dartsndeacs
THE quintessential dwarf
although there's gonna be a huge pressure to cut CA taxes now, so some of these things may go away.
Biggest Reform EVER passed thread
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although there's gonna be a huge pressure to cut CA taxes now, so some of these things may go away.
Gooner
Pit League Fantasy Football Commissioner
Tax Policy Center Analysis
Looks like you need better numbers, because your statement is completely full of shit
dartsndeacs
THE quintessential dwarf
You're right, closer to 80%, not 77%, paid to the bottom 99%. But by 2025 that number becomes 75%. So I suppose if you average the two you do get 77%.
Last edited:
marquee moon
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Trump derangement syndrome is alive and well
Man I
Pine for the good ole Obama GDP years
Man I
Pine for the good ole Obama GDP years
Louis Gossett Jr
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So the crowning achievement is a tax cut that disproportionately gives money to the rich as the crumbs dry up for the Poors as time passes and all you needed to do was vote for people that gut net neutrality, let climate change run wild, and in the coming months have social safety nets slashed. Sounds like an amazing deal I don’t know why more people aren’t on board.
ConnorEl
Well-known member
dartsndeacs
THE quintessential dwarf
What % of people pay to read NY times? Post le article. kthnx.
dartsndeacs
THE quintessential dwarf
Merry Fuckin' Christmas
ConnorEl
Well-known member
Yea, Trump inspired me to subscribe.
Here’s the piece
Quote
—————-
Congressional Republicans have finally done it: Both the House and Senate passed tax legislation. The bill has now headed to President Trump’s desk for his signature.
Most dissection of the plan has focused, for obvious reasons, on the way it changes our tax bills. The Tax Policy Center found that in the first years most people would get a tax cut, although the biggest cuts are reserved for the wealthiest. By 2027, lower- and middle-income Americans would get no benefit or actually pay more in taxes.
But this bill also serves as a setup for steep government cuts. Programs from Medicare to flood insurance to food stamps will be at risk the moment President Trump’s signature dries. Some reductions would be inflicted automatically. Others, Republicans will pursue with a handy justification — the revenue hole created by their own legislation.
Under the Pay-as-You-Go Act of 2010, or Paygo, the Office of Budget and Management has to order automatic spending cuts if legislation passed by Congress is set to increase the deficit and the rules aren’t waived or the loss isn’t covered by new revenue. According to a Congressional Budget Office analysis, spending cuts would have to total $136 billion for a bill, such as the tax legislation, that increases the deficit by $1.5 trillion over a decade.
What would get cut? Some programs, like Social Security and unemployment benefits, are spared. But plenty of others are seriously exposed. While there are limits on how much Medicare would be pared back, it would still be slashed by $25 billion.
The rest of the $111 billion would have to come from other mandatory government programs, and because most have no protection, they would be reduced to barely any funding or nothing at all. That includes block grants for things like Meals on Wheels, farm aid like the crop insurance fund, the Temporary Assistance for Needy Families program and the National Flood Insurance Program.
Some of the reductions would be huge: the Department of Justice’s Crime Victims Fund, which gives states money to help victims with medical expenses and counseling, faces a $13.5 billion cut. Others have sources of funding that aren’t subject to Paygo but still take a hit, like the Women, Infants and Children program that provides food to low-income mothers and would be cut by $1 million.
Some cuts would probably rankle Mr. Trump as much as anyone else. Border protection would face a potential $1.3 billion cut. Immigration and Customs Enforcement would be slashed by $318 million. H-1B visa fraud protection would be cut by $45 million.
All of this happens without Congress lifting another finger. The Republican leaders Mitch McConnell and Paul Ryan have claimed that Paygo cuts won’t happen because Congress will waive them. But that requires help from Democrats, who have been completely shut out of tax reform and may have little appetite for cooperation.
Many Republicans have claimed that the tax bill won’t cost the government any extra money. The Treasury Department put out a one-page paper on the Senate-passed version that said it would be paid for by economic growth. But the threadbare analysis was able to come to that conclusion only by assuming that Congress passed other legislation, such as an infrastructure bill.
All nonpartisan analyses say otherwise. The conservative Tax Foundation found that the Republican bill will reduce government revenues by $1.47 trillion over a decade, and even assuming growth helps cover the cost it would still come up $448 billion short. The Penn Wharton Budget Model finds that it will cost at least $1.8 trillion over 10 years. The nonpartisan Joint Committee on Taxation found that the Senate-passed version — which differed a bit from the final legislation, but not enough to radically change the numbers — would not pay for itself, costing about $1 trillion.
If these models are right and the bill does add to the deficit, Republicans have already said they’ll cut government spending further.
Jeb Hensarling, Republican of Texas, has insisted that the cost of the tax bill will be covered by economic growth. But, he told Bloomberg, “If not, as a Republican, the answer would be less spending, not more tax.”
Others have admitted that no matter what happens, they’ll call for spending cuts. Marco Rubio told an audience in late November that tax reform is only one side of the Republican plan; the other is to reduce government programs: “You are still going to have a debt problem in the absence of spending cuts.”
Mr. Ryan sounded the same note, saying, “We’ve got a lot of work to do in cutting spending.” Mark Sanford, Republican of South Carolina, was even more blunt. Will the tax bill “help on the margin? Yes. Will it do as much as people advertise? Probably no,” he said. “The real conundrum that we still have to deal with if you really care about debt and deficit is spending.”
Republicans so far haven’t decided exactly what will get the ax. “We’re going to have to get back next year at entitlement reform, which is how you tackle the debt and the deficit,” Mr. Ryan recently said, specifying “health care entitlements” in particular. Orrin Hatch singled out “liberal programs” for the poor.
That could mean a lot of things, but Medicare, Medicaid and Social Security are all at risk when so-called entitlements are on the cutting board.
Others, including Mr. Ryan, are also focused on what they’re calling “welfare reform,” or changes to anti-poverty programs. “For us to achieve 3 percent G.D.P. growth over the next 10 years from tax reform, we have to have welfare reform,” according to Rod Blum, Republican of Iowa.
The president is also on the welfare reform bandwagon. “We’re looking very strongly at welfare reform, and that’ll all take place right after taxes, very soon, very shortly after taxes,” he said in November.
Republicans will almost certainly focus on instituting work requirements in programs where they don’t already exist, namely Medicaid and food stamps. But most adults on Medicaid already work; those who don’t are primarily people with an illness or disability, caring for family members, in school, or retired. A work requirement will simply take health coverage away from them. Similarly, many childless adults already have to work to get food stamps. Stricter requirements will kick very poor people off the program who tend to struggle with finding a job anyway. Existing work requirements don’t help people find jobs, but simply penalize them.
Republican leaders have wanted to do this for a long time. Mr. Ryan has been salivating over cutting Medicare, Medicaid and Social Security for as long as he’s had a political career. Mr. Trump’s 2018 budget proposal, released well ahead of the tax legislation, named “welfare reform” one of its core pillars.
But now that they’ve succeeded in passing a tax package that will reduce government revenues so much, the ensuing cost will serve as the excuse to get everything else they want. They’ll count on our short memories to forget who created larger deficits in the first place. Those deficits will serve as the motivation to enact cuts they’ve sought all along. The tax bill isn’t just a regressive giveaway to corporations and the rich. It’s a Trojan horse with deep government reductions stuffed inside.
—————
Here’s the piece
Quote
—————-
Congressional Republicans have finally done it: Both the House and Senate passed tax legislation. The bill has now headed to President Trump’s desk for his signature.
Most dissection of the plan has focused, for obvious reasons, on the way it changes our tax bills. The Tax Policy Center found that in the first years most people would get a tax cut, although the biggest cuts are reserved for the wealthiest. By 2027, lower- and middle-income Americans would get no benefit or actually pay more in taxes.
But this bill also serves as a setup for steep government cuts. Programs from Medicare to flood insurance to food stamps will be at risk the moment President Trump’s signature dries. Some reductions would be inflicted automatically. Others, Republicans will pursue with a handy justification — the revenue hole created by their own legislation.
Under the Pay-as-You-Go Act of 2010, or Paygo, the Office of Budget and Management has to order automatic spending cuts if legislation passed by Congress is set to increase the deficit and the rules aren’t waived or the loss isn’t covered by new revenue. According to a Congressional Budget Office analysis, spending cuts would have to total $136 billion for a bill, such as the tax legislation, that increases the deficit by $1.5 trillion over a decade.
What would get cut? Some programs, like Social Security and unemployment benefits, are spared. But plenty of others are seriously exposed. While there are limits on how much Medicare would be pared back, it would still be slashed by $25 billion.
The rest of the $111 billion would have to come from other mandatory government programs, and because most have no protection, they would be reduced to barely any funding or nothing at all. That includes block grants for things like Meals on Wheels, farm aid like the crop insurance fund, the Temporary Assistance for Needy Families program and the National Flood Insurance Program.
Some of the reductions would be huge: the Department of Justice’s Crime Victims Fund, which gives states money to help victims with medical expenses and counseling, faces a $13.5 billion cut. Others have sources of funding that aren’t subject to Paygo but still take a hit, like the Women, Infants and Children program that provides food to low-income mothers and would be cut by $1 million.
Some cuts would probably rankle Mr. Trump as much as anyone else. Border protection would face a potential $1.3 billion cut. Immigration and Customs Enforcement would be slashed by $318 million. H-1B visa fraud protection would be cut by $45 million.
All of this happens without Congress lifting another finger. The Republican leaders Mitch McConnell and Paul Ryan have claimed that Paygo cuts won’t happen because Congress will waive them. But that requires help from Democrats, who have been completely shut out of tax reform and may have little appetite for cooperation.
Many Republicans have claimed that the tax bill won’t cost the government any extra money. The Treasury Department put out a one-page paper on the Senate-passed version that said it would be paid for by economic growth. But the threadbare analysis was able to come to that conclusion only by assuming that Congress passed other legislation, such as an infrastructure bill.
All nonpartisan analyses say otherwise. The conservative Tax Foundation found that the Republican bill will reduce government revenues by $1.47 trillion over a decade, and even assuming growth helps cover the cost it would still come up $448 billion short. The Penn Wharton Budget Model finds that it will cost at least $1.8 trillion over 10 years. The nonpartisan Joint Committee on Taxation found that the Senate-passed version — which differed a bit from the final legislation, but not enough to radically change the numbers — would not pay for itself, costing about $1 trillion.
If these models are right and the bill does add to the deficit, Republicans have already said they’ll cut government spending further.
Jeb Hensarling, Republican of Texas, has insisted that the cost of the tax bill will be covered by economic growth. But, he told Bloomberg, “If not, as a Republican, the answer would be less spending, not more tax.”
Others have admitted that no matter what happens, they’ll call for spending cuts. Marco Rubio told an audience in late November that tax reform is only one side of the Republican plan; the other is to reduce government programs: “You are still going to have a debt problem in the absence of spending cuts.”
Mr. Ryan sounded the same note, saying, “We’ve got a lot of work to do in cutting spending.” Mark Sanford, Republican of South Carolina, was even more blunt. Will the tax bill “help on the margin? Yes. Will it do as much as people advertise? Probably no,” he said. “The real conundrum that we still have to deal with if you really care about debt and deficit is spending.”
Republicans so far haven’t decided exactly what will get the ax. “We’re going to have to get back next year at entitlement reform, which is how you tackle the debt and the deficit,” Mr. Ryan recently said, specifying “health care entitlements” in particular. Orrin Hatch singled out “liberal programs” for the poor.
That could mean a lot of things, but Medicare, Medicaid and Social Security are all at risk when so-called entitlements are on the cutting board.
Others, including Mr. Ryan, are also focused on what they’re calling “welfare reform,” or changes to anti-poverty programs. “For us to achieve 3 percent G.D.P. growth over the next 10 years from tax reform, we have to have welfare reform,” according to Rod Blum, Republican of Iowa.
The president is also on the welfare reform bandwagon. “We’re looking very strongly at welfare reform, and that’ll all take place right after taxes, very soon, very shortly after taxes,” he said in November.
Republicans will almost certainly focus on instituting work requirements in programs where they don’t already exist, namely Medicaid and food stamps. But most adults on Medicaid already work; those who don’t are primarily people with an illness or disability, caring for family members, in school, or retired. A work requirement will simply take health coverage away from them. Similarly, many childless adults already have to work to get food stamps. Stricter requirements will kick very poor people off the program who tend to struggle with finding a job anyway. Existing work requirements don’t help people find jobs, but simply penalize them.
Republican leaders have wanted to do this for a long time. Mr. Ryan has been salivating over cutting Medicare, Medicaid and Social Security for as long as he’s had a political career. Mr. Trump’s 2018 budget proposal, released well ahead of the tax legislation, named “welfare reform” one of its core pillars.
But now that they’ve succeeded in passing a tax package that will reduce government revenues so much, the ensuing cost will serve as the excuse to get everything else they want. They’ll count on our short memories to forget who created larger deficits in the first place. Those deficits will serve as the motivation to enact cuts they’ve sought all along. The tax bill isn’t just a regressive giveaway to corporations and the rich. It’s a Trojan horse with deep government reductions stuffed inside.
—————
wakephan09
fuck duke
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Also, dead people ain't gettin' taxed -- those who stand to inheritor are getting taxed.
wakephan09
fuck duke
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Now will you please highlight the relevant portions and perhaps explicate them for those millennials who can't be bothered to read an entire article.
ConnorEl
Well-known member
ONW
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They still need 60 votes to get through the Paygo requirement.
"Under the Pay-as-You-Go Act of 2010, or Paygo, the Office of Budget and Management has to order automatic spending cuts if legislation passed by Congress is set to increase the deficit and the rules aren’t waived or the loss isn’t covered by new revenue. According to a Congressional Budget Office analysis, spending cuts would have to total $136 billion for a bill, such as the tax legislation, that increases the deficit by $1.5 trillion over a decade."
Nevermind, the rules will 100% be waived.
"Under the Pay-as-You-Go Act of 2010, or Paygo, the Office of Budget and Management has to order automatic spending cuts if legislation passed by Congress is set to increase the deficit and the rules aren’t waived or the loss isn’t covered by new revenue. According to a Congressional Budget Office analysis, spending cuts would have to total $136 billion for a bill, such as the tax legislation, that increases the deficit by $1.5 trillion over a decade."
Nevermind, the rules will 100% be waived.
ONW
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F'ing clown shoes.
ChrisL68
Riley Skinner
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Unless your new parent is under ifrs and they have a substantially enacted standard
ConnorEl
Well-known member
You Cannot Be Too Cynical About the Republican Tax Bill
If you can read via the link there are many links embedded in the article.
Quote
—————
The rush to enact the tax bill was designed to mask — as a break for the middle class — what is in fact a $1.4 trillion package of benefits for key donors and lobbyists, the richest members of Congress, President Trump, his family and other families like his.
The speed from introduction to passage — seven weeks, with no substantive hearings — effectively precluded expert examination of the legislation’s regressive core, its special interest provisions and the long-term penalties it imposes on the working poor and middle class through the use of an alternative measure of inflation — the “chained CPI.”
Only last Friday, when the legislation came out of conference committee and was no longer subject to amendment — and when decisive majorities of House and Senate Republicans had publicly committed to vote for the legislation — did experts and journalists begin to fully catch up with its defects.
Two days before Congress gave final approval, a group of 13 tax law experts released the most incisive critique of the tax bill to date, a 30-page document called “The Games They Will Play: An Update on the Conference Committee Tax Bill.”
The primary authors of the report — Ari Glogower, David Kamin, Rebecca Kysar, and Darien Shanske — describe the legislation as “a substantial blow to the basic integrity of the income tax” that will “advantage the well-advised in ways that are both deliberate and inadvertent.”
The authors cite a wide range of specific flaws, but their main argument is that the measure is gravely deficient at its core:
The most serious structural problems with the bill are unavoidable outcomes of Congress’s choice to preference certain taxpayers and activities while disfavoring others — and for no discernible policy rationale. These haphazard lines are fundamentally unfair and inefficient, and invite tax planning by sophisticated taxpayers to get within the preferred categories.
Glogower, Kamin, Kysar, and Shanske argue that some of the most egregious loopholes and schemes permitted by the legislation are that individual taxpayers
will be able to shield their labor income from tax by simply setting up a corporation and having their income accrue in the form of corporate profits. As a result, income that would have been taxed at the high individual rates is instead taxed at the low corporate rate.
Second, the legislation creates a huge incentive for anyone in a position to do so to change his or her status from employee to “independent contractor or a partner in a firm. The game is clear: Don’t be an employee, instead be an independent contractor or partner in a firm.” The ability to make this shift is available primarily to the well-paid.
The legislation, according to Glogower and his colleagues, also fails to present a coherent rationale:
the fundamental problem is the lack of any underlying logic in deciding who benefits from the pass-through deductions, and who does not. Independent contractors and partners benefit, but not employees. Why? An owner of real estate through a REIT benefits, but not the doctor in the building. Why? An architect benefits in some ways that a lawyer does not. And so on.
The bill encourages tax evasion. Glogower and his colleagues cite
opportunities to use rate differentials and ill-considered transitions to engage in transactions that serve to basically pump money out of the Treasury and into the pockets of well-advised taxpayers.
To provide an example, they use a company that purchased equipment under existing law, which provides them with tax breaks on the cost spread out over the years in a depreciation schedule. The new law allows companies to immediately write off the full cost of buying equipment, known as expensing.
“So,” the authors ask, “what does that mean?”
It means that old property can still get the benefit of expensing, but only if it is sold to another party. If the original owner holds it, they have to depreciate according to the old rules; if they sell it to another party, then suddenly the full cost is eligible for expensing, and the net effect is an immediate deduction of the existing tax basis of the asset. The parties can split the resulting surplus. It appears that the buyer of the asset could even lease it back to the existing owner, so that the property doesn’t even have to go anywhere.
I emailed some of the authors of this report for their individual thoughts.
Michael Kane, a law professor at N.Y.U., wrote in response that the bill will
create new incentives to shift tangible assets (and jobs) abroad. Given President Trump’s relentless message about U.S. jobs, it is incomprehensible to me that we are about to pass something that has this effect without any kind of meaningful discussion of the issue.
Daniel Hemel, a law professor at the University of Chicago, raised a crucial question about the long-term effects of the legislation’s adoption of chained CPI, a method of calculating the rate of inflation for the earned-income tax credit and other sections of the tax code that provide breaks to working- and middle-class families.
He noted that
lower and middle-income families, who are especially dependent upon inflation-indexed deductions, credits, and bracket thresholds, will feel the impact increasingly as time goes on.
In the first year, 2018, the changed inflation rate raises a relatively modest $31.5 billion but it grows every year, reaching $37 billion in 2027. “To be sure,” Hemel wrote, “this affects everyone to some degree, but most of the burden is paid for by families in the bottom four quintiles.”
In the long term, Hemel argued,
this is a very subtle way to increase taxes on the lower and middle classes and then use those revenues to pay for a massive tax cut for corporations.
What may prove even more significant is the shift to chained CPI — a less generous, slower-growing measure of inflation than the one currently in use that would result in a tax increase over time and sets a precedent for Republicans who would like to use the same method to pare back so-called entitlement programs like Social Security and Medicare. It is, in effect, a backdoor method of reducing benefits for the elderly and the disadvantaged without public scrutiny or debate.
This full-speed-ahead strategy simultaneously constrained the ability of the press to explore the special interest provisions buried in the legislation.
One exception is the work of three reporters from International Business Times — Alex Kotch, David Sirota and Josh Keefe — who have pursued this line of inquiry for the past week. A recent story disclosed that a provision inserted at the last minute into the bill stands to lower taxes on the income of 14 Republican Senators.
Along parallel lines, a liberal think tank, the Center for American Progress, now estimates that Senator Ron Johnson, Republican of Wisconsin, will get an annual tax break of somewhere between $21,500 and $205,000 based on his 2016 financial disclosure statement. The center’s calculations are based on Johnson’s reported income from three holdings he said produced a minimum of $215,002 up to a maximum of $2,050,000.
And the 2016 financial disclosure statement filed by Senator Steve Daines, Republican of Montana, shows income from real estate holdings of $487,500 to $4,305,000. If Daines’ tax cut is computed using the same method that the center used for Johnson, it would be between $47,582 and $430,500.
Not only are many senators direct beneficiaries of the legislation, but 15 of the top 20 Senate recipients of contributions from the real estate industry are Republicans, according to Open Secrets, ranging from Marco Rubio at $3.27 million to Chuck Grassley at $276,636.
Perhaps most important, the measure rewards those who need it least — the very wealthy — while leaving those most in need with modest and temporary tax breaks. The bill will diminish opportunities for social mobility by doubling the estate tax exemption, further entrenching generation after generation at the top of the income distribution.
As my colleague Jim Tankersley put it on Dec. 16, the final version of the legislation
offers little redress to workers who have grown to believe that the country’s tax law thicket advantages those with power, political connections and lawyers on retainer. Its evolution undermines a central selling point for a bill that is already seen by most Americans as unlikely to benefit them, according to polls.
The accompanying chart produced by the nonpartisan Tax Policy Center describes the distribution of the benefits by income groups over the next decade.
[you will have to go to site to see the graphic]
Despite the fact that the measure is a tax cut, the majority of Americans, 53 percent, currently disapprove of the law and 35 percent approve, according to a CBS Poll. Most Americans believe the bill will help large corporations (76 percent) and the wealthy (69 percent), while 35 percent believe it will help the middle class and 24 percent said their own families will gain.
A tax expert who insisted on anonymity in order to protect client confidentiality, emailed me his critique of the bill:
(1) The corporate rate reduction is permanent, for individuals only temporary. Completely obnoxious. In effect the money “saved” within the 10 year budget window by making those individual cuts temporary helped to underwrite the cost of making the corporate/pass though side permanent
(2) Carried interest provision. When Trump was careening around in his populist candidate mode, he promised to end it. Here is one campaign promise that he “somehow” failed to redeem when the clear and available chance presented itself.
(3) Restriction on state and C local tax deduction — consciously vindictive imposition of double taxation on citizens of certain Democratic states; corporations and pass through businesses, the darlings of the Republicans, still get to deduct those very same taxes in full.
(4) Expanding the standard deduction but financing the cost of so doing by repealing the personal exemptions is a bit of a bait and switch maneuver. Some people might be worse off.
(5) In a bill in which 100s of billions of dollars were sloshing around to provide steep tax cuts for already wealthy and highly prosperous corporations and pass through businesses, the Republicans could only find the will to raise the refundable portion of the child care tax credit from $1000 to $1400. Rubio wanted it to be raised to $2000 and his Republican brethren refused to even meet him halfway. Pitiful.
(6) Deduction for extraordinary medical expenses — retention of this deduction did not even get the five-year sunset window applied to all the other individual tax provisions, two years only. Vicious.
(7) Pass through business taxation — the bill is a massive tax gift to some of the wealthiest people in the country, who are conducting business operations in non-corporate form or are investors in same.
The tax bill not only alters the competitive structure of American industry but includes such major provisions as opening the Arctic National Wildlife Refuge in Alaska to oil drilling and the elimination of mandatory individual health insurance under Obamacare.
What amounted to three major pieces of legislation were approved by the full House and the Senate Finance Committee, “two weeks after the bill was unveiled, without a single hearing on the 400-plus-page legislation,” as Thomas Kaplan and Alan Rappeport put it in The Times.
How well does this procedure stand up to the requirements Senator Ben Sasse specified in his maiden Senate speech on Nov. 3, 2015? In it, Sasse argued that the Senate was failing in its responsibility to fully air and debate the important issues before the county, calling for what he called “a cultural recovery inside the Senate”:
One of our jobs is to flesh out competing views with such seriousness and respect that we should be mitigating, not exacerbating, the polarization that does exist ...
Good teachers don’t shut down debate; they try to model Socratic seriousness by putting the best possible construction on arguments, even — and especially — if one doesn’t hold those positions.
Or, for that matter, how well does the bill fit with Senator John McCain’s determination to lay down the law on “regular order,” as outlined in an Aug. 31 op-ed in the Washington Post? “We are proving inadequate not only to our most difficult problems but also to routine duties,” McCain wrote. Or as McCain noted during the debate over legislation to repeal Obamacare, he was calling
for a return to regular order, letting committees of jurisdiction do the principal work of crafting legislation and letting the full Senate debate and amend their efforts. We won’t settle all our differences that way, but such an approach is more likely to make progress on the central problems confronting our constituents. We might not like the compromises regular order requires, but we can and must live with them if we are to find real and lasting solutions.
So far, however, only one Republican senator has suffered real costs for deciding to vote for the tax bill.
Just over two months ago, Bob Corker drew a line in the sand on the bill: if it raised the deficit, he would vote no:
No way that Bob Corker is going to vote for a tax reform bill that I think in any way is going to add to the deficit. It’s not going to happen, never. It’s never going to happen. Never, never, ever.
On Oct. 5, Susan Davis of National Public Radio put Corker on record with a series of quotes that he may have come to regret:
This is the most passionate thing for me, period, that I work on. Not foreign policy. Not banking. It’s this deficit issue.
For Corker, this issue went way beyond routine politics: “Deficits matter,” he forcefully asserted. “They are a greater threat to us than North Korea or ISIS.”
This past week Corker has decided that the deficit is no longer “the most passionate thing for me.” Instead, he voted for a tax bill that will increase the deficit by $1.46 trillion over ten years. In a statement, Corker declared:
In the end, after 11 years in the Senate, I know every bill we consider is imperfect and the question becomes is our country better off with or without this piece of legislation. I think we are better off with it.
All of this raises a basic question. How could nearly every Republican representative — and all 52 Republican senators — support the tax bill? The best answer may be the most cynical: because it benefits key leaders, their friends, their heirs and their donors.
After looking at the legislation in its entirety — its substance and the procedures used to get there — it is difficult to conclude that the motivations of its sponsors are either benevolent or somehow in the best interests of the country. More likely it is hypocrisy and venality mixed up into one awful bill.
—————
If you can read via the link there are many links embedded in the article.
Quote
—————
The rush to enact the tax bill was designed to mask — as a break for the middle class — what is in fact a $1.4 trillion package of benefits for key donors and lobbyists, the richest members of Congress, President Trump, his family and other families like his.
The speed from introduction to passage — seven weeks, with no substantive hearings — effectively precluded expert examination of the legislation’s regressive core, its special interest provisions and the long-term penalties it imposes on the working poor and middle class through the use of an alternative measure of inflation — the “chained CPI.”
Only last Friday, when the legislation came out of conference committee and was no longer subject to amendment — and when decisive majorities of House and Senate Republicans had publicly committed to vote for the legislation — did experts and journalists begin to fully catch up with its defects.
Two days before Congress gave final approval, a group of 13 tax law experts released the most incisive critique of the tax bill to date, a 30-page document called “The Games They Will Play: An Update on the Conference Committee Tax Bill.”
The primary authors of the report — Ari Glogower, David Kamin, Rebecca Kysar, and Darien Shanske — describe the legislation as “a substantial blow to the basic integrity of the income tax” that will “advantage the well-advised in ways that are both deliberate and inadvertent.”
The authors cite a wide range of specific flaws, but their main argument is that the measure is gravely deficient at its core:
The most serious structural problems with the bill are unavoidable outcomes of Congress’s choice to preference certain taxpayers and activities while disfavoring others — and for no discernible policy rationale. These haphazard lines are fundamentally unfair and inefficient, and invite tax planning by sophisticated taxpayers to get within the preferred categories.
Glogower, Kamin, Kysar, and Shanske argue that some of the most egregious loopholes and schemes permitted by the legislation are that individual taxpayers
will be able to shield their labor income from tax by simply setting up a corporation and having their income accrue in the form of corporate profits. As a result, income that would have been taxed at the high individual rates is instead taxed at the low corporate rate.
Second, the legislation creates a huge incentive for anyone in a position to do so to change his or her status from employee to “independent contractor or a partner in a firm. The game is clear: Don’t be an employee, instead be an independent contractor or partner in a firm.” The ability to make this shift is available primarily to the well-paid.
The legislation, according to Glogower and his colleagues, also fails to present a coherent rationale:
the fundamental problem is the lack of any underlying logic in deciding who benefits from the pass-through deductions, and who does not. Independent contractors and partners benefit, but not employees. Why? An owner of real estate through a REIT benefits, but not the doctor in the building. Why? An architect benefits in some ways that a lawyer does not. And so on.
The bill encourages tax evasion. Glogower and his colleagues cite
opportunities to use rate differentials and ill-considered transitions to engage in transactions that serve to basically pump money out of the Treasury and into the pockets of well-advised taxpayers.
To provide an example, they use a company that purchased equipment under existing law, which provides them with tax breaks on the cost spread out over the years in a depreciation schedule. The new law allows companies to immediately write off the full cost of buying equipment, known as expensing.
“So,” the authors ask, “what does that mean?”
It means that old property can still get the benefit of expensing, but only if it is sold to another party. If the original owner holds it, they have to depreciate according to the old rules; if they sell it to another party, then suddenly the full cost is eligible for expensing, and the net effect is an immediate deduction of the existing tax basis of the asset. The parties can split the resulting surplus. It appears that the buyer of the asset could even lease it back to the existing owner, so that the property doesn’t even have to go anywhere.
I emailed some of the authors of this report for their individual thoughts.
Michael Kane, a law professor at N.Y.U., wrote in response that the bill will
create new incentives to shift tangible assets (and jobs) abroad. Given President Trump’s relentless message about U.S. jobs, it is incomprehensible to me that we are about to pass something that has this effect without any kind of meaningful discussion of the issue.
Daniel Hemel, a law professor at the University of Chicago, raised a crucial question about the long-term effects of the legislation’s adoption of chained CPI, a method of calculating the rate of inflation for the earned-income tax credit and other sections of the tax code that provide breaks to working- and middle-class families.
He noted that
lower and middle-income families, who are especially dependent upon inflation-indexed deductions, credits, and bracket thresholds, will feel the impact increasingly as time goes on.
In the first year, 2018, the changed inflation rate raises a relatively modest $31.5 billion but it grows every year, reaching $37 billion in 2027. “To be sure,” Hemel wrote, “this affects everyone to some degree, but most of the burden is paid for by families in the bottom four quintiles.”
In the long term, Hemel argued,
this is a very subtle way to increase taxes on the lower and middle classes and then use those revenues to pay for a massive tax cut for corporations.
What may prove even more significant is the shift to chained CPI — a less generous, slower-growing measure of inflation than the one currently in use that would result in a tax increase over time and sets a precedent for Republicans who would like to use the same method to pare back so-called entitlement programs like Social Security and Medicare. It is, in effect, a backdoor method of reducing benefits for the elderly and the disadvantaged without public scrutiny or debate.
This full-speed-ahead strategy simultaneously constrained the ability of the press to explore the special interest provisions buried in the legislation.
One exception is the work of three reporters from International Business Times — Alex Kotch, David Sirota and Josh Keefe — who have pursued this line of inquiry for the past week. A recent story disclosed that a provision inserted at the last minute into the bill stands to lower taxes on the income of 14 Republican Senators.
Along parallel lines, a liberal think tank, the Center for American Progress, now estimates that Senator Ron Johnson, Republican of Wisconsin, will get an annual tax break of somewhere between $21,500 and $205,000 based on his 2016 financial disclosure statement. The center’s calculations are based on Johnson’s reported income from three holdings he said produced a minimum of $215,002 up to a maximum of $2,050,000.
And the 2016 financial disclosure statement filed by Senator Steve Daines, Republican of Montana, shows income from real estate holdings of $487,500 to $4,305,000. If Daines’ tax cut is computed using the same method that the center used for Johnson, it would be between $47,582 and $430,500.
Not only are many senators direct beneficiaries of the legislation, but 15 of the top 20 Senate recipients of contributions from the real estate industry are Republicans, according to Open Secrets, ranging from Marco Rubio at $3.27 million to Chuck Grassley at $276,636.
Perhaps most important, the measure rewards those who need it least — the very wealthy — while leaving those most in need with modest and temporary tax breaks. The bill will diminish opportunities for social mobility by doubling the estate tax exemption, further entrenching generation after generation at the top of the income distribution.
As my colleague Jim Tankersley put it on Dec. 16, the final version of the legislation
offers little redress to workers who have grown to believe that the country’s tax law thicket advantages those with power, political connections and lawyers on retainer. Its evolution undermines a central selling point for a bill that is already seen by most Americans as unlikely to benefit them, according to polls.
The accompanying chart produced by the nonpartisan Tax Policy Center describes the distribution of the benefits by income groups over the next decade.
[you will have to go to site to see the graphic]
Despite the fact that the measure is a tax cut, the majority of Americans, 53 percent, currently disapprove of the law and 35 percent approve, according to a CBS Poll. Most Americans believe the bill will help large corporations (76 percent) and the wealthy (69 percent), while 35 percent believe it will help the middle class and 24 percent said their own families will gain.
A tax expert who insisted on anonymity in order to protect client confidentiality, emailed me his critique of the bill:
(1) The corporate rate reduction is permanent, for individuals only temporary. Completely obnoxious. In effect the money “saved” within the 10 year budget window by making those individual cuts temporary helped to underwrite the cost of making the corporate/pass though side permanent
(2) Carried interest provision. When Trump was careening around in his populist candidate mode, he promised to end it. Here is one campaign promise that he “somehow” failed to redeem when the clear and available chance presented itself.
(3) Restriction on state and C local tax deduction — consciously vindictive imposition of double taxation on citizens of certain Democratic states; corporations and pass through businesses, the darlings of the Republicans, still get to deduct those very same taxes in full.
(4) Expanding the standard deduction but financing the cost of so doing by repealing the personal exemptions is a bit of a bait and switch maneuver. Some people might be worse off.
(5) In a bill in which 100s of billions of dollars were sloshing around to provide steep tax cuts for already wealthy and highly prosperous corporations and pass through businesses, the Republicans could only find the will to raise the refundable portion of the child care tax credit from $1000 to $1400. Rubio wanted it to be raised to $2000 and his Republican brethren refused to even meet him halfway. Pitiful.
(6) Deduction for extraordinary medical expenses — retention of this deduction did not even get the five-year sunset window applied to all the other individual tax provisions, two years only. Vicious.
(7) Pass through business taxation — the bill is a massive tax gift to some of the wealthiest people in the country, who are conducting business operations in non-corporate form or are investors in same.
The tax bill not only alters the competitive structure of American industry but includes such major provisions as opening the Arctic National Wildlife Refuge in Alaska to oil drilling and the elimination of mandatory individual health insurance under Obamacare.
What amounted to three major pieces of legislation were approved by the full House and the Senate Finance Committee, “two weeks after the bill was unveiled, without a single hearing on the 400-plus-page legislation,” as Thomas Kaplan and Alan Rappeport put it in The Times.
How well does this procedure stand up to the requirements Senator Ben Sasse specified in his maiden Senate speech on Nov. 3, 2015? In it, Sasse argued that the Senate was failing in its responsibility to fully air and debate the important issues before the county, calling for what he called “a cultural recovery inside the Senate”:
One of our jobs is to flesh out competing views with such seriousness and respect that we should be mitigating, not exacerbating, the polarization that does exist ...
Good teachers don’t shut down debate; they try to model Socratic seriousness by putting the best possible construction on arguments, even — and especially — if one doesn’t hold those positions.
Or, for that matter, how well does the bill fit with Senator John McCain’s determination to lay down the law on “regular order,” as outlined in an Aug. 31 op-ed in the Washington Post? “We are proving inadequate not only to our most difficult problems but also to routine duties,” McCain wrote. Or as McCain noted during the debate over legislation to repeal Obamacare, he was calling
for a return to regular order, letting committees of jurisdiction do the principal work of crafting legislation and letting the full Senate debate and amend their efforts. We won’t settle all our differences that way, but such an approach is more likely to make progress on the central problems confronting our constituents. We might not like the compromises regular order requires, but we can and must live with them if we are to find real and lasting solutions.
So far, however, only one Republican senator has suffered real costs for deciding to vote for the tax bill.
Just over two months ago, Bob Corker drew a line in the sand on the bill: if it raised the deficit, he would vote no:
No way that Bob Corker is going to vote for a tax reform bill that I think in any way is going to add to the deficit. It’s not going to happen, never. It’s never going to happen. Never, never, ever.
On Oct. 5, Susan Davis of National Public Radio put Corker on record with a series of quotes that he may have come to regret:
This is the most passionate thing for me, period, that I work on. Not foreign policy. Not banking. It’s this deficit issue.
For Corker, this issue went way beyond routine politics: “Deficits matter,” he forcefully asserted. “They are a greater threat to us than North Korea or ISIS.”
This past week Corker has decided that the deficit is no longer “the most passionate thing for me.” Instead, he voted for a tax bill that will increase the deficit by $1.46 trillion over ten years. In a statement, Corker declared:
In the end, after 11 years in the Senate, I know every bill we consider is imperfect and the question becomes is our country better off with or without this piece of legislation. I think we are better off with it.
All of this raises a basic question. How could nearly every Republican representative — and all 52 Republican senators — support the tax bill? The best answer may be the most cynical: because it benefits key leaders, their friends, their heirs and their donors.
After looking at the legislation in its entirety — its substance and the procedures used to get there — it is difficult to conclude that the motivations of its sponsors are either benevolent or somehow in the best interests of the country. More likely it is hypocrisy and venality mixed up into one awful bill.
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