Passing the Tax Burden to Working Americans Via The Pass Through Loophole

Please excuse me while I jump up and down on this keyboard trying to flag attention to one of the most egregious GOP give-aways to the top 1% of American income earners.  It isn’t as though the Pass Through Loophole hasn’t garnered attention, it just doesn’t seem to have broken through the dismal cloud of information and misinformation about the GOP tax plan and into enough sunlight.

“The big one in the tax plan issued last week by the GOP and President Trump involves what’s known opaquely as “pass-through” business income. Even that term might have been too revealing, so the document the Republicans issued described it even more obscurely as a “tax rate structure for small businesses.” That’s also dishonest, however, because the businesses it affects are often nothing like “small.” [LAT]

There’s nothing new about legislative obfuscation of legislative intent — but this one is a major way to ease the burden on the 1% and put more pressure on the working and middle class Americans to make up the difference.   Here’s how it works:

“Pass-through” income is business income that’s reported to the IRS only by individual owners of, or partners in, the business. These businesses can be organized as partnerships, S-corporations, or sole proprietorships. They’re distinguished from C-corporations, which are almost always big businesses with public stockholders; C-corporations pay the corporate income tax, and the shareholders pay personal income tax on their dividends and capital gains.

In other words, if a business is a partnership, S-corporation, or a sole proprietorship it doesn’t pay corporate tax rates.  The income earned is reported by individuals.  Now, here’s how the Republican plan would specifically benefit the top 1%:

Currently, the top marginal individual rate is 39.6%; the new tax proposal would reduce the top rate on pass-through income to 25%. Pass-through income from an S-corporation, by the way, already is exempted from the Affordable Care Act surcharges that raised the top income tax rate on some high-income earners by as much as 4.7 percentage points.

So, if the business is an S-corporation, sole proprietorship, or partnership the tax rate is 25%.   Thus, if Desert Beacon were to become Desert Beacon LLC the income tax reduction would be from a maximum of 39.6% to 25%.   Now, who are those who tend to form the businesses which qualify for the LLC Loophole?

“Pass-through business income is substantially more concentrated among high-earners” than traditional business income, Treasury Department economist Michael Cooper and several colleagues observed in a 2015 paper. They also found that about one-fifth of it went to partners that were hard to identify, and 15% got sucked up into circles of partnership-owning partnerships, complicating IRS analyses.”

I sincerely hope the reader isn’t too surprised that these tax avoidance strategies are practiced mostly by high-earners.   Let’s take a closer look at the summary of that 2015 NBER paper:

Pass-through” businesses like partnerships and S-corporations now generate over half of U.S. business income and account for much of the post-1980 rise in the top- 1% income share. We use administrative tax data from 2011 to identify pass-through business owners and estimate how much tax they pay. We present three findings. (1) Relative to traditional business income, pass-through business income is substantially more concentrated among high-earners. (2) Partnership ownership is opaque: 20% of the income goes to unclassifiable partners, and 15% of the income is earned in circularly owned partnerships. (3) The average federal income tax rate on U.S. pass- through business income is 19%|much lower than the average rate on traditional corporations. If pass-through activity had remained at 1980’s low level, strong but straightforward assumptions imply that the 2011 average U.S. tax rate on total U.S. business income would have been 28% rather than 24%, and tax revenue would have been approximately $100 billion higher. (emphasis added)

Therefore, if someone is trying to pass this off as a “middle class” tax cut, or a “small business” tax cut, the appropriate (and perhaps most polite) response is BALDERDASH.

It should come as no surprise that Kansas, under the spell of Brownback-ism, tried opening the LLC loophole as a way to “create jobs.”  It failed, and failed miserably.  Not only did the state find itself in a terrible revenue position, losing money for schools, transportation, and other government services, but it allowed high-income earners to stash more cash.  Case in point: KU basketball coach Bill Self was avoiding most Kansas income taxes on his $3 million salary by parking most of his earnings in an LLC.  Even some of the tax freeloaders were beginning to feel like tax freeloaders by late Summer 2016.  [see also NYT]

And, no one should suggest the amount of money lost because of the ‘reformed’ Kansas tax structure was negligible:

For fiscal year 2014, which ended on June 30, the state collected $330 million less in taxes than it had forecast, and $700 million less than it had collected in the prior year.  Those are big numbers in a state that spends about $6 billion annually from its general fund, and the revenue weakness led both Moody’s and Standard & Poor’s to cut Kansas’ credit rating this year. [NYT]

The situation hasn’t gotten any better.   There were promises made:

In 2012, Kansas Gov. Sam Brownback signed a bill that, among other things, substantially cut the state’s top tax rate and exempted “pass-through” business income from taxation (President Trump’s tax plan includes a similar loophole). The architects of Brownback’s plan predicted that it would provide an “immediate and lasting boost” to the state’s economy.

And promises not kept. The 2017 numbers are truly remarkable, and not in a good way:

Real GDP growth in Kansas since the fourth quarter of 2012 (Brownback’s cuts took effect in January 2013) has been relatively slow, at 6.1 percent through the third quarter of 2016. That’s about three-fourths of U.S. GDP growth over that same period (8.3 percent). A similar story holds for private employment growth: 5.0 percent in Kansas between December 2012 and March 2017, 9.1 percent in the U.S. overall. [WaPo]

The Kansas Legislature was so disappointed in the Great Brownback Experiment it voted to change the tax law — and the governor vetoed their bill.

“Unfortunately, that part of the plan — what Brownback called an economic “shot of adrenaline ” — hasn’t materialized. The state’s budget deficit ballooned to $350 million. And the small-business provision also created new ways for residents to avoid taxes, meaning more lost tax revenue and compliance headaches for the state.” [Time]

Just what we don’t need — lost tax revenue and compliance headaches.  The bottom line of this easy route to the bottom is that:

(1) Claims that pass through exemptions and tax cuts will create new revenue have already prove erroneous.  Witness what happened to Kansas.

(2) The loss of revenue from the pass through exemptions was serious and exacerbated an already tight budget situation.

(3) Claims that the tax ‘reform’ would help small middle class business owners proved elusive — the overwhelming numbers of those who benefited, and will benefit, were high income earners.

This would be a good time to contact Senator Dean Heller (R-NV) to let him know that no one is fooled by changing the name from “pass through” to “tax rate structure for small business;” it’s still a way to shift the burden of maintaining government services from high income earners to middle and working class Americans.   The Senator can be reached at 202-224-6244; 775-686-5770; or 702-388-6605.

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Watching the Bear Raid the Pantry: Trump Administration Invitation by Inaction

One of the most profoundly disturbing moments during testimony given by Attorney General Jeff Sessions to the House Judiciary Committee was his response to Rep. Brad Schneider:

“When the attorney general appeared before the House Judiciary Committee on Tuesday, Rep. Brad Schneider (D-Ill.) asked him about the department’s efforts to protect U.S. elections from foreign interference in the future. Sessions told the Senate Judiciary Committee last month that election security policies needed to be reviewed, but didn’t have any updates to offer on Tuesday.

“I have not followed through to see where we are on that and I will personally take action to do so,” Sessions said. “There are a lot of things that have been happening, and we’ve been working on a lot of great agenda items, but this one is important, and I acknowledge that, and I should be able to give you better information today than I am.”  [HuffPo]

Let’s review.  The Russians sought to break into at least 21 state election systems, and may have attempted to hack into as many as 39.  The Russians launched a social media influence campaign replete with bots, and posts, and promotions.   The Russians attacked the computer systems of the Democratic Party.  The Republican response to these three elements has been, and continues to be, completely unsatisfactory.

The White House reply has ranged from “it didn’t happen because Putin said it didn’t,” to a bizarre conspiracy theory in which it’s the Democrats who conspired with the Russians (to lose the election?), to “it may have happened but who can tell who did it.”   At the risk of redundancy, it’s not like there haven’t been security assessments published since last January refuting this nonsense.  However, too often we lose track of an essential piece of this state of denial:  The administration appears to believe that this  activity wasn’t serious because no one can prove that election results were changed in any way.  The is a goal post with serious policy ramifications.

This is almost tantamount to arguing that since the bear didn’t eat so much food during his raid on the pantry as to cause family members to starve,  then the raid wasn’t actually serious.

It offers an excuse for Attorney General Sessions’ inactivity.  After all if nothing serious happened, then why should the Department of Justice assign assets toward investigating the problem?   The second paragraph quoted above is perhaps the most disturbing.  If we take the Attorney General at his word that the Russian interference is “serious” then why has he nothing to report to the House Judiciary Committee?

Because other items were more important? “We’ve been working on a lot of great agenda items.”   And what might these be?  A Muslim immigration ban?  A ban on recruiting transgender individuals in the US military?  I wish the Representative, or other Representatives, had ask what “other great agenda items?” And, why are these are more important than attempts to interfere in US elections?

Back to the bear in the pantry — The bear’s pantry raid wasn’t all that important because we’ve been busy replacing the carpeting in the living room.   There was an addendum to Attorney General Sessions’ comments:

“He added that states needed to review their election vulnerabilities, and that the FBI and intelligence community could play a key role in stopping hacking. He said he did not dispute the conclusion of the intelligence community that Russia interfered in the 2016 election. There’s no evidence that any votes were changed by hackers.

Federal and state officials have faced significant obstacles in trying to coordinate their response to election hacking. The Department of Homeland Security waited until this September to notify 21 states that Russian hackers had targeted them last year. Election officials in two of those states ― California and Wisconsin ― then turned around and accused the department of giving them bad information.”

There he goes again — the actual election returns weren’t rendered bogus, then there’s nothing to see here.  Or, no one starved so the pantry raid wasn’t important — but wait, the FBI and intelligence community COULD  “play a key role in stopping hacking.”   Could?

The FBI and intelligence community COULD assist states — but they didn’t notify 21 states until THIS September, and then two of the states got inaccurate information.  Nothing says “this isn’t a priority” quite like delaying important warnings for months and then not checking to see if the warning contents were accurate.

After the bear ate his fill from the family pantry …”we’d like to inform you that you had a bear in your pantry last Summer, but it could have been raccoons, and although the door frame was damaged, they could have gotten in through that back door, or maybe it was the window.”

As of this November:

“Most states’ elections officials still don’t have the security clearances necessary to have a thorough discussion with federal officials about what’s known about Russian, or others’, efforts to hack into their systems.

Seven states still use all-electronic voting systems whose results cannot be verified because there is no paper trail.

And hundreds of US counties rely on outside contractors to maintain their registration records and update the software on voting machines. Some of those contractors are small operations with few employees and minimal computer security skills.”

In other words — the back door frame still hasn’t been repaired, there’s still a batch of open cartons of food in the pantry, and back fence can be easily scaled by all but the most geriatric ursine intruder.

The bear will be back.  And if he had fun in the pantry, imagine how much fulfilling fun he’ll have in the kitchen?

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The Power and the Vainglory: Roy Moore’s Sad Mad Power Grab

American philosopher Ralph Waldo Emerson described Republican Senate candidate Roy Moore, without ever meeting him: “The louder he talked of his honor, the faster we counted our spoons.”   The expression actually goes back a bit further in English literature, appearing as “counting spoons” in James Boswell’s The Life of Samuel Johnson.

“Why Sir, if the fellow does not think as he speaks he is lying; and I see not what honour  he can propose to himself from having the character of a liar.  But if he does really think there is no distinction between virtue and vice, why, Sir when he leaves our houses let us count our spoons.”

The metaphor has lost some of its relevancy in an age wherein table spoons come not just in pewter or silver, but in aluminum, stainless steel, and various kinds of plastic.  However, it holds its force as a description of the prudent response to voluble protestations of (self) righteousness.

Did we not wonder why the man was so vehemently anti-gay, anti-abortion, anti-modernity?  Why he insisted beyond all reason that a massive monument to the Ten Commandments be installed in his courthouse?   Most counties are satisfied with a smaller, more tasteful, monument located on a nice piece of manicured lawn.  Not so Mr. Moore.  Most public officers were, at least grudgingly, willing to abide by the law of the land on gay marriage.  Not so Mr. Moore.

Most people in this country are willing to tolerate a range of beliefs, even if such beliefs are personally objectionable.  Not so Mr. Moore, who is essentially an eliminationist.  Those with whom he disagrees should be silenced.  Those of whom he does not approve must be incarcerated.   Some scholars have associated the Nazi eliminationism with native antisemitism.  The combination was violently toxic and heinously lethal.  Moore espouses a particularly vehement hatred of Muslims — they are to be excluded from public office and civil society.  Moore has decried that the “government started creating new rights in 1965.”  The date is instructive.  The Civil Rights Act was passed in 1964, and the decision in Griswold v. Connecticut was rendered in 1965.  Mr. Moore is nothing new on the face of the earth. He’s as old as patriarchal tribal conflict.

He’s as old as the theories of female responsibility for leading First Man astray, as old as the opponents of the cults of Isis, Aphrodite, and  Mother Earth.  There’s no single point of origin for misogyny, but Mr. Moore can find plenty of carefully selected Biblical passages to buttress his prejudices.  We could also assemble a number of equally carefully selected passages to oppose his views.  The common denominator for these views precipitate down to Power.  Not necessarily sex, but power of one gender over another.

This isn’t about a cultural issue, although support for Mr. Moore can be utilized as a “political wedge issue,” under the category of Culture Wars.  However, no matter how it’s implemented, it’s still not a cultural issue. It’s still about good old fashioned garden variety power.

Why else would a 30+ year old man seek the attentions of teenage girls?  Why else would a man grope? Not because it’s a form of play — but because it’s a display of power.  And that’s the last thing Mr. Moore needs to possess — more power over anyone, anywhere, anytime.  The good people of Alabama deserve better representation than that which is so sadly demonstrated by Mr. Moore.

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Get Along Little Dogie, but not to Asian Markets

The President was pleased to tell anyone watching his Twitter feed that his trip to Asia was a Wonderful, Biggest Ever In History, Success.  Not. So. Fast.  Especially “not so fast” if a person is in the cattle business, and most of the cattle business in Nevada is in the northern part of the State:

“Range livestock production is predominate in Nevada with well over half of the farms raising cattle or sheep. The highest concentrations of cattle are in the northern part of the State. Cow-calf operations are most common type of operation and Elko county ranks among the leading counties in the Nation in number of beef cows. “

So, when the administration announced it was pulling out of the Trans Pacific Partnership the rug got pulled from under any notions that Asian nations would increase their importation of beef from the US.  The Japanese and Chinese governments announced their own policies, and neither was amenable to imports from America:

“Japan announced it was increasing its tariff on imports of frozen beef from 38% to 50% until next April. The decision affects all countries with which it does not have a free trade agreement. That would include the United States.

Second, according to reporting that appears to be exclusive to Politico, the agreement the Trump administration made with China required that the beef be free of artificial growth hormones or additives that make the meat leaner. Unfortunately, most of the U.S. cattle industry relies on the hormones or the additives or both, according to the reporting.”

When Trump touted “America First” that translated to “America out of the market” as the administration bumbled through bilateral agreements.  The result was predictable, US beef imports to Japan dropped 26% from last year. [FBN]  Those who advocated bi-lateral, as opposed to multi-national agreements, argued that the former would allow negotiators to directly address issues.  Obviously, that didn’t happen.  Meanwhile, back in Beijing:

“The role of China in global beef markets has evolved rapidly in recent years.  Despite being a large beef producing and consuming nation for many years, China has never been a player in global beef markets until recently.  For many years China neither imported nor exported much beef. However, since 2012, growing beef consumption has resulted in a rapid increase in beef imports as consumption outpaced beef production in China.  China emerged as the second largest beef importing country in 2016.  Major beef suppliers to China in 2016 were Brazil (29 percent of total Chinese imports); Uruguay (27 percent); Australia (19 percent); New Zealand (12 percent) and Argentina (9 percent).   In 2017, Chinese beef imports are projected at 950 thousand metric tons, up 17 percent from 2016.”

So, can we expect progress on opening Chinese markets to American grown beef as a result of this recent trip to Asia?  Probably not.

“Business deals announced by the president are tentative agreements that may not be fulfilled. And while the president railed against what he viewed as systemic flaws in the U.S. trading relationship with its Asian partners, he neither publicly requested nor received specific assurances to address issues like market access and intellectual property theft.”

The beneficiaries of this administration policy appears to be the Australians.  An agreement reached last March allowed greater access to Australian imports of frozen beef: “The joint statement between China and Australia means the number of meat processors permitted to export chilled beef to China will increase from 10 to 36, with another 15 expected to have pending approvals fast-tracked.” [AuBC]  The applied tariff on Australian beef is 8.4% with an elimination of the 12% to 25% tariffs eliminated by 2024. [MLA.au]

The bottom line seems to be for all the boasting and bombast from the White House twitter line, the Asian trip produced ZIP/Zero for western US cattle producers, including those in Nevada.

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It’s Different When Black People Do It: Sessions and the Black Identity Extremists Report

Deflection and distraction seem to be the order of the day. Republican members of the House Committee on the Judiciary appear to be riding some hobby horses which raise issues long resolved, or long justifiably ignored.  .  However, setting aside the Russian issues for a moment, Representative Karen Bass (CA-37) inserted an extremely important question about “extremist groups.” That would be African American “extremist groups.” 

Has the Department of Justice compiled a report on White Identity extremists? It certainly had prepared a report on Black Identity Extremists, but Representative Bass wanted to know if Black Lives Matter was to be target of Justice Department investigations.   The Attorney General asserted that he had not read the report.

One thing about the report that is immediately apparent is how short the report is, inserting six instances of highly dissatisfied persons attacking police and law enforcement officers.  There is a relatively lengthy section on the old BLA of the 1970s.  Not to put too fine a point to it, the August 2017 report is a wet dream for white supremacists.   What renders this a nightmare is that the Attorney General of the US can’t define what a “black identity extremist” is, and wasn’t all that clear about what a white identity extremist might be — at least until he was prompted by Representative Bass who brought up the ubiquitous Sovereign Citizens and the KKK.

The report provides a definition:

“The FBI defines sovereign citizen extremists as individuals who openly reject their US citizenship status, believe that most forms of established government, authority, and institutions are illegitimate, and seek, wholly or in part, through unlawful acts of force or violence, to further their claim to be immune from government authority. The mere advocacy of political or social positions, political activism, use of strong rhetoric, or generalized philosophic embrace of violent tactics may not constitute extremism, and may be constitutionally protected.”

This adequately describes the overall “sovereign” citizens — black and white, but doesn’t define precisely what a black identity extremist might be. We’re left with this vague description:

“The FBI assesses it is very likely some BIEs are influenced by a mix of anti-authoritarian, Moorish sovereign citizen ideology, and BIE ideology. The FBI has high confidence in these assessments, based on a history of violent incidents attributed to individuals who acted on behalf of their ideological beliefs, documented in FBI investigations and other law enforcement and open source reporting.”

BIE “ideology” is apparently predicated on being upset by the use of excessive force and unjustified killings by law enforcement personnel by African Americans.   “The FBI assesses it is very likely a Black Identity Extremist (BIE) perceptions of police brutality against African Americans spurred an increase in premeditated, retaliatory lethal violence against law enforcement and will very likely serve as justification for such violence.” Evidently, African Americans can be “radicalized” by anti-authoritarian sources.  Who’s an anti-authoritarian?  ACLU?  Black Lives Matter? Anti-Defamation League?  Libertarians? The League of Women Voters?

What makes this report, and its reception, so disturbingly important is that when the Department of Homeland Security issued a report on White (right wing) Extremists in April 2009 the Republicans were “outraged” at the prospect of labeling “patriots” as extremists, and the Secretary had to defend the report from none other than the American Legion which bellowed “Americans are not the enemy.”  By April 16, 2009 the Department had to issue an apology!

But when African Americans get outraged about police use of deadly force, or when law enforcement officers shoot first and answer questions much later and community members express grief and agony, then they are “BIEs” and are properly the subject of FBI scrutiny?

This issue deserves at least the same investigation as the initial 2009 report incurred, and at least the comment the 2009 report initiated.  Until the day the Department of Justice is called upon to defend this report we’d have to conclude that it “really is different when black people do it.”

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The Great Republican Giveaway: Their Not So New Tax Plan

Good day, It’s time for our daily reminder that the GOP’s grand idea that Tax Cuts cure all ills is quack medicine. To hear ads from the Business Roundtable and associated PACs one might think that merely enacting a tax cut will cause Business To Boom, Wages To Rise, and, who knows, flowers to bloom.  Probably not, and probably not for some obvious economic reasons.

The proposed tax cut is deficit financed.   Yes, tax cuts are lovely, BUT:

“Tax cuts have the potential to grow the economy, but their benefit depends on how they are structured and financed. For tax changes to promote growth, changes should encourage work and investment through lower rates, efficiently encourage new economic activity (rather than providing a windfall for previous investments), reduce economic distortions, and create minimal (if any) increases in the budget deficit.” [CRFB]

The current proposal doesn’t really encourage new activity, it doesn’t reduce economic distortions (income inequality, etc.) and it certainly doesn’t reduce the budget deficits.

Reducing the statutory tax rate is meaningless if not paired with closing corporate tax loopholes and incentives.   Under the current system AT&T paid an effective tax rate of 8% from 2008-2015.  How do these corporations pull this off?  They can book most of their profits overseas, out of the IRS reach.  The GOP proposal assumes that if the statutory rate is reduced to 20%, the companies will reflexively book profits here, and decide to avoid other techniques which reduce the statutory rate to almost 0.   Here’s a brief list of popular tax dodges:

American Electric Power, Con Ed and Comcast, qualified for accelerated depreciation, enabling them to write off most of the cost of equipment and machinery before it wore out.

Facebook, Aetna and Exxon Mobil, among others, saved billions in taxes by giving options to top executives to buy stock in the future at a discount. The companies then get to deduct their huge payouts as a loss. Facebook used excess tax benefits from stock options to reduce its federal and state taxes by $5.78 billion from 2010 to 2015, the institute found.

Individual industries have successfully lobbied for specific tax breaks that function as subsidies: for instance, drilling for gas and oil, building Nascar racetracks or railroad tracks, roasting coffee, undertaking certain kinds of research, producing ethanol or making movies (which saved the Walt Disney Company $1.48 billion over eight years, the report says).  [NYT]

Nice, and nothing in the current proposal should give anyone any comfort that if given a 20% statutory rate major corporations won’t try to pull the same tricks to get into the 0%-8% effective tax rate.  It just makes it easier to get there.

Reduced statutory tax rates don’t automatically create employment.  For the 1 millionth time (?)  — There is one reason, and only one rationale reason, for hiring anyone ever:  The company doesn’t have sufficient numbers of employees to deliver goods and services demanded by clients and customers at an acceptable level of customer service.   That’s it. That’s all there is to it.  An employer might give preference to a veteran IF there is a need to hire someone (and get a tax break for doing so), or an employer might decide to hire someone to create a more diverse workplace, or a workplace that is more flexible.  However, that hire will take place IF and ONLY if there is a need to hire someone in the first place.  Put more mundanely,  if having four check out clerks on every shift is enough to insure that no one waits longer than 5 minutes in the grocery check out lanes, then the fifth won’t be hired.

Secondly,  there is no evidence that tax cuts themselves produce increased employment.  If one is referring to the Reagan Era tax cuts for evidence — be careful — one of the prime drivers following that tax cut was the Fed’s monetary policy. [CAP] Otherwise there is preciously little research concluding that tax cuts for millionaires and billionaires spurs employment or even wage growth for working Americans.  [CNBC] [CBPP] [NYT] [WallStJournal]

A third point — the argument that “tax incentives” encourage entrepreneurship is almost risible.  No one starts a business because of the “tax environment.”  Listen to one successful entrepreneur:

“While I can imagine tax regimes that would create disincentives for entrepreneurship, we don’t have that situation today in America, where tax rates on capital gains (the primary way that founders of successful start-ups make money) are already far lower than rates on ordinary income. Indeed, some of the most admired entrepreneurs — Bill Gates, Steve Jobs, Jeff Bezos — started their companies under significantly higher tax regimes. This is consistent with empirical research; the economists Robert Moffitt and Mark Wilhelm, for example, found that the large cuts in marginal tax rates in 1986 did not induce high-income men to work longer hours.”

There are two things to unpack from this analysis: (1) Companies aren’t formed because of the tax environment; and (2) Companies ARE formed because of the availability of capital.   Now, take a look at the FRED trends in real gross domestic investment. See any downward trends? Seems like there’s been a steady upward trend from 1950 onward.  This doesn’t argue for a lack of capital being a major problem for start ups.

And then there are the details, summarized by Patriotic Millionaires:

– On the elimination of the Estate tax: “We can’t wait to hear President Trump try to explain how a $4 billion tax cut for Ivanka and Tiffany helps the middle class.”

– On the elimination of the AMT: “The elimination of the Alternative Minimum Tax will virtually guarantee that thousands of Americas wealthiest people will pay no tax at all. How will be left holding the bill for that lost revenue? The middle class.”

– On the territorial tax system: “President Trump’s big plan to boost the middle class starts by helping multinational corporations avoid paying any taxes at all? That is absurd.”

– On reducing the number of tax brackets: “If anything, we need more tax brackets. Someone making $5 million, $10 million, or $50 million a year should definitely pay higher taxes than someone making $400,000 a year. How can we even debate this?”

That last question is a good one, as are the other items in the list.  How is demand for goods and services increased by (1) giving tax breaks to corporations which can use the windfall to pay higher executive compensation, indulge in more mergers and acquisitions, or enjoy the fruits of stock buy-backs; (2) eliminating taxes on millionaires and billionaires and placing more of the burden on working Americans; (3) eliminating the estate tax which doesn’t apply to most American taxpayers and helps only the few at the expense of the many? —

“For decedents in 2017 (with an exemption of $5.49 million), the Tax Policy Center estimates there will be only about 11,300 estate tax returns filed, of which 5,500 will be taxable. Estate tax liability will total $19.9 billion after credits.” [TPC] (Note: There were 150,493,263 returns filed in 2015. (download) Divide 5,550 by 150 million and your plastic brains will yield an infinitesimally small number complete with exponents.]

A final point — Nevadans (and residents of the other 49 states) should be aware that many of the arguments set forth by proponents of the Republican tax plan are couched in vague or highly generalized terms.  Not many politicians want to have to explain why eliminating the Alternative Minimum Tax will benefit lower income Americans.  Quick answer: It doesn’t.  Or, the arguments may be set forth in platitude form, for example: This will put money back in your pockets.  The major question is WHOSE pockets and for how long.  It’s no secret that the GOP tax plan puts the majority of the benefits into the pockets of the ultra-rich, something like 80% of the benefits accrue to the top income earners.

Apologists may take a step or two further.  “Democrats are engaging in class warfare.”  Well, if it’s the ultra-rich vs. the other 99%, so far the 1% are winning very nicely, thank you. And, then there’s the “Democrats want to punish success.” Please spare me.  First, it’s not “punishment” to pay for the military that defends you, the schools that educate you, the national parks you visit, the hospitals that treat you, the roads that smooth the way for you get to work… Secondly, no one is talking about punishing anyone, it’s just a matter of equity — we should all be paying our fair share.

Please contact your Representatives and Senators to oppose this egregious handout to the multi-national corporations and the millionaires and billionaires who stand to reap 80% of the benefits of this Great Republican Giveaway.

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Filed under Economy, income inequality, Politics, Taxation

Bob Dole, a nation turns its lonely eyes to you?

Whatever happened to the Republican Party which heard Senator Robert Dole accept his nomination, and say:

“But if there’s anyone who has mistakenly attached themselves to our party in the belief that we are not open to citizens of every race and religion, then let me remind you, tonight this hall belongs to the Party of Lincoln. And the exits which are clearly marked are for you to walk out of as I stand this ground without compromise.”

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