average is going - I don’t - but less than 19%); deductions for medical - going; deductions for SALT - going; pass-thru dropping - not sure how this works but seems to help the wealthy.
Nuff said!
70
While the middle class taxpayer will receive, supposedly, a tax break that generally averages $1,200 (which, duh, amounts to $100/month), and which will be immediately offset when they can't deduct medical expenses, tuition-loan interest, and state and local property/income taxes, the upper echelon will receive a tax break well in excess of a $100/second. The average hard working taxpayer can't fathom, nor should they be able to, the complexities of consequences involved. But that's the supposed beauty of democracy, we elect representative from our states and districts who should be able to understand it and should translate bottom lines for their constituents. The problems start when the legislators and leaders and their donors ARE the beneficiaries.
369
Yes, our elected officials, our employees, should better understand the details. But do they? Do these men, and few women even do their own taxes? I doubt it in most cases.
Add that their staff (do they have the right knowledge set?) is doing most of the work...heavily aided, rather influenced, by lobbyists, consultants. All of which gets churned out as bullet-points for their sales pitch "appearances."
1
As this analysis clearly shows, it is the Republican Party (not the "liberal coastal elites") which has complete and utter contempt for red state voters.
IF the Republicans believed in democracy, they would have presented their tax plan as clearly described by Edsall (along with their proposed cuts to Medicare) to the voters and argued for it, which they clearly did not.
What the Republicans certainly did was to discuss tax ideas with their wealthiest --and if the Republicans get their way, soon to be even wealthier---donors behind closed doors.
The pressure to pass this plan comes from wealthy Republican donors who are threatening to withhold their "campaign contribution" bribes---that is the only word to describe it.
The pressure is not from voters who were "promised" tax reform.
Republicans know that if they had been honest and promised THIS plan to the voters the Republicans would have been swept out of office (even with all of their other un-democratic work of gerrymandering and voter suppression).
235
Not true. Red state voters by and large do not pay much state and local tax.
reply to DRS: Trump did not run on repealing the tax on estates over $10 million and lied about pass-through income (nor did he say that he would get rid of medical bill deductions and cut Medicare and Medicaid to pay for it).
1
But they rely a lot more on social programs than blue state residents (much as they will deny it), they are going feel more the cuts to programs that will "fund" these tax breaks for the rich.
2
Nice chart. And to think, it does not reflect all the wealth held by the wealthy in off-shore tax havens. What would it look like if it did? Off the charts, I'm guessing.
273
carla, I liked Tom's article but it was remiss in leaving out the Paradise Papers-- a newsworthy scandal.
1
If only half of the predictions of the experts cited in this article come to fruition, the middle classes are the ones who will pay. The article explains the situation clearly, & the graphics alone are enough to demonstrate the vast inequity of the GOP's tax proposals.
Most people will not be concerned with where their taxes will be in 10 years; they want more money in their pockets NOW. That's how the GOP will try to sell the bill. The bill's opponents (i.e., Dems and some of the true fiscal conservatives on the GOP side) need to emphasize how the bill will require massive cuts to the social safety net. Let voters know that the involved deficits will require enormous cuts to programs like Medicare, Medicaid & Food Stamps. That's the kind of personal "capital" they have in their pockets right now, but will be lost if this bill passes. Coupled with the GOP's intention to destroy the ACA, this would be a devastating side effect of the bill.
If the overriding concern of the voters in Virginia and Maine was health care as noted in exit polls yesterday, then connecting these dots should sway the voting public to see how these changes in taxation will be a disaster for anyone who relies on them. Then connect the dots to the other taken-for-granted services that will have to be slashed to shore up the loss in the tax base. Simply slamming the top 1% or .01% will not hold enough water to overcome the folk's need for instant gratification by the supposed $1200 in "tax relief" in 2018.
182
A lot of Trump voters are fine with cutting Medicare, Medicaid, and Food Stamps. They buy into the meme that it's, "welfare queens driving up to collect their checks in Cadillacs."
Republicans have been touting that for decades. Welfare helps the "undeserving." Corporations and the rich are clearly the "deserving." Tax loopholes are not government payments, they're incentives. Government handouts are given to the undeserving. You know, those people.
9
They want massive cuts to the social safety net. Many republicans are frankly appalled that such a thing even exists.
3
The point that has to be made over and over, is that whatever it costs to run the government must be paid for (except when there is a Republican in the white house, of course) and that cost will either be paid for by those who can afford it or by those who cannot afford it. I choose the former, but there are many in congress, and their supporters, who choose the latter.
1