Tag: GOP trickle down economics

The GOP tax plan, state and local taxes deductions – and you

The following article by Capri Cafaro, Executive in Residence at American University, was posted on the Conversation website December 7, 2017:

The Capitol is seen at dawn on October 30, 2017, in Washington. Credit: AP/J. Scott Applewhite

While Washington is claiming victory, states are crying foul.

Late last week, the U.S. Senate passed its version of the tax reform package that cleared the House a few weeks earlier. Within the hundreds of pages of legislative language in each bill lay a number of provisions that have significant impact on state governments, including modifications to the state and local tax deduction.

Under current tax law, individuals who choose to itemize and deduct eligible expenses on their federal tax return are able to deduct state and local income, sales and property taxes. Both the House and Senate billseliminate the so-called “SALT deduction” for state and local taxes while capping the property tax deduction at US$10,000.

As a former Ohio state senator, I served on the Senate Ways and Means Committee for a number of years. I also went through five state budget cycles over 10 years. Because of that experience, I believe the federal changes to the SALT deductions will be detrimental to American families and have long-term negative impacts on balancing state budgets. Continue reading “The GOP tax plan, state and local taxes deductions – and you”

After cutting taxes, Trump looking to localities to raise revenue for infrastructure

The following article by John Wagner was posted on the Washington Post website December 7, 2017:

President Trump capped off his infrastructure week with an address at the Department of Transportation on June 9. (Reuters)

Even as President Trump and Republicans in Congress seek to cut federal taxes, the White House has quietly come up with a very different plan for infrastructure: It wants to reward states and localities willing to raise taxes or other revenue to pay for new projects.

The dynamic is key to the Trump administration’s latest thinking on an infrastructure bill aimed at spurring a $1 trillion investment in the nation’s ailing roads, bridges, rail lines and airports. Originally touted by Trump as a first-100-days initiative — and one with the prospect for bipartisan support — it has stalled amid other bruising legislative battles. Continue reading “After cutting taxes, Trump looking to localities to raise revenue for infrastructure”

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”

Tax Plan Crowns a Big Winner: Trump’s Industry

The following article by Patricia Cohen and Jesse Drucker was posted on the New York Times website December 5, 2017:

A real estate investment trust helped rescue a stake held by Kushner Companies in 666 Fifth Avenue in Manhattan. Such trusts would get new advantages under Republican tax legislation. Credit Karsten Moran for The New York Times

After a frenzy of congressional action to rewrite the tax code, salesclerks and chief executives are calculating their gains. Business was treated with the everyone’s-a-winner approach that ensures no summer camper goes home without a trophy.

Some got special prizes. Cruise lines, craft beer and wine producers (even foreign ones), car dealers, private equity, and oil and gas pipeline managers did particularly well. And perhaps the biggest winner is the industry where President Trump and his son-in-law, Jared Kushner, made their millions: commercial real estate.

House and Senate Republicans, in their divergent bills, both offered steeply reduced rates to corporate giants, partnerships and family-owned firms across the board. But when it came time to eliminate special breaks or impose tighter standards, real estate was generally excused from the room. Continue reading “Tax Plan Crowns a Big Winner: Trump’s Industry”

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”

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.”

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”