Tag: GOP tax scam

Tax Plan Aims to Slay a Reagan Target: The Government Beast

The following article by Eduardo Porter was posted on the New York Times website December 5, 2017:

President Ronald Reagan, with a replica of a federal income tax form, promoting his tax legislation in New Jersey in 1985. Credit Scott Stewart/Associated Press

It was the spring of 1985 when President Ronald Reagan first proposed to put an end to the state and local tax deduction. The idea was, to be sure, politically tricky. The provision had been around since the creation of the federal income tax in 1913, the budgetary expression of America’s celebrated federalism. As Justice Louis Brandeis might have put it, it was the federal government’s way to help pay for policy experimentation in the nation’s “laboratories of democracy.”

And yet to a Republican Party embroiled in a fundamental debate on how to shrink the government, it was an idea hard to resist: a direct shot at states’ capacity to spend. Bruce Bartlett, then a conservative tax expert who would go on to serve under Reagan and his successor, George Bush, estimated that without federal deductibility, state and local spending would fall 14 percent.

Nixing deductibility “threatens the political livelihood of spendthrift lawmakers across the nation,” Mr. Bartlett exulted at the time in an article for the Heritage Foundation. And it “would become more difficult for states to finance programs of doubtful benefit to their taxpayers by ‘hiding’ the full cost within the federal tax system.” Continue reading “Tax Plan Aims to Slay a Reagan Target: The Government Beast”

Conservative Groups Seeking Support for Tax Cuts Find It a Hard Sell

The following article by Jeremy W. Peters was posted on the New York Times website December 6, 2017:

So far, Americans for Prosperity and its field staff and volunteers have visited more than 41,000 homes and made 1.1 million phone calls. Credit Cassi Alexandra for The New York Times

MIAMI — A dozen high school students working for Americans for Prosperity, the conservative political network funded by Charles G. and David H. Koch, fanned out across the Little Havana neighborhood one day last week to make the case that the Republican tax bill was something to get excited about.

“We believe it’s time to fix our broken tax code and let families keep more of what they earn,” Barbara D’Ambrosio, a sophomore, dutifully told an elderly woman who answered the door in her slippers. After she finished her script, Barbara glanced up from the iPad she was carrying and asked if the woman would kindly call her senators to urge them to support the tax bill, which was hours away from being approved by the Senate.

The woman stared at her silently for a moment. Then she nodded, politely but unconvincingly. Continue reading “Conservative Groups Seeking Support for Tax Cuts Find It a Hard Sell”

Estimates of the Increase in Uninsured by Congressional District Under the Senate GOP Tax Bill

The following article by Emily Gee was posted on the Center for American Progress website December 5, 2017:

Mitch McConnell Credit: Reuters/Joshua Roberts

Last week, the Senate dealt a blow to health care by repealing the individual coverage mandate as part of its tax bill. The Congressional Budget Office (CBO) has estimatedthat repeal of the mandate will result in millions more uninsured over the next decade, even if Congress approves a market stabilization package. A major portion of the newly uninsured would come from the individual market, where mandate repeal would raise premiums and drive some people out of coverage altogether.

The CBO projects that 4 million fewer people would have coverage in 2019 and 13 million fewer would be covered by 2025. As a result, the share of the nonelderly population that is uninsured would swell to 16 percent by 2025, compared with about 10 percent currently. By simply allocating the 13 million proportionally across states, the Center for American Progress estimates that, on average, about 29,800 more people would be uninsured in each congressional district by 2025 under the Senate Republican tax bill. CAP previously published state-level estimates of coverage reductions due to mandate repeal here. Continue reading “Estimates of the Increase in Uninsured by Congressional District Under the Senate GOP Tax Bill”

U.S. corporations earn record high profits, pay record low taxes

NOTE:  With the passage of the U.S. House and U.S. Senate tax bills (we prefer to refer to them as scams), we thought a look at where the country’s corporations actually are would be a good idea.

The following article by Jonathan Berr was posted on the cbsnews.com website September 21, 2016:

U.S. businesses have amassed an overseas cash hoard of $2.4 trillion because they aren’t paying their fair share of taxes, according to two think tanks. But that view is at odds with how Republican Presidential nominee Donald Trump and fiscal conservatives see it. They say the U.S. corporate tax rate is too high.

The Economic Policy Institute (EPI) and Americans for Tax Fairness argue that U.S. corporate profits are at record highs while business tax revenue as a share of GDP is at record lows. Businesses can take advantage of loopholes to lower their bills to Uncle Sam, including one that enables them to indefinitely postpone the payment of taxes on profits earned overseas. The think tanks estimate that this strategy costs the U.S. Treasury about $126 billion a year in lost revenue.

“The facts show that corporate America is not overtaxed and, in fact, goes to extraordinary lengths to avoid paying what they owe,” said Frank Clemente, executive director of Americans for Tax Fairness, in a news release. “We hope this book of data can help change the false narrative on taxes peddled by wealthy corporations and their allies in Washington.”

The U.S. marginal, or statutory, corporate tax rate of 35 percent is the highest among the industrialized countries that are members of the Organization for Economic Cooperation and Development. Those who see that rate as too high have long argued that it places U.S. businesses at a competitive disadvantage.

Trump, a real estate tycoon turned reality TV star, has called for lowering the rate to 15 percent. Democratic nominee Hillary Clinton has called for corporations to pay their “fair share of taxes” and promises to make so-called inversion deals, in which businesses give up their U.S. domicile and move to a country with lower rates, harder to execute.

Like most issues regarding taxation, this one has no shortage of opinions, especially because many U.S. companies don’t pay the 35 percent rate, thanks to loopholes and other tax breaks.  A 2013 Government Accountability Office report estimated the levy that businesses actually paid — also called the effective tax rate — at 10.6 percent. At times, some Fortune 500companies have wound up paying little at all in U.S. income taxes.

“A lot of large, multinational corporations are trying to lower their tax bills,” said Hunter Blair, a budget analyst with EPI. “They’re holding out for another 2004 tax holiday,” which allowed companies to repatriate cash held abroad at a much lower rate than usual.

Apple (AAPL), Pfizer (PFE), Microsoft (MSFT) and General Electric (GE) now account for roughly one-quarter of the overseas cash pile generated by U.S. companies. According to data from Credit Suisse cited by the EPI’s Blair, about half of U.S. foreign earnings are repatriated or earmarked for future repatriation.

The U.S. is one of the few countries where companies are subject to tax on their profits regardless of where the profits occur instead of a “territorial” system that exempts foreign profits of foreign multinationals from domestic taxation. Having the highest corporate statutory rate doesn’t help matters either, according to Tax Foundation economist Kyle E. Pomerleau.

“This means if a company wants to invest in a new factory that would employ workers, it needs to think about what the additional tax will be on that next investment,” he wrote in an email. “Although the effective rate is important in many respects, it usually has little to do with how the tax impacts the economy. Reducing marginal tax rates would be beneficial regardless of what you think the level of taxation should be.”

View the post here.

Two little-known ways GOP tax bill would make chasm between rich and poor even wider

The following article by Daniel Hemel, Assistant Professor of Law at the University of Chicago, was posted on the Conversation website December 4, 2017:

Protest signs are seen in front of the office of Sen. Marco Rubio (R-Fla.) as protesters urge him and others in the U.S. Senate to vote against the $1.5 trillion tax cut. Credit:
Joe Raedle/Getty Images

The tax bill passed by the Senate in the wee hours of Dec. 2 will – if it becomes law – widen the gap between the rich and the poor at a time when income inequality is already approaching historic heights.

Initially, most U.S. households are likely to experience a modest tax cut under the Senate plan. However by 2027, the average family earning less than US$50,000 would pay about $250 more in taxes under the Senate plan, while the average family earning more than $1 million would experience a tax cut topping $8,000 a year, according to estimates from Congress’s own Joint Committee on Taxation.

Yet even those stark statistics understate the full impact of the Senate bill on long-term inequality in the United States. Continue reading “Two little-known ways GOP tax bill would make chasm between rich and poor even wider”

Is the GOP tax plan an unprecedented windfall for the wealthy? We look at 50 years of data to find out.

The following article by Andrew Van Dam was posted on the Washington Post website December 4, 2017:

The Democrats say President Trump’s tax cuts are a massive giveaway to the rich, the most unequal overhaul of the U.S. tax system in modern history. Republicans argue they are a huge middle class tax cut — “a great, big, beautiful Christmas present” for the American people, according to Trump.

Who’s right?

We decided to find out by assembling historical reports about the 10 largest tax cuts of the past 50 years.

After doing our best to find comparable data (we’ll explain metrics and methodology later), we learned a few things: Continue reading “Is the GOP tax plan an unprecedented windfall for the wealthy? We look at 50 years of data to find out.”

Sen. Chuck Grassley has no idea how wealth works

The following article by Ian Millhiser was posted on the Think Progress website December 4, 2017:

CREDIT: AP PHOTO/PABLO MARTINEZ MONSIVAIS

Sen. Chuck Grassley (R-IA) defended his vote to give a significant tax cut to dead rich people this weekend by suggesting that people who do not die wealthy blew too much of their money on leisure pursuits.

“I think not having the estate tax recognizes the people that are investing,” Grassley told the Des Moines Register in a statement that was published on Saturday, “as opposed to those that are just spending every darn penny they have, whether it’s on booze or women or movies.”

That’s a lot of sex, liquor, and cinema. Under current law, estates up to $5.49 million for an individual or nearly $11 million for a married couple are not taxed. The Senate tax bill that Grassley voted for would double this exemption to about $11 million for individuals and $22 million for married couples. According to the Washington Post, only about 1,800 families a year will pay the estate tax under the bill Grassley supported. Continue reading “Sen. Chuck Grassley has no idea how wealth works”

The new tax bill will make Americans less healthy – and that’s bad for the economy

The following article by Diane Dewar, Associate Professor of Health Policy, Management and Behavior, University at Albany, State University of New York, was posted on the Conversation website December 2, 2017:

Credit:. J. Scott Applewhite/AP

The new tax bill, passed by the Senate early Saturday, is not just about taxes. It has significant consequences for the American health care system – especially for the most vulnerable of our citizens.

If the proposed tax bill comes to fruition, it will reduce the affordability of health care for many Americans. Without access to care, our sickest and most vulnerable – especially the the poor and elderly – will suffer an increasing chance of poorer health outcomes.

What’s more, the bill’s long-term outcomes will be bad for our economy, resulting in lost productivity, lost wages and increased health care costs. If Americans become less healthy and have less access to health care, then everyone loses. Continue reading “The new tax bill will make Americans less healthy – and that’s bad for the economy”

‘I don’t think it’s going to help’: In a pro-Trump area, many voters are skeptical of GOP tax plan

The following article by Jenna Johnson was posted on the Washington Post website December 3, 2017:

Ron Stephens, 49, of Troy, Mich., looks on during a bowling game at 5 Star Lanes on Wednesday in neighboring Sterling Heights. (Sean Proctor for The Washington Post)

STERLING HEIGHTS, Mich. — On a busy weeknight at the 5 Star Lanes bowling alley in this Detroit suburb that voted heavily for President Trump, there was little excitement about the Republican plan to cut taxes.

A 60-year-old retiree bowling with a group of girlfriends said she’s tired of the middle class having to pay more so the wealthy can become even wealthier. A few lanes away, a middle-aged woman with frizzy gray hair said that the more she hears about the plan, the more she hates it. And a group of young guys in matching shirts said they didn’t even know the proposal was in the works, although they seemed skeptical that their taxes would ever go down in a meaningful way. Continue reading “‘I don’t think it’s going to help’: In a pro-Trump area, many voters are skeptical of GOP tax plan”

Tax Bill Offers Last-Minute Breaks for Developers, Banks and Oil Industry

The following article by Jesse Drucker and Patricia Cohen was posted on the New York TImes website December 2, 2017:

A drilling rig in Texas. A late amendment in the Senate tax bill would allow certain income from gas and oil ventures to qualify for lower rates. Credit Ernest Scheyder/Reuters

The overhaul by Republican lawmakers of the nation’s tax laws percolated for weeks with virtually no public input, and by the end it turned into a chaotic mad dash with many last-minute changes on Friday night and Saturday morning, some handwritten in the margins of the nearly 500-page bill.

Even hours after the Senate vote, tax experts were scratching their heads over precisely what had made it into the final version of the bill and the impact of some significant provisions.

Still, it was clear that many changes expanded tax benefits for the wealthiest taxpayers, while other attempts to close loopholes fell by the wayside. The bill would add $1 trillion to deficits over the coming decade. Continue reading “Tax Bill Offers Last-Minute Breaks for Developers, Banks and Oil Industry”