With 2017’s tax overhaul permanently reducing the federal corporate income tax rate from 35 percent to 21 percent, the personal-finance website WalletHub today released its latest Corporate Tax Rate Report.
The report provides an in-depth analysis of the 2017 federal, state and international tax rates paid by the S&P 100 companies, the largest and most established businesses in the U.S.
Companies Paying the Highest Taxes (Overall Tax Rate)
Companies Paying the Lowest Taxes (Overall Tax Rate)
1
American International Group Inc. (513.4%)
1
Charter Communications Inc. (-883.9%)
2
Halliburton Co. (165.8%)
2
The Kraft Heinz Co. (-98.7%)
3
Citigroup Inc. (129.1%)
3
AT&T Inc. (-97.2%)
4
Eli Lilly and Co. (109.3%)
4
Berkshire Hathaway Inc. (-90.3%)
5
General Motors Co. (97.2%)
5
Pfizer Inc. (-73.5%)
6
Johnson & Johnson (92.6%)
6
Comcast Corp. (-49.5%)
7
Kinder Morgan Inc. (89.7%)
7
Verizon Communications Inc. (-48.3%)
8
Abbott Laboratories (84.2%)
8
MetLife Inc. (-41.6%)
9
The Coca-Cola Co. (82.5%)
9
Union Pacific Corp. (-40.4%)
10
Caterpillar Inc. (81.8%)
10
DowDuPont Inc. (-39.9%)
Key Stats
The overall tax rate that S&P 100 companies pay is around 39 percent.
S&P 100 companies pay roughly 65 percent lower rates on international taxes than U.S. taxes.
Tech companies, including Facebook Inc., Apple Inc. and Cisco System Inc., are still paying more than 15 percent lower rates abroad, continuing the trend from 2013, 2014, 2015 and 2016.
More than ten S&P 100 companies are actually paying a negative overall tax rate and are therefore due a discrete net tax benefit: Charter Communications Inc., The Kraft Heinz Co., AT&T Inc., Berkshire Hathaway Inc., Pfizer Inc., Comcast Corp., Verizon Communications Inc., MetLife Inc., Union Pacific Corp., DowDuPont Inc., Netflix Inc., NextEra Energy Inc., Exxon Mobil Corp., Altria Group Inc., Exelon Corp. and Chevron Corp.
The average S&P 100 company pays a 77 percent higher tax rate than the top 1 percent of consumers.
A woman holds a sign at a protest of the "Trump tax scam" on Dec.4, 2017. (Photo: CDEL Family/Flickr/cc)
As President Donald Trump and Republican leaders make clear that they intend to enact deep cuts to Medicare, Medicaid, and Social Security after next month's midterms in a supposed effort to rein in the soaring deficit—which has ballooned largely due to Trump's $1.5 trillion tax law—a survey published on Friday found that nearly two-thirds of Americans would prefer repealing the Republican tax cuts over slashing the safety net.
Conducted by NPR, PBS NewsHour, and Marist, the poll found that 60 percent of Americans would rather eliminate Trump's tax cuts than gut safety net programs to reduce the federal budget deficit. Just 21 percent of Americans said they would rather slash the safety net than repeal Trump's tax cuts, which have overwhelmingly benefited the rich and corporations.
The new survey comes just over a week after Senate Majority Leader Mitch McConnell (R-Ky.) blamed the nation's rising budget deficit on Medicare, Medicaid, and Social Security and declared that these programs must be cut to bring federal spending under control. Trump echoed McConnell just 24 hours later, promising "a lot" of spending cuts after the midterm elections.
Working families shouldn't have to pay for the #GOPTaxScam's bill. The rich and big corporations must pay their fair share of taxes! https://t.co/c1O6O5TQHm
These disproportionate rewards for the rich likely explain why Republican candidates have "barely" been mentioning the tax law with just 10 days left before the Nov. 6 midterms.
"When you vote for bunk economics," concluded Patriotic Millionaires, "don't expect it to be an electoral boon."
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Hard to believe, but the Trump administration is proposing yet another massive tax windfall for the rich.
It would be to reduce their capital gains taxes. Those are taxes on the increased value of their stocks and bonds, businesses, and other valuables, when they sell them. Trump would do this by eliminating whatever portion of that increased value was due to inflation.
Here are three reasons why reducing capital gains taxes would be another tax scam for the rich.
1. The people who’d get most of the benefits are already richer than ever and pay a lower effective tax rate than they have in decades. An estimated 63 percent of the benefits of this proposal would go to the wealthiest one-tenth of 1 percent of Americans, while the bottom 80 percent of us would get only 1 percent of its benefits, according to a University of Pennsylvania Wharton School analysis.
If anything, Congress should raise capital gains taxes, not lower them. The capital gains tax rate is already lower than the rate on ordinary income. Yet the wealthy now own most of the nation’s assets and enjoy most of the capital gains. In 2016 (the most recent date for which data are available), the richest 10 percent owned 84 percent of the entire stock market.
2. The cost of this change would be a whopping $10 billion a year, for the next 10 years. That’s just about the yearly cost of funding free lunches for 20 million poor kids. Yet the federal debt is already ballooning. Over ten years, this proposal would increase it by an estimated $100 to $300 billion.
3. Trump and his administration say they have the power to make this change by themselves without even being authorized to do so by Congress. Rubbish. Congress has already decided that capital gains taxes should not be indexed for inflation. That’s why, when the same idea came up during the George H.W. Bush administration, the Department of Justice’s Office of Legal Counsel stopped it cold.
It’s another big handout to the wealthy, another huge increase in the federal deficit, and it’s illegal. Don’t let Trump and his enablers get away with this tax scam for the rich.
Published on Friday, August 31, 2018 by Common Dreams
"Trump wants to send another kiss to the rich—unilaterally, without any approval from Congress. He ignores the law, governs for the top one percent, and doesn't give a hoot about the rest of us."
"Hours after cheating millions of middle class workers, Trump wants to send another kiss to the rich—unilaterally, without any approval from Congress," Rep. Bill Pascrell (D-N.J.) wrote on Twitter late Thursday. (Photo: Chip Somodevilla/Getty Images)
"Trump himself has pocketed millions over the years grifting off of taxpayers, but now he wants to make it harder for workers to get ahead." —Sen. Bernie Sanders
"Trump himself has pocketed millions over the years grifting off of taxpayers, but now he wants to make it harder for workers to get ahead." —Sen. Bernie Sanders"There are a lot of people that love it and some people that don't," Trump said of the plan, which would disproportionately reward the top 0.01 percent of Americans. "But I'm thinking about it very strongly."
Trump's Oval Office interview with Bloomberg came shortly after the president announced in a letter to congressional leaders that he is freezing a planned 2.1 percent pay increase for federal workers just ahead of Labor Day, claiming that "federal agency budgets cannot sustain such increases."
"Hours after cheating millions of middle class workers, Trump wants to send another kiss to the rich—unilaterally, without any approval from Congress," Rep. Bill Pascrell (D-N.J.) wrote on Twitter late Thursday. "He ignores the law, governs for the top one percent, and doesn't give a hoot about the rest of us."
In a Facebook post responding to Trump's decision to cancel federal employees' pay raise—which was set to take effect in 2019—Sen. Bernie Sanders (I-Vt.) wrote that Trump is once again "making it clear he has no interest in supporting working people."
"Trump himself has pocketed millions over the years grifting off of taxpayers, but now he wants to make it harder for workers to get ahead," Sanders added. "Trump and his Republican friends in Congress didn't have any problem finding $1.5 trillion in tax giveaways for the wealthiest people and hugely profitable corporations, but suddenly they don't have enough money to pay fair salaries to hardworking public servants."
In a Twitter thread on Thursday, Seth Hanlon, a senior fellow at the Center for American Progress, detailed why indexing capital gains to inflation is "both terrible policy and illegal":
Here, tax economist Len Burman explains why indexing capital gains would worsen inequality (since millionaires pay 77% of cap gains taxes), would add to budget deficits, and open up new tax shelters for the wealthy. 2/https://t.co/JHS3ROyIq9pic.twitter.com/F7xAMJDEoa
The Penn-Wharton team also found that the proposal would cost up to $102 billion, with a stunning 63% of the tax benefit going to the top 0.1%, 86% going to the top 1%, and 95% going to the top 5%.https://t.co/xPKFKCQOdD 5/
Indexing capital gains by executive fiat is also totally illegal, as George H.W. Bush's Treasury Department and his Justice Department's Office of Legal Counsel determined in 1992:https://t.co/TIdgqLV3Sa 6/
What will happen if the blue wave in the midterm elections falls short? Clearly, at this point it still might: Democrats will surely receive more votes than Republicans, but thanks to gerrymandering and population geography, the U.S. electoral system gives excess weight to rural, white voters who still have faith in President Trump. What if, thanks to that excess weight, the minority prevails?
One answer, obviously, is that the unindicted co-conspirator in chief will continue to be protected from the law. And for those concerned with the survival of American democracy, that has to be the most important issue at stake in November. But if the G.O.P. hangs on, there will also be other, bread-and-butter consequences for ordinary Americans.
First of all, there is every reason to believe that a Republican Congress, freed from the immediate threat of elections, would do what it narrowly failed to do last year, and repeal the Affordable Care Act. This would cause tens of millions of Americans to lose health insurance and would in particular hit those with pre-existing conditions. There’s a reason health care, not Trump, is the central theme of Democratic campaigns this year.
But the attack on the social safety net probably wouldn’t stop with a rollback of Obama-era expansion: Longstanding programs, very much including Social Security and Medicare, would also be on the chopping block. Who says so? Republicans themselves.
In a recent interview with CNBC’s John Harwood, Representative Steve Stivers, the chairman of the National Republican Congressional Committee — in effect, the man charged with containing the blue wave — declared that, given the size of the budget deficit, the federal government needs to save money by cutting spending on social programs. When pressed about whether that included Social Security and Medicare, he admitted that it did.
And he’s not alone in seeing major cuts in core programs for older Americans as the next step if Republicans win in November. Many major figures in the G.O.P., including the departing speaker of the House, Paul Ryan, and multiple senators, have said the same thing. (Meanwhile, groups tied to Ryan have been running attack ads accusing Democrats of planning to cut Medicare funding — but hey, consistency is the hobgoblin of little minds. So, apparently, is honesty.)
Now, Republicans who call for cuts in social spending to balance the budget are showing extraordinary chutzpah, which is traditionally defined as what you exhibit when you kill your parents, then plead for mercy because you’re an orphan. After all, the same Republicans now wringing their hands over budget deficits just blew up that same deficit by enacting a huge tax cut for corporations and the wealthy.
So it might seem shocking that only a few months later they’re once again posing as deficit hawks and calling for spending cuts. That is, it might seem shocking if it weren’t for the fact that this has been the G.O.P.’s budget strategy for decades. First, cut taxes. Then, bemoan the deficit created by those tax cuts and demand cuts in social spending. Lather, rinse, repeat.
This strategy, known as “starve the beast,” has been around since the 1970s, when Republican economists like Alan Greenspan and Milton Friedman began declaring that the role of tax cuts in worsening budget deficits was a feature, not a bug. As Greenspan openly put it in 1978, the goal was to rein in spending with tax cuts that reduce revenue, then “trust that there is a political limit to deficit spending.”
It’s true that when tax cuts are on the table their proponents tend to deny that they’ll increase the deficit, claiming that they’ll provide a miraculous boost to the economy and that tax receipts will actually rise. But there’s not a shred of evidence to support this claim, and it has never been clear whether anyone with real political power has ever believed it. For the most part it’s just a smoke screen to help conceal the G.O.P.’s true intentions.
The puzzle is why Republicans keep getting away with this bait-and-switch.
Fifteen years ago I wrote a long piece titled “The Tax-Cut Con,” describing what was even then a time-honored scam; it reads almost word for word as a description of Republican strategy in 2017-18. Yet I keep reading news analyses expressing puzzlement that men who were strident deficit hawks in the Obama years so cheerfully signed on to a budget-busting tax cut under Trump. To say the obvious: These men were never deficit hawks; it was always a pose.
And the gullibility both of the news media and self-proclaimed centrists remains a remarkable story. Remember, Ryan, who was utterly orthodox in his determination to cut taxes on the rich while savaging programs for the poor and the middle class, even received an award for fiscal responsibility.
Which brings us back to the midterm elections. Rule of law is definitely on the ballot. So is health care. But voters should realize that the threat to programs they count on is much broader: If the G.O.P. holds its majority, Social Security and Medicare as we know them will be very much in danger.
Paul Krugman has been an Opinion columnist since 2000 and is also a Distinguished Professor at the City University of New York Graduate Center. He won the 2008 Nobel Memorial Prize in Economic Sciences for his work on international trade and economic geography. @PaulKrugman
Most of that money went to rich people. What if you turned it around and gave most of that money to the poor and middle class. With Republican tax cuts the logic is that since rich people pay proportionately more taxes than the poor, they should get proportionately a larger tax cut. That leaves the poorest of the poor, who pay no taxes, with no tax cut at all. But what if you took that trillion and a half dollars and used it for supplements instead of cuts? Then the poorest people would get the largest supplement and rich people, who don't need the money, would get the least. It would still cost the government $1.5 trillion, but the most needy would be helped the most and the least needy would be helped the least.
Senate Republicans’ $1.5 trillion tax cut would not pay for itself, according to a report released on Thursday by the nonpartisan Joint Committee on Taxation. The report is a significant setback for Republicans, who have asserted that the tax cuts would grow the economy enough to cover the cost of the plan.
The report of the committee, Congress’s official tax scorekeeper, is the latest in a number of analyses that have found that the cuts could add a significant chunk to federal budget deficits, a move that would seem counter to years of Republican criticism of the deficits accumulated under the Obama administration.
In the Congressional Budget Office’s analysis of the Senate tax bill, the cuts would add $1.414 trillion to the deficit by 2027. That estimate does not include the amount that would be offset by the economic growth spurred by tax cuts.
This money going mainly to the rich does not take into account that most rich people park their money offshore in places like the Cayman Islands so that they pay no taxes at all. In fact rich corporations use loopholes and highly paid accountants to figure out how they get tax refunds from the government. Or they pay taxes in Europe where the tax rate is cheaper. They can book their profits anywhere so why not book them where they pay little or no taxes. That wouldn't be in the US.
The biggest taxpayer was the most profitable: Apple, which reserved $15.8 billion for income taxes on $59 billion in operating income. Apple reports its effective tax rate as 25.8%, which is quite a bit lower than the statutory 35% rate. The iPhone giant (like many tech companies with a lot of intellectual property) has become famous over the years for deploying legions of accountants to devise offshore tax avoidance mechanisms with names like “double Irish with a Dutch sandwich.” Why book profits in the U.S. if you don’t have to? Unfortunately for Apple, its pot of Irish gold appears to have evaporated. Last year the European Commission presented Apple with a $13 billion tax bill, payable to Dublin, on the grounds that Apple's tax structure had benefited from "state aid," a no-no. CEO Tim Cook has called it "total political crap."
These tax avoidance schemes serve to make the rich richer and to run up the national debt which is now over $20 trillion. Some day the chickens will come home to roost.
A trillion dollars, a figure with twelve zeros after a one, is by any measure a ton of money. It’s near impossible to comprehend how much a trillion is.
So, it’s admittedly hard to comprehend a new report that tallies the combined tax cuts of the Bush, Obama, and Trump administrations from the year 2000 to the time they’re fully implemented in 2025 at over $10 trillion. Of that $10 trillion, the Institute on Taxation and Economic Policy found, a whopping $2 trillion will have gone exclusively to the top 1 percent.
Sounds like big numbers, huh?
The Endowment for Human Development offers some tidy tips for visualizing a trillion. They point out that if you took a trillion one-dollar bills and laid them end-to-end, it would measure longer than the distance from the earth to the sun.
Spending a trillion dollars, at a rapid-fire clip of $20 per second, would take more than 1,500 years before you ran out of money.
So yes, when we’re talking about trillions, we’re talking about a lot, a lot, a lot of money. And what this new report really shows is a metric-crap-ton of cash going to the already exceptionally wealthy. That’s a problem.
The past four decades have seen a dramatic increase in income and wealth inequality as the rich have continued to get richer while the rest of the economy has stagnated. The lopsided tilt of the tax code plays no small part.
As this new report points out, it’s not just the Trump tax cuts. Bush cut taxes too, especially for the rich, and Obama extended many of the Bush tax cuts.
And at last the results have arrived. Put very simply, the top 1 percent of households will pay $111 billion less this year alone in federal taxes combined than they would have if the laws had remained unchanged since 2000.
The wealthiest households and most profitable corporations have gotten big tax breaks while everyone else remains relatively stagnant.
The Trump tax cuts have rightfully generated a tremendous amount of press coverage. A lot of that press coverage has accurately pointed out that the tax cuts overwhelmingly benefit the rich. Trump’s claims that his tax package would usher in wage and job growth have been proven utterly false. Instead, the wealthiest households and most profitable corporations have gotten big tax breaks while everyone else remains relatively stagnant.
Why should you care about the tax status of the ultra-wealthy?
Consider what gets lost when funds are diverted from the public good to private fortunes.
Since the Trump cuts were passed last December, Congress has debated a budget that includes major cuts to Medicaid, Medicare, and Social Security. They’ve considered cuts to programs families depend on to live — like Supplemental Nutrition Assistance Program (SNAP) and the Women, Infants, and Children (WIC) program, which provides nutrition assistance to half the babies born in the United States.
It’s not an exaggeration to say that choosing to cut taxes on the rich while cutting vital programs is taking food out of babies’ mouths.
It’s not an exaggeration to say that choosing to cut taxes on the rich while cutting vital programs is taking food out of babies’ mouths.
Meanwhile, our nation’s transportation infrastructure is in shambles. The American Society of Civil Engineers gives the country’s infrastructure a D+ and calls for $2 trillion in increased investment over ten years to get back up to a passing grade. That number sounds familiar doesn’t it?
So, ask yourself, would you rather have the wealthiest 1 percent be $2 trillion wealthier, or would you rather have safe and sound roads and bridges?
Hindsight is helpful, but only if we put its lessons into practice. Will we repeat our mistakes of the past 20 years and head further towards extreme inequality? Or will we invest in our public good and ask those at the top pay their fair share?
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"This proposal is a shameful betrayal of children. This administration and congressional Republicans passed a massive tax giveaway to their donors and big corporations, and now they want vulnerable children to pay for it."
President Donald Trump, flanked by House Ways and Means Committee Chairman Rep. Kevin Brady (R-Texas) and House Speaker Paul Ryan applaud in the Rose Garden of the White House. (Photo: Evan Vucci/AP)
Months after ramming through deficit-exploding tax cuts for billionaires and large corporations, President Donald Trump and the GOP are now looking for programs to slash to make up the difference—and they're starting with children's healthcare.
According to a Washington Post report late Monday, Trump is "sending a plan to Congress that calls for stripping more than $15 billion in previously approved spending," $7 billion of which would come from the broadly popular Children's Health Insurance Program (CHIP).
"Not much surprises me anymore in American politics. But this is despicable on every level," wrote Rep. Barbara Lee in response to Trump's proposed cuts. "But this is despicable on every level."
The #GOPTaxScam gave a trillion dollars to billionaires & massive corporations. Now, Republicans want to gut the Children’s Health Insurance Program to pay for it.
Not much surprises me anymore in American politics. But this is despicable on every level. https://t.co/8KhY2xz4OM
Described by one Trump administration official as "the biggest rescission request that has ever been sent to Congress," the proposal needs a mere majority in both the House and Senate to pass.
Speaking with the Post on Monday, Rep. Mark Walker (R-N.C.) said the Trump administration has assured Republicans that this package of spending cuts is just the first of many.
As the Post reported, CHIP and is just one over over 30 programs the White House is moving to slash.
"This proposal is a shameful betrayal of children," Sen. Bob Casey (D-Penn.) wrote in response to reports of Trump's proposal. "This administration and congressional Republicans passed a massive tax giveaway to their donors and big corporations, and now they want vulnerable children to pay for it."
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Amazon, led by the world's richest man, Jeff Bezos, halted expansion plans in Seattle to make clear its opposition to a proposed local tax to address the city's homelessness crisis. (Photo: David Ryder/Getty)
After Amazon stocks soared last week—making founder Jeff Bezos, the world's richest man, $12 billion richer—Sen. Bernie Sanders (I-Vt.) tweeted that the company paid no federal income tax last year, which was confirmed by independent analysis on Thursday, and comes as Amazon is trying to kill a proposed tax that aims to end Seattle's homelessness crisis.
"You know what Amazon paid in federal income taxes last year? Zero." —Sen. Bernie Sanders (I-Vt.)
"You know what Amazon paid in federal income taxes last year?" Sanders said Monday. "Zero."
"He's right," PolitiFactdeclared. "We've taken a look at a series of exaggerated claims about Amazon inthepast. But in this case, Sanders is on the money."
With no public tax return and no cooperation from Amazon, fact-checkers dug into the company's annual filings to the Securities and Exchange Commission (SEC). They found, based on a February 2018 filing, "that not only would the company not be paying anything in 2017 federal income taxes, but it would be getting a $137 million tax refund."
PolitiFact's findings come as the company has halted massive expansion plans in its hometown of Seattle, in an apparent effort to bully the City Council into rejecting a tax measure that the New York Timesreports "would charge large employers in the city about $500 per employee, with the money going to help alleviate a housing crisis" that the company has been accused of fueling.
Amazon vice president Drew Herdener confirmed to the Seattle Times "that pending the outcome of the head-tax vote by City Council, Amazon has paused all construction planning on our Block 18 project in downtown Seattle and is evaluating options to sublease all space in our recently leased Rainier Square building." Those moves are jeopardizing plans to add 7,000 to 8,000 local jobs.
"You know what Amazon paid in federal income taxes last year? Zero." —Sen. Bernie Sanders (I-Vt.)
"I'm deeply concerned about the impact this decision will have on a large range of jobs—from our building trades, to restaurant workers, to nurses, manufacturing jobs, and tech workers," Mayor Jenny Durkan, who has supported the tax measure, responded in a statement.
"At the same time, our city must urgently address our homelessness and affordability crisis and lift up those who have been left behind. I fundamentally believe we can do both by working together," Durkan added, vowing to convene meetings with community leaders "to see how we might forge common ground in dealing with our challenges while keeping jobs."
Our Revolution, the progressive political group that grew out of Sanders' 2016 presidential run, noted that "Amazon is on pace to be the first trillion dollar company—which makes it all the more despicable that it's extorting the city of Seattle over a modest tax to fund affordable housing in the city."
Sanders also weighed in on the company's recent decisions, tweeting: "This is what corporate power and oligarchy is all about."
Amazon is using its enormous power to dissuade the city of Seattle from passing a modest tax on profitable corporations to address their severe housing crisis. This is what corporate power and oligarchy is all about. https://t.co/qVNxMX5CKZ
Published on Friday, March 30, 2018 by Common Dreams
"While most of the corporate tax cuts flow to the top of the income distribution, what this shows is that even in the direct changes to the individual-side of the tax code, most of those changes are still being allocated to the top."
As the Washington Post's Jeff Stein noted in a breakdown of TPC's analysis on Friday, the tax break for the wealthiest is even larger—$51,140—when the corporate tax cuts and the reduction of the estate tax are factored in. (Photo: Stop the GOP Tax Scam)
In its first analysis of how the GOP tax plan will affect Americans' personal income taxes alone, the nonpartisan Tax Policy Center (TPC) this week underscored what experts and most of the public already knew: that the Republican tax law will pour tens of thousands of extra dollars into pockets of the wealthy few while providing mere crumbs for the poor.
Specifically, according to TPC's new report, the top one percent of earners will receive an average annual tax cut of around $33,000 just from individual tax changes under the GOP law. The poorest Americans, by contrast, will see an average break of about $40 per year.
"While most of the corporate tax cuts flow to the top of the income distribution, what this shows is that even in the direct changes to the individual-side of the tax code, most of those changes are still being allocated to the top," Kim Rueben, a senior fellow at TPC, told the Washington Post.
The Postpublished a visual of the disproportionate gains seen by those at the very top:
As the Post's Jeff Stein noted in a breakdown of TPC's analysis on Friday, the tax break for the wealthiest is even larger—$51,140—when the corporate tax cuts and the reduction of the estate tax are factored in.
TPC's analysis of the Republican tax plan—which President Donald Trump signed into law last December—comes as profitable companies continue their stock buyback binge while most Americans report seeing very few if any changes in their paychecks.
Despite Treasury Secretary Steve Mnuchin's promise that Americans would start seeing a positive bump in their checks no later than February 15, the majority of the public said they have yet to see any boost from the GOP tax law, according to a CNBC poll published on Tuesday.
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The tech conglomerate Amazon, headed by the world's richest man, Jeff Bezos, released a shortlist of 20 cities that could be the new home of the company's second headquarters on Thursday. (Photo: David Ryder/Getty)
Critics of Amazon's "race to the bottom" as it searches for a home for its second headquarters said on Thursday that the company's newly released shortlist of 20 cities highlights a crisis in the U.S. economy—one exemplified by the huge incentives offered to Amazon in the bidding war among potential hosts.
Rep. Keith Ellison (D-Minn.) was among those slamming Amazon and the state and local governments willing to give billions of dollars in tax breaks to the extremely wealthy multinational company.
Tax breaks to Amazon promised by New Jersey: $7 billion. Tax breaks promised by Illinois: $2 billion. Something is deeply wrong with our economy & democracy when local governments offer up their tax base to a corporation worth over $500 billion. https://t.co/csnETiF5zT
In addition to the incentives mentioned by Ellison, Boston offered $75 million to provide affordable housing to Amazon employees, while Maryland's offer exceeded $5 billion.
Some noted that Amazon's top 20 contenders—also including New York, Los Angeles, Atlanta, and Raleigh, N.C.—are fairly prosperous cities, with the company leaving out areas that could benefit from an influx of jobs and economic activity.
Compare Amazon's HQ2 finalist map with a map of where 50% of our GDP is coming from. Notice anything striking? It's kind of like the GOP tax reform. We just love to throw money where the most money is already piled instead of where it's most needed.#AmazonHQ2#inequalitypic.twitter.com/RmlVUKtQ1u
After Amazon announced its search in September, promising to bring 50,000 jobs to the city it chose for its $5 billion headquarters, groups including Jobs With Justice and the Working Families Party released their own set of demands for the company.
As Common Dreamsreported, the groups asked the company to "reserve a substantial number of construction jobs for local residents, especially underrepresented people of color and women," protect the right to form unions, pay living wages, and—in light of reports of unsafe conditions at Amazon warehouses—"allow independent, third party organizations to conduct health and safety trainings."
But as Lina Khan of the Open Markets Institute noted last month on Ellison's podcast, We the Podcast, Amazon's meteoric rise has been due largely to unfair business practices—leaving critics skeptical of the idea that Amazon's arrival in one of the 20 finalist cities will actually benefit those who call it home.
"In many instances, Amazon has gotten where it is because it has undertaken business practices and forms of conduct that previously used to be illegal," Khan said.
"In many instances, Amazon has gotten where it is because it has undertaken business practices... that previously used to be illegal."
A protester holds a sign during a demonstration outside of an Apple Store on April 15, 2014 in San Francisco, California. Over a dozen activists staged a demonstration outside of an Apple Store demanding that Apple Inc. pay taxes on money being held in overseas accounts. (Photo: Justin Sullivan/Getty Images)
Tech giant Apple made international headlines and inspired President Donald Trump to brag overnight about his role in making it all possible after announcing it would pay approximately $38 billion in taxes as it repatriates large sums of overseas cash holdings—but that dollar figure is less than half of what tax analysts say the country should be paying for those earnings.\
The repatriation measure included in the "tax scam" law passed by Republicans and signed by Trump last year will result in a multinational corporations receiving an overall estimated tax cut of $413 billion.
According to estimates, Apple has kept more than $252 billion in profits overseas in order to avoid paying U.S. taxes. But with the Trump and GOP lowering the repatriation tax rate from 35% down to 15.5%, the lobbying by powerful and wealthy corporations—including Apple—is finally paying dividends. As Ars Technicanotes, Apple didn't really have a choice about this. "Under the new tax bill," the outlet noted, "all overseas cash is subject to a one-time 15.5 percent tax whether Apple leaves it overseas or moves it to the United States."
But as pointed out by Richard Phillips, senior analyst at the Institute on Taxation and Economic Policy (ITEP), there's even more to these numbers than most are reporting or pointing out:
We estimate that Apple owes about $78.6 billion in taxes on their accumulated offshore earnings (https://t.co/Lnqb4GYXRU), so if they pay $38 billion under the new tax bill (https://t.co/4p1MXgvfTQ), that equals a tax break of about $40.6 billion.
As the analysis Phillips references warns, the repatriation measure included in the "tax scam" law passed by Republicans and signed by Trump last year will result in multinational corporations receiving an overall estimated tax cut of $413 billion.
A Senate investigation found that Apple already has between 75% and 100% of their "offshore earnings" invested in the United States. Really the tax bill just gave Apple a huge tax windfall. https://t.co/DZGAKUifS7https://t.co/USoNCb21WH
"We have a deep sense of responsibility to give back to our country and the people who help make our success possible," declared Timothy D. Cook, Apple's CEO, said in a statement on Wednesday.
But if Apple's sense of responsibility to "give back" is so deep, why avoid paying U.S. taxes on its earnings at the set rate for all these years? Of course many taxpayers around the world feel their rates are too high, but most pay their taxes dutifully nonetheless—many happily and gladly.
Perhaps, as Jason Rhodes wrote for Salon earlier this month, it's because Apple's most significant innovation over recent years is not its mind-blowing and fast-selling tech gadgets but its ability to dodge taxes across the globe. As Rhodes argues, it's very difficult to even imagine what a large number $252 billion actually is. "$252 billion. That's more than the foreign-currency reserves of Britain and Canada. A quarter trillion dollars. Sound that out in your mind, and then say it with your mouth. The phrase "quarter trillion dollars" is 22 letters and six syllables, and I'm afraid it doesn't quite do justice to the amount of capital involved."
And, he notes, "When Trump signed the Tax Cuts and Jobs Act on Dec. 22, 2017, he rewarded Apple for keeping its money overseas, away from starving Americans and veterans with health problems. And Apple was party to all of this. Last year, the Big Five Tech companies increased lobbyist spending by 24.3 percent. By the third quarter of 2017, Apple spent $2.23 million petitioning Congress."
Apple (paraphrase, not real quote): "Please applaud us for doing the right thing, which we should have done in the first place instead of 'innovating' as much in tax dodging as technology." https://t.co/I2mpE0w7DT
As journalist David Dayen warned recently, as he explored how many corporations are enjoying the GOP tax cuts even as they lay off workers or fail to increase wages, "don't let a twisted and dishonest PR scheme by massive companies grateful for Trump's huge Christmas present distort the truth."
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Published on Tuesday, December 19, 2017 by Common Dreams
Despite Republicans' efforts to portray bill as beneficial to average Americans, more than two-thirds in recent poll say the tax plan is best for the wealthy
Protesters risked arrest on Capitol Hill on Monday as they joined the final push by resistance groups to convince Republican legislators to vote against the Party's unpopular tax bill. (Photo: @NYJusticeLeague/Twitter)
Hours ahead of expected votes in the House and Senate on the Republican tax plan, a new poll released Tuesday by CNN shows that President Donald Trump's last hope at passing a major agenda item in 2017 will likely award him few points with voters. Sixty-six percent of those surveyed view the bill as mainly benefiting the wealthy.
Opposition to the bill—officially the "Tax Cuts and Jobs Act" but denounced as the "GOP Tax Scam" by critics—has gone up in the past month, with 55 percent saying they disapprove of the plan. Republicans including President Donald Trump have tried to push the narrative that the bill will lift middle class Americans, but it appears few voters are convinced—which makes sense given that nearly every independent analysis shows the benefits are wildly skewed to corporations and the rich.
As Congress headed for expected votes, constituents nationwide and advocacy groups kept up their momentum at protests directed at Republicans, several of whom are expected to receive their very own real estate tax breaks as a result of the legislation.
The House will vote on the #GOPTaxScam TODAY! This is the final chance to tell your Rep how this tax scam gives the rich & large corps massive tax cuts & makes tens of millions of working families pay the bill.
Protests were planned at the offices of Sen. Susan Collins (R-Maine), who announced Monday that she planned to support the bill, and on Wall Street, while People's Action urged supporters to continue calling their representatives to voice their opposition:
We have to make calls and tell every member of Congress that our lives are truly on the line. Our survival and that of our children are at risk.
We have to make sure they know that a vote for this tax plan is a vote against the people. There’s still time to stop this bill, but it’s not going to be easy. And that’s exactly why we need all hands on deck.
Contact your Senators and Representatives using the Capitol switchboard by dialing 202-224-3121 NOW.
Several analyses by tax policy groups have shown that the bill would offer short-term, relatively minor benefits to the majority of Americans, while disproportionately benefiting corporations and the wealthiest households with permanent tax cuts.
The Tax Policy Center's latest analysis shows that under the bill, "higher income households receive larger average tax cuts as a percentage of after-tax income" and while average tax bills would go down for all income groups in 2018, millions of lower- and middle-class working families would actually see their taxes go up within a decade.
Americans for Tax Fairness reached similar conclusions in their analysis last month, reporting that 53 percent of the bill's tax cuts go to corporations and the rich, and that those cuts are largely paid for by taking away healthcare from working families.
House Speaker Paul Ryan (R-Wisc.) spoke on a radio show Monday about "entitlement reform"—slashes to Medicare, Medicaid, and Social Security—in order to tackle the national debt, which is expected to soar by $1.5 trillion as a result of the tax bill.
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The Republican tax plan to be voted on this week is likely to pass. “The American people have waited 31 long years to see our broken tax code overhauled,” the leaders of the Koch’s political network insisted in a letter to members of Congress, urging swift approval.
They added that the time had come to put “more money in the pockets of American families.”
Please. The Koch network doesn’t care a fig about the pockets of American families. It cares about the pockets of the Koch network.
It has poured money into almost every state in an effort to convince Americans that the tax cut will be good for them. Yet most Americans don’t believe it.
Polls shows only about a third of Americans favor the tax plan. The vast majority feel it’s heavily skewed to the rich and big businesses – which it is.
In counties that Trump won but Obama carried in 2012, only 17 percent say they expect to pay less in taxes, according to a recent NBC News/Wall Street Journal poll. Another 25 percent say they expected their family would actually pay higher taxes.
Most Americans know that the tax plan is payback for major Republican donors. Gary Cohn, Trump’s lead economic advisor, even conceded in an interview that “the most excited group out there are big CEOs, about our tax plan.”
Republican Rep. Chris Collins admitted “my donors are basically saying, ‘Get it done or don’t ever call me again.’” Senator Lindsey Graham warned that if Republicans failed to pass the tax plan, “the financial contributions will stop.”
By passing it, Republican donors will save billions – paying a lower top tax rate, doubling the amount their heirs can receive tax-free, and treating themselves as “pass-through” businesses able to deduct 20 percent of their income (effectively allowing Trump to cut his tax rate in half, if and when he pays taxes).
They’ll make billions more as their stock portfolios soar because corporate taxes are slashed.
The biggest winners by far will be American oligarchs such as the Koch brothers; Peter Thiel, the Silicon Valley investor; Sheldon Adelson, the Las Vegas casino magnate; Woody Johnson, owner of the New York Jets football team and heir to the Johnson & Johnson fortune; and Carl Icahn, the activist investor.
The oligarchs are the richest of the richest 1 percent. They’ve poured hundreds of millions into the GOP and Trump. Half of all contributions to the first phase of the 2016 election came from just 158 families, along with the companies they own or control.
The giant tax cut has been their core demand from the start. They also want to slash regulations, repeal the Affordable Care Act, and cut everything else government does except for defense – including Medicaid, Medicare, and Social Security.
In return, they have agreed to finance Trump and the GOP, and mount expensive public relations campaigns that magnify their lies.
Trump has fulfilled his end of the bargain. He’s blinded much of his white working-class base to the reality of what’s happening by means of his racist, xenophobic rants and policies.
The American oligarchs couldn’t care less about what all this will cost America.
Within their gated estates and private jets, they’re well insulated from the hatefulness and divisiveness,
They don’t worry about whether Social Security or Medicare will be there for them in their retirement because they’ve put away huge fortunes.
Climate change doesn’t concern them because their estates are fully insured against hurricanes, floods, and wildfires.
They don’t care about public schools because their families don’t attend them. They don’t care about public transportation because they don’t use it. They don’t care about the poor because they don’t see them.
They don’t worry about the rising budget deficit because they borrow directly from global capital markets.
Truth to tell, they don’t even care that much about America because their personal and financial interests are global.
They are living in their own separate society, and they want Congress and the President to represent them, not the rest of us.
The Republican Party is their vehicle. Fox News is their voice. Trump is their champion. The new tax plan is their triumph.
But if polls showing most Americans against the tax cut are any guide, that triumph may be short lived. Americans are catching on.
The recent electoral results in Virginia and Alabama offer further evidence.
A tidal wave of public loathing is growing across the land – toward Trump, the GOP, and the oligarchs they serve; and to the deception, the wealth, and the power that underlies them.
That wave could crash in the midterm elections of 2018. If so, the current triumph of the oligarchs will be the start of their undoing.
Here are the 3 main Republican arguments in favor of the Republican tax plan, followed by the truth.
1. It will make American corporations competitive with foreign corporations, which are taxed at a lower rate.
Rubbish.
(1) American corporations now pay an effective rate (after taking deductions and tax credits) that’s just about the same as most foreign based corporations pay.
(2) Most of these other countries also impose a “Value Added Tax” on top of the corporate tax.
(3) When we cut our corporate rate from 35% to 20%, other nations will cut their corporate rates in order to be competitive with us – so we gain nothing anyway.
(4) Most big American corporations who benefit most from the Republican tax plan aren’t even “American.” Over 35 percent of their shareholders are foreign (which means that by cutting corporate taxes we’re giving a big tax cut to those foreign shareholders). 20 percent of their employees are foreign, while many Americans work for foreign-based corporations.
(5) The “competitiveness” of America depends on American workers, not on “American” corporations. But this tax plan will make it harder to finance public investments in education, health, and infrastructure, on which the future competitiveness of American workers depends.
(6) American corporations already have more money than they know what to do with. Their profits are at record levels. They’re using them to buy back their shares of stock, and raise executive pay. That’s what they’ll do with the additional $1 trillion they’ll receive in this tax cut.
***
2. With the tax cut, big corporations and the rich will invest and create more jobs.
Baloney.
(1) Job creation doesn’t trickle down. After Ronald Reagan and George W. Bush cut taxes on the top, few jobs and little growth resulted. America cut taxes on corporations in 2004 in an attempt to get them to bring their profits home from abroad, and what happened? They didn’t invest. They just bought up more shares of their own stock, and increased executive pay.
(2) Companies expand and create jobs when there’s more demand for their goods and services. That demand comes from customers who have the money to buy what companies sell. Those customers are primarily the middle class and poor, who spend far more of their incomes than the rich. But this tax bill mostly benefits the rich.
(3) At a time when the richest 1 percent already have 40 percent of all the wealth in the country, it’s immoral to give them even more – especially when financed partly by 13 million low-income Americans who will lose their health coverage as a result of this tax plan (according to the Congressional Budget Office), and by subsequent cuts in safety-net programs necessitated by increasing the deficit by $1.5 trillion.
***
3. It will give small businesses an incentive to invest and create more jobs.
Untrue.
(1) At least 85 percent of small businesses earn so little they already pay the lowest corporate tax rate, which this plan doesn’t change.
(2) In fact, because the tax plan bestows much larger rewards on big businesses, they’ll have more ability to use predatory tactics to squeeze small firms and force them out of business.
***
Don’t let your Uncle Bob be fooled: Republicans are voting for this because their wealthy patrons demand it. Their tax plan will weaken our economy for years – reducing demand, widening inequality, and increasing the national debt by at least $1.5 trillion over the next decade.
Shame on the greedy Republican backers who have engineered this. Shame on Trump and the Republicans who have lied to the public about its consequences.
The Vermont senator tells the Guardian why the tax bill – which could become law next week – is the result of 40 years’ scheming by the Kochs and others
Bernie Sanders in Washington on Friday in protest against the tax bill. ‘It is based on the fraudulent theory of trickle-down economics that never worked, never will work.’ Photograph: Alex Edelman/AFP/Getty Images
Bernie Sanders has accused Donald Trump and Republican party leaders of capitulating to the demands of the Koch brothers and other wealthy rightwing donors in railroading $1.5tn tax cuts through Congress.
In an interview with the Guardian, the independent US senator from Vermont denounced the tax bill as payback for the billions of dollars that donors have invested in conservative politicians over decades. “What this is all about is nothing more than the Republican party very generously rewarding their wealthy campaign contributors,” he said.
The former presidential challenger said the reform of the tax code, which could clear both the House and the Senate and be signed into law by the the US president as early as next week, was based on the “rightwing extremist ideology of the Koch brothers. You can read it in what they were saying 40 years ago. What they want is an oligarchic form of society in which government plays virtually no role in public education, healthcare or addressing the needs of middle-class and working families.”
The end game, Sanders said, was that “you are on your own. You are 80 years old and you have cancer – good luck to you. Government is not there for you.”
The legislation, which has now been merged to form a single version from earlier Senate and House bills, marks the most substantial redrawing of taxation in America since Ronald Reagan’s 1986 tax cuts. It would slash the tax burden on corporations from 35% to 21%, and the top level of individual taxes from 39.6% to 37%.
But while the bonus to corporations is permanently set in stone, benefits to working families would expire after a number of years. That would leave millions of middle-class families – 83 million, Sanders said – eventually paying more in taxes under the changes, while the most wealthy Americans would continue to cash in.
“This is nothing more than an effort to make the very rich richer,” Sanders told the Guardian. “It is based on the fraudulent theory of trickle-down economics that never worked, never will work.”
Sanders warned of a double blow to working people in which the vast increase in the deficit caused by the tax cuts would subsequently be used by Republicans to justify an assault on welfare benefits. Paul Ryan, the GOP Speaker of the House, has announcedthat he intends to turn to healthcare and anti-poverty programs next year to reduce spending, and conservatives continue to harbor ambitions of destroying Barack Obama’s signature legislation, the Affordable Care Act, also known as Obamacare.
Paul Ryan looks set to reduce welfare programs to limit spending. Photograph: Jim Lo Scalzo/EPA
Sanders said that “after running up a $1.4tn deficit over 10 years they are going to offset that deficit by making massive cuts to social security, Medicare and Medicaid. That is clearly the intention.”
The senator ran Hillary Clinton to a close second place in the 2016 race for the Democratic presidential nomination. Since then he has become arguably the most prominent critic of America’s growing income and wealth inequality and the plight of the working poor.
His attack on the Republicans’ tax plans came a day after the UN special rapporteur on extreme poverty and human rights, Philip Alston, issued a withering report that denounced growing in equality in the US. Alston’s initial findings, released on Friday, criticized the tax bill currently going through Congress for hugely increasing already large disparities between rich and poor.
Sanders’ claim that the tax cuts are a thinly disguised reward to billionaire extreme rightwing donors is supported by the statements of some Republican politicians themselves. Chris Collins, a New York congressman, told reporters that pressure from donors made the reform essential.
“My donors are basically saying, ‘Get it done or don’t ever call me again,’” he said.
Last month the leader of the powerful conservative Super Pac the Congressional Leadership Fund, made it clear to the Washington Post that lawmakers who stood in the way of the tax cuts in the House should not expect to receive any of the $100m the body expected to spend on candidates in next year’s midterm elections.
David and Charles Koch have leveraged their own vast wealth – they own Koch Industries, the second largest private company in the US, and are valued by Forbes at $49bn each – by creating a network of other similarly minded wealthy conservatives that runs parallel to the Republican party. In the 2016 election cycle it spent about $250m on candidates who followed their anti-government creed, and the plan for next year is to increase that investment to $400m.
The Koch network has thrown its muscle behind the tax cuts this year. One of its periodic retreats for super-rich donors in New York in October was devoted to the subject of tax reform and attended by the vice-president, Mike Pence.
The brothers first entered the political arena in the 1970s when they began agitating for a bonfire of restrictions on spending by rich individuals and companies on political campaigns. They have consistently fought against government regulations and social programs helping low-income families, in ways that have been advantageous to their business interests that include oil and other energy concerns.
“Anyone who has looked at the Koch brothers and folks like them who have contributed over the years probably billions of dollars in right-wing efforts should not be surprised at the policies coming from Paul Ryan and Donald Trump,” Sanders said.
The senator lamented the unprecedented speed with which the tax plans have been rushed through Congress, and the consequent lack of public debate. As a result, he said, many details of the legislation were still so sketchy they were impossible to understand.
One area that Sanders is especially wary of in the unfolding bill are provisions that would benefit hedge fund managers based on tax havens such as the Virgin Islands. “We believe the provision will apply to probably fewer than 10, maybe even as few as three, hedge fund managers that will result in some $600m in tax breaks over 10 years.”
He added that he had raised the issue on the floor of the US Senate, asking for an explanation from the Republican group, “but we have not been given one”.
Sanders said the tax cuts were particularly punishing for those working Americans who had voted for Trump last November partly on the expectation that his promised tax cuts would ease their financial burdens.
“The tax package is just another Trump lie. Many millions of middle-class Americans will pay more in taxes and if Republicans get their way – and we are going to fight them tooth and nail on this – there will be cuts to social programs that many of Trump’s supporters have depended on for years.”
President Donald Trump speaks to members of the White House Press Corps prior to his Marine One departure from the South Lawn of the White House December 15, 2017 in Washington, D.C. (Photo: Alex Wong/Getty Images)
Asked about the GOP tax bill, which is expected to hit the floor of the House and Senate for a final vote early next week, Trump said: "I think we're doing very well, it's something that's going to be monumental. It will be the biggest tax increase—or tax cut—in the history of our country."
Even if it was just a slip of the tongue, Trump's characterization of the GOP tax bill as the "biggest tax increase" in American history is accurate, according to some analysts.
As The Intercept's Ryan Grim noted in an analysis earlier this month, the GOP tax bill is "routinely referred to as a $1.5 trillion tax cut. And, in some ways, that's true: On net, it would reduce the amount of taxes collected by the Treasury by about $1.5 trillion over 10 years."
However, "that figure masks the eye-popping scale and audacity of the GOP's rushed restructuring of the economy," Grim adds. "[The bill,] properly described, is two things: the largest tax cut—and also the biggest tax increase—in American history."
This tax increase, as research by the Center on Budget and Policy Priorities (CBPP) has found, would primarily be shouldered by low-income and middle class Americans. Additionally, while the GOP bill would give corporations permanent tax cuts, many of the cuts for middle class and low-income Americans would expire after a decade.
As Common Dreamsreported on Wednesday, House and Senate Republicans reached a backroom "deal" that tilts the benefits of their bill even further toward the wealthiest Americans by reducing the top marginal tax rate from from 39.6 percent to 37 percent.
"Overall, in 2027—when only the corporate tax cuts, slower inflation measure, and individual mandate repeal would remain in place—the Senate bill would, on average, raise taxes or reduce federal expenditures for households with incomes below $75,000 by about $60 billion—while still giving large tax reductions (through its corporate tax cuts) to those at the top," noted CBPP's Chuck Marr.
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Trump and congressional Republicans are engineering the largest corporate tax cut in history in order “to restore our competitive edge,” as Trump says.
Our competitive edge? Who’s us?
Most American corporations – especially big ones that would get most of the planned corporate tax cuts – have no particular allegiance to America. Their only allegiance is to their shareholders.
So restoring their “competitive edge” has little or nothing to do with helping American workers.
For years they’ve been cutting the jobs and wages of American workers in order to generate larger profits and higher share prices.
Some of these jobs have gone abroad or been outsourced to lower-paid contractors in America. Others have been automated. Most of the remaining jobs pay no more than they did four decades ago, adjusted for inflation.
When GM went public again in 2010 after being bailed out by American taxpayers, it boasted of making 43 percent of its cars in places where labor is less than $15 an hour – often outside the United States. And it got its American unions to agree that new hires would be paid half the wages and benefits of its old workers.
Capital is global. Big American corporations are “American” only because they’re headquartered and legally incorporated in the United States. But they could (and sometimes do) leave at a moment’s notice. They employ or contract with workers all over the world.
And they’re owned by shareholders all over the world.
According to research by the Tax Policy Center’s Steven Rosenthal, about 35 percent of stock in U.S. corporations is now held by foreign investors.
So when taxes of “American” corporations are cut – as the Trump-Republican tax bill seeks to do – foreign investors get a windfall.
That’s money that foreign investors would otherwise be paying into the U.S. Treasury.
By way of comparison, the combined tax cuts for families in the bottom 80 percent of the income distribution in the 30 states won by President Donald Trump comes to just $39.4 billion. That’s far less than the House bill gives away to foreign investors.
I’m not blaming American corporations. They’re in business to make profits and maximize their share prices, not to serve America.
I’m blaming politicians like Trump and the Republicans who are trying to persuade Americans that tax cuts on American corporations will be good for Americans.
It’s different for many corporations headquartered in Europe or Canada. Big corporations headquartered there are far more responsible for the well-being of the people living in those nations. That’s mainly because labor unions there are typically stronger there than they are here – able to exert pressure both at the company level and nationally.
As a result, American corporations distribute a smaller share of their earnings to their workers than do European or Canadian-based corporations. And top American executives make far more money than their counterparts in other wealthy countries.
Governments in other rich nations often devise laws through bargains involving big corporations and organized labor. This process further binds their corporations to their nations.
But in America, lawmakers respond almost exclusively to the demands of big corporations and of wealthy individuals (typically corporate executives and Wall Street moguls) with the most lobbying prowess and deepest pockets to bankroll campaigns. Meanwhile, unions are weak here, and “the preferences of the average American appear to have only a miniscule, near-zero, statistically non-significant impact upon public policy,” according to researchers.
Which is one reason why most Europeans and Canadians receive essentially free health care, generous unemployment benefits, paid medical leave, and an average of five weeks paid vacation.
So it shouldn’t be surprising that even though U.S. economy is doing well by most measures, and American-based corporations are overflowing with profits, the benefits are not trickling down to most Americans.
Given the dominance of American corporations on American politics, combined with their singular concern for share prices rather than the well-being of Americans, it’s folly to think they’ll turn tax cuts into good American jobs.
The tax bills big corporations are pushing through Congress are designed for one thing: to boost their share prices, not to boost the vast majority of Americans.
Amazon is looking to build a second headquarters somewhere in the US, and cities are falling all over themselves to offer Jeff Bezos the moon. CEO Bezos of Amazon is now worth $100 billion, the first man or woman to achieve that distinction, but cities are worshiping at his feet to offer up their first born sons to get him to locate his new headquarters in their cities. The Seattle Times reports it's not so much a takeover of these cities intent on wooing him. It's more like a surrender ... a surrender to the Lord and King in return for a mess of pottage. Last month Amazon announced it got 238 offers for its new, proposed 50,000-employee HQ2.
30 of these offers have been released so far under public-record acts so we can see what sordid depths cities will go to to get multi-billionaire Bezos, who obviously doesn't need the money, to locate the new Amazon headquarters in their city. All hail the Lord and Master. There’s a new wave, in which some City Halls seem willing to go beyond just throwing money at Amazon. They’re turning over the keys to the democracy. Here, Jeff. Here's the Key to the City. You run it and do whatever you want with the tax money. You run the government.
Chicago has offered to let Amazon pocket $1.32 billion in income taxes paid by its own workers. This is truly perverse. Called a personal income-tax diversion, the workers must still pay the full taxes, but instead of the state getting the money to use for schools, roads or whatever, Amazon would get to keep it all instead. As if Amazon and Bezos needed the money. He could probably afford to buy Chicago outright.
“The result is that workers are, in effect, paying taxes to their boss,” says a report on the practice from Good Jobs First, a think tank critical of many corporate subsidies.
Most of the HQ2 bids had more traditional sweeteners. Such as Chula Vista, California, which offered to give Amazon 85 acres of land for free (value: $100 million) and to excuse any property taxes on HQ2 for 30 years ($300 million). New Jersey remains the dollar king of the subsidy sweepstakes, having offered Amazon $7 billion to build in Newark. Stonecrest, GA has even offered to rename itself "Amazon."
But the City of Fresno, CA takes the cake. That city of half a million isn’t offering any tax breaks. Instead it has a novel plan to give Amazon special authority over how the company’s taxes are spent. Fresno promises to funnel 85 percent of all taxes and fees generated by Amazon into a special fund. That money would be overseen by a board, half made up of Amazon officers, half from the city. They’re supposed to spend the money on housing, roads and parks in and around Amazon. The proposal shows a park with a sign: “This park brought to you by Amazon,” with the company’s smiling arrow corporate logo.
As Fresno takes groveling to a new low level, we wonder why there is an economic divide, why the rich get richer and the poor get the shaft? Well, democracy is for sale to the highest bidder, to the city that will grovel the most before their future Lord and Master ... Jeff Bezos ... who, by the way owns the Washington Post. Now the Koch brothers are taking over Time magazine. We won't have to worry about getting unbiased news any more. We'll just get news that's favorable to the ruling class.
Demonstrators descended on Capitol Hill on Tuesday, demanding that Republican lawmakers who voted for the Tax Cuts and Jobs Act hear their concerns about the legislation. (Photo: @riseandresistny/Twitter)
Opponents of the Republican tax plan moving through Congress showed they were not backing down on Tuesday as hundreds of protesters chanted "Kill the bill!" and "Tax the rich, not the sick!" as they assembled outside the offices of GOP lawmakers.
While numerous arrests were made in the crowded hallways, the demonstrators made it clear that the fight to defeat the bill is not over yet.
Hundreds of demonstrators protested the House GOP tax bill. They targeted @RepRyanCostello (R-Pa) congressional office. Many got arrested as they took over a hallway in the Cannon building shouting #KillTheBillpic.twitter.com/8xo4fmaJeT
Demonstrators targeted Reps. Ryan Costello (R-Penn.), Barbara Comstock (R-Va.), and other Republicans who voted for the tax plan, visiting their offices and telling staffers how they would be impacted by the law. Both Costello and Comstock are up for re-election in 2018.
Capitol Police began arresting protesters at about 2:30pm outside Costello's office, with chants of "Kill the bill, Costello!" continuing as people were led away in handcuffs.
The Senate passed its bill in the middle of the night on Saturday, after finalizing the proposal just five hours earlier. Democrats protested that no hearings had been held about the potential impact of the bill, which a number of bipartisan groups found would raise taxes on middle-class families by 2027. A Quinnipiac University poll released on Tuesday found that 53 percent of Americans disapprove of the legislation, while just 29 percent support it.
The Senate and House must still reconcile their two versions of the bill in a conference committee which was formed on Monday. Nine Republicans and five Democrats from the House have been named to the panel, with the Senate expected to send members later this week. The committee will debate the two bills with the goal of sending one piece of legislation to President Donald Trump's desk by Christmas.
With continued pressure in the coming days and weeks, said opponents of the #GOPTaxscam on social media, there is still a chance of keeping the bill from becoming law:
Republicans say the tax bill they've just passed will create economic growth. By giving corporations and the wealthy huge tax reductions, this will stimulate the economy. GDP will surge. However, all economic growth in the last few years has redounded to the benefit of ... you guessed it ... the corporations and the wealthy. 95% Of Income Gains Since 2009 Went To The Top 1%. So why should the middle class and the poor buy this Republican drivel that giving tax breaks to the rich is going to be good for them. They shouldn't.
The Republican tax plan phases out tax breaks for the middle class while keeping in place tax breaks for the rich. Plus it gets rid of social programs that benefit the poor and middle class. But I guess this is what the Trump supporters really want - tax "reform" that screws them. As long as it screws the poor, people of color and immigrants more. Besides corporate CEOs have flat out said that they would not use the tax breaks to create jobs for the middle class. Noooo, they will use them to buy back their own stock, thereby giving themselves a raise.
Business Insider said: "But what's the point of GDP growth if it doesn't translate into broadly shared gains in income and living standards?" That's exactly the point, isn't it? What good is economic growth if it doesn't produce more jobs? And if it doesn't produce more jobs, it won't benefit the middle class or the poor. It will only benefit the rich. So they get a two-fer: tax breaks plus higher income.
The Guardian said: "The economic case for maintaining a progressive income tax structure and targeting welfare payments to those most in need is overwhelming." That's because the poor and middle class will buy more stuff if they have the wherewithal to do so. But the rich don't really care whether the middle class and poor buy more of the kinds of stuff that they usually buy. The rich deal in asset classes and growth in the financial sector of the economy. They don't care if the middle class upgrades from hamburger to steak. It's not the kind of business most of them are in.
The rich only care about economic growth in the financialized debt based economy, that is socking it to the middle class and making them pay more interest on their student, credit card and mortgage loans. They care about economic growth in the asset classes like the stock market and real estate. Economic growth in the retail sector is so passe.
So all you Trump Republicans who just want a win for tax reform are only winning it in such a way that you will never see any of the gains. Losers!
It’s often thought that Democrats care about fairness and not economic growth, while Republicans care about growth even at the cost of some fairness.
Rubbish. Growth and fairness aren’t opposites. In reality, Democrats are the party of economic growth and fairness. Republicans are the party of neither.
The only way to grow the economy is by investing in the education, healthcare, and infrastructure that average Americans need in order to be more productive. Growth doesn’t “trickle down.” It rises up.
Consider the two biggest legislative initiatives over past decade – the Affordable Care Act, achieved without a single Republican vote, and the current Trump-Republican tax overhaul, speeding ahead without a single Democrat.
The ACA extends coverage to 21 million mostly lower-income Americans, including millions of children.
It’s largely paid for by two tax increases on the rich – a 3.8 percent increase on their capital gains taxes and other investment-related income, and a 0.9 percent surcharge on their Medicare taxes. Those tax increases are a major reason why Republicans have wanted to repeal it.
But the ACA isn’t just about fairness. Healthier Americans are also more productive workers. Children who receive health care are better learners. The Act thereby fuels economic growth and widens prosperity.
Republicans say their tax overhaul will promote growth by increasing the profits of American corporations and investors. This is trickle-down nonsense.
Every major study (including Congress’s own Congressional Budget Office and Joint Committee on Taxation) finds that its benefits would go mainly to big corporations and the wealthy.
Share prices may rise for a time. They’re already at record highs in anticipation of the tax cut. But higher share prices don’t trickle down, either. The richest 1 percent owns almost 38 percent of the stock market. Eighty percent of Americans together own just 8 percent of all shares of stock.
U.S. Treasury Secretary Steven Mnuchin speaks to members of the White House press corps during a daily briefing at the James Brady Press Briefing Room of the White House August 25, 2017 in Washington, D.C. (Photo: Alex Wong/Getty Images)
The Trump White House has pulled out all the stops in its efforts to help the GOP ram through its widely disliked tax bill, including—as the New York Timesreported Thursday—citing a Treasury Department analysis one government whistleblower says doesn't even exist.
"I have covered tax policy for more than three decades. This is a shocking abdication of responsibility by the Treasury Dept." —Glenn Kessler, Washington Post
For months, Treasury secretary Steve Mnuchin has peddled the ambitious claim that not only would the GOP's proposed tax cuts for the rich "pay for themselves" through a massive surge in economic growth, but also that the cuts would help the U.S. "pay down debt."
"In our models, we believe there will be $2.5 trillion of growth," Mnuchin said during a recent CNN interview. "And we're happy to go through the numbers. We're happy to give the details. We want full transparency to the American public."
Despite such lofty promises and his expressed commitment to "transparency," however, Mnuchin has yet to release the promised analysis, even as the Senate is expected to vote on the GOP tax plan as early as Thursday night. According to an economist at the Office of Tax Analysis, he hasn't done so for good reason: there is no such study.
As the Times reports:
Mr. Mnuchin has promised that Treasury will release its analysis in full. Yet, just one day before the full Senate prepares to vote on a sweeping tax rewrite, the administration has yet to produce the type of economic analysis that it is citing as a reason to pass the tax cut.
Those inside Treasury’s Office of Tax Policy, which Mr. Mnuchin has credited with running the models, say they have been largely shut out of the process and are not working on the type of detailed analysis that he has mentioned.
An economist at the Office of Tax Analysis, who spoke on the condition of anonymity so as not to jeopardize his job, said Treasury had not released a "dynamic" analysis showing that the tax plan would be paid for with economic growth because one did not exist.
Tax analysts expressed shock and dismay at the fact that, on the eve of the vote on a plan that could have devastating consequences for millions of families, the Treasury Department still hasn't released anything resembling a comprehensive exploration of the it's long-term implications.
Mnuchin's misleading promises fit with a pattern of deception that has characterized the Republican tax cut push, which has been denounced by Sen. Bernie Sanders (I-Vt.) and others as "pathetic" and "immoral."
As Common Dreamsreported earlier this month, Senate Majority Leader Mitch McConnell (R-Ky.) was forced to admit that he "misspoke" when he promised that no middle class families would see their taxes rise under his plan.
Likewise, President Donald Trump has continued peddling easily debunked falsehoods about the plan's projected impact on workers and the rich. Despite his insistence that the wealthy are not happy with the bill and that workers will love it, countless breakdowns of the plan's details have demonstrated that it will overwhelmingly favor the wealthiest Americans—including Trump and his family—at the expense of the working class.
Recent nonpartisan analyses have consistently found that the Republican tax plan, expected to hit the Senate floor for a vote as early as Thursday, would deliver even more wealth to the richest Americans. (Photo: vishpool/Flickr/cc)
If any more evidence were needed to show that the wealthiest Americans really don't need a tax cut, here it is: Between 2007 and 2016, the average wealth of those in the top one percent grew by a whopping $4.9 million.
What about everyone else? In that same period, the average wealth of the bottom 99 percent declined by $4,500.
This is according to an analysis put out Wednesday by Matt Bruenig of the People's Policy Project, based on data from the Federal Reserve's Survey of Consumer Finances
Recent nonpartisan analyses have consistently found that the Republican tax plan, expected to hit the Senate floor for a vote as early as Thursday, would deliver even more wealth to the richest Americans. And contrary to GOP rhetoric, the plan would also hike taxes on millions of low-income and middle class families.
As tax analyst Hunter Blair of the Economic Policy Institute noted on Wednesday, the top one percent of households would on average see a $32,500 tax cut per year under the GOP plan. The bottom 20 percent of earners, by contrast, would pay $10 more annually.
Further undermining Republicans' "trickle down" selling points, numerous business leaders have already conceded that they are not planning to invest any of the extra cash they are set to receive into raising wages for workers, but will instead shower the windfall to their investors and stockholders.
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Published on Tuesday, November 28, 2017 by Common Dreams
"The bottom line is that the American people have a right to know exactly how you plan to pay for a $1.4 trillion increase in the deficit before, not after, tax legislation is signed into law," Sanders wrote in a letter to GOP leaders
House Speaker Paul Ryan (R-Wis.) and Senate Majority Leader Mitch McConnell (R-Ky.) are pushing to strip healthcare from millions of Americans while they accept generous healthcare subsidies from the government. (Photo: Getty)
As the deficit-exploding GOP tax plan hurtles toward a final vote in the Senate this week, Sen. Bernie Sanders (I-Vt.) delivered a letter to Senate Majority Leader Mitch McConnell (R-Ky.) and House Speaker Paul Ryan (R-Wis.) on Monday demanding to know how much they are planning to cut from Medicare, Medicaid, Social Security, and other key programs in order to offset the costs of tax cuts for the ultra-wealthy.
"Will you attempt to end Medicare as we know it by giving seniors vouchers to purchase private health insurance, something long supported by Speaker Ryan? How much will you cut Social Security? Will you try to increase the retirement age to 70?" —Sen. Bernie Sanders"I am very concerned that if you succeed in passing tax legislation that significantly adds to our national debt, you will then move aggressively to balance the budget on the backs of working families, the elderly, the children, the sick, and the poor," Sanders wrote. "In other words, in order to pay for tax breaks for the rich and large corporations, you will make massive cuts to Social Security, Medicare, Medicaid, nutrition, environmental protection, and every other program designed to protect the needs of the middle class and working families of our country."
Highlighting nonpartisan analyses predicting that the Republican tax plan would increase the federal deficit by $1.4 trillion over the next decade, Sanders implored McConnell and Ryan to provide the American public with a "specific and detailed explanation as to how the Republican Congress will achieve its commitment of balancing the budget."
"Will you attempt to end Medicare as we know it by giving seniors vouchers to purchase private health insurance, something long supported by Speaker Ryan?" Sanders asked. "How much will you cut Social Security? Will you try to increase the retirement age to 70?"
Sanders' questions come as the Senate Budget Committee is expected to vote on the GOP's deeply unpopular tax bill on Tuesday, setting the stage for a final vote as early as Thursday.
TABLE 1 is a short rather shocking summary of the federal tax benefit (or non-benefit) shares among different income groups under Trump’s tax plan in 2019 and 2027. Tax decreases and (increases) are based on the Joint Committee on Taxation’s (JCT) analysis of latest Senate adjustments to Trump’s tax plan which the president and the Paul Ryans deceptively claim largely benefits middle/lower working classes. Nothing could be further from the truth in the JCT’s view. Like the Congressional Budget Office’s (CBO) non-partisan status, the JCT is also a non-partisan judge on tax legislation.
My much condensed summary below of JCT’s overall tax figures’ analysis for 2019 and 2027 shows that the tax cut benefits go predominately by far to the wealthiest taxpayers, particularly the Top 10%. By 2027, Trump’s tax plan IN FACT calls for high tax increases for middle-lower class people with incomes below $100,000 while still reducing taxes for incomes above $200,000.
TABLE 1: (Millions $)
2019 Tax Decrease(Increase)
2027 Tax Decrease(Increase)
Amount
% of Tax Benefits
Amount
% of Tax Benefits
$1 to $50,000
$14,258
5.9%
($23,281)
(87.8%)
$50,000 to $100,000
$43,902
18.3%
($3,234)
(12.2%)
Sub-Total
$58,160
24.2%
($26,515)
(100.0%)
$100,000 to $200,000
$64,130
26.7%
$3,918
24.6%
$200,000 to $500,000
$59,377
24.8%
$4,589
28.9%
$500,000 to $1 Million
$24,753
10.3%
$1,817
11.4%
Above $1 Million
$33,670
14.0%
$5,580
35.1%
Sub-Total
$181,930
75.8%
$15,904
100.0%
Total All Taxpayers
$240,090
100.0%
($10,611)
100.0%
Source: Joint Committee on Taxation
The “Big Picture” message is clear: for incomes below $100,000 in 2019 and 2027, middle/lower income earners’ tiny 24% share of high total tax cut benefits of $240.1 billion in 2019 will be phased out to substantial tax increases on incomes leading to zero tax benefits in 2027. In sharp contrast, for incomes above$100,000, higher income earners receive a stupendous 76% share of high total tax benefits of $240.1billion in 2019, rising to a 100% share of lower total tax benefits of $15.9 billion in 2027. For incomes above $200,000 in 2019, income earners receive a 49% share of high total tax benefits of $240.1 billion, rising to a 75.4% share of lower total tax benefits of $15.9billion in 2027. However, middle/lower income earners will be paying more taxes by end of first decade and the rich will be still paying less. By 2027, taxpayers that would be paying higher taxes would have grown substantially, mainly because Trump’s tax legislation insures that individual tax cuts expire in 2026.
One of the most dangerous consequences of this awful period in American life is the denigration of the truth, and of institutions and people who tell it.
There are two kinds of liars – fools and knaves. Fools lie because they don’t know the truth. Knaves lie because they intend to mislead.
Trump is both, because he doesn’t even care enough about the truth to find out what it is. He’ll say whatever he thinks will get people to believe what he wants them to believe.
What about people like Treasury Secretary Steve Mnuchin, Trump’s point person on the Republican tax bills now making their way through Congress?
Mnuchin continues to insist that the legislation puts a higher tax burden on people earning more than $1 million a year, and reduce taxes on everyone else. “I can tell you that virtually everybody in the middle class will get a tax cut, and will get a significant tax cut,” Mnuchin says repeatedly.
But the prestigious Tax Policy Center concludes that by 2025, almost all of the benefits of both bills will have gone to the richest 1 percent, while upper-middle-class payers will pay higher taxes and those at the lower levels will receive only modest benefits.
So is Mnuchin a fool? His career before he became Treasury Secretary doesn’t suggest so. He graduated from Yale, and worked for seventeen years for investment bank Goldman Sachs.
Perhaps Mnuchin doesn’t find the Tax Policy Center credible. Maybe he agrees with Trump economic adviser Peter Navarro, who describes it as “a left-leaning center that produces analyses that favor Democratic tax-and-spend programs and disfavor Republican programs.”
In the age of Trump, even prestigious organizations once considered non-partisan are either “with us” or “against us.”
Problem is, virtually all other studies by every other source show the House and Senate tax bills overwhelmingly benefit the rich and, within a few years, harm the middle class.
The National Day of Action is planned for Monday as the Trump resistance fights the Republican tax plan, which is expected to raise taxes on middle-income Americans while cutting them for corporations and the richest families. (Photo: @Indivisible12th/Twitter)
The grassroots resistance group Indivisible was gearing up on Friday for a planned National Day of Action, targeting Republican senators who are thought to be potential "no" votes on the GOP's tax plan—in a final push to keep the bill from passing. The Senate is expected to vote on the plan as soon as Thursday.
The group was preparing for #TrumpTaxScam Sit-Ins taking place across the country on Monday, at the offices of several senators including Arizona's John McCain and Jeff Flake, Sens. Lisa Murkowski (R-Alaska), and Susan Collins (R-Maine)—focusing attention on some of the lawmakers who were targeted last summer during the fight against the Republican healthcare plan.
"Republicans have made it crystal clear: the Trump Tax Scam fight and the TrumpCare fight are one and the same," the group wrote on its website, noting the Senate Finance Committee's plan to repeal the Affordable Care Act's individual mandate, which was revealed earlier this month. The move would leave 13 million Americans uninsured according to the Congressional Budget Office—in the interest of reducing the federal deficit that would be caused by the Republican plan to lower taxes for corporations and the wealthiest Americans.
Members of the Trump resistance are expected to assemble at the offices of so-called "moderate" Republicans to demand that the elected officials listen to their concerns about the tax bill, which groups including Americans for Tax Fairness and the Tax Policy Center say would eventually raise taxes for middle-income Americans, after giving them temporary, meager tax cuts.
"A sit-in expresses that your group is willing to sit there until your senator or his or her staff address your concerns—that you are demanding to be heard," read Indivisible's breakdown of the action plan. "That is what makes these actions powerful."
Americans for Tax Fairness released a study on Tuesday showing that 82 million middle-class households would pay more in taxes in 2027, should the GOP plan become law. The Tax Policy Center's analysis came to the same conclusion this week, while finding that the plan would only produce $169 billion in additional revenue over the next decade, while adding a $1.5 trillion deficit.
As of Friday, at least 50 events were planned as part of Indivisible's National Day of Action.
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I'm tired of hearing politicians pander to the citizenry by calling them "hardworking Americans." "Hardworking Americans should keep more of their money." And "They worked hard for their money." No they didn't. The richer they are, the less they worked hard for their money. They sat in an office somewhere and raked in billions. Did billionaires work hard for their money? If so, maybe they should have worked less hard and enjoyed life more. No one needs a billion dollars.
Most rich people simply sit back and collect rent or watch the stock market go up. Is that working hard? They call it passive or unearned income. That distinguishes it from income actually earned in the labor force from an actual job. That's how rich people don't work hard in a capitalist economy. They make money off of money. That's the whole purpose of capitalism: get rich by not working hard. So do these rich people deserve a tax break because they worked so hard? I don't think so.
Many people are one paycheck away from homelessness. They shouldn't be paying any taxes. The rich can afford to pay taxes on all that money they made from not working hard. Yet Republicans want to give these people (those who make their money off of capital gains and corporate profits) a tax break. They are only doing it because their rich donors, who are so greedy no amount of money suffices, demand it. If the rich don't get their tax break, they will stop donating to the Republican party.
After several tax breaks for the rich did not trickle down to the rest of us, they shouldn't have been able to sell this nonsense to the American people again. But they're still at it. They just don't care, really. Tax breaks for hardworking Americans is just propaganda, but a lot of people believe it even though it's never worked in the past.
So the Republicans are going to take money away from hardworking Americans so they can give it to the not hardworking Americans. Furthermore, they're going to cut the money going into health care for the poor. But that's not all, folks. They're going to run the country into another trillion and a half dollars of debt. Is this any way to run a country? I don't think so.
The non-partisan Institute for Taxation and Economic Policy (ITEP) found that while U.S. households would receive $8 billion in net benefits from the plan in ten-years time, wealthy overseas investors would capture an astonishing $22 billion. (Image: Indian Express)
If the Senate Republicans' latest version of their tax overhaul bill passes, foreign investors will receive a financial benefit nearly three times larger than all U.S. taxpayers combined, according to a new analysis released Saturday.
In its updated analysis, the non-partisan Institute for Taxation and Economic Policy (ITEP) found that while U.S. households would receive $8 billion in net benefits from the plan, wealthy overseas investors would capture an astonishing $22 billion.
"By 2027," the anlysis states, "foreign investors would benefit more than American households overall under the bill as written. While some households would pay more and others would pay less, in 2027 the average net effect for U.S. households would be a tax cut of $8 billion, which is much smaller than the $22 billion benefit to foreign investors."
As Seth Hanlon, a senior fellow at the Center for American Progress, explained, "The reason that foreign investors are the biggest winners is that they own about 1/3 of the shares of U.S. corporations." And because the plan drops the corporate tax rate from 35% down to just 20%, he added: "Corporations are getting a huge tax cut, paid for by tax increases on Americans, and by fewer Americans [with] health insurance."
At the same time, the new ITEP analysis shows that low- and middle-income taxpayers will see tax increases while high-income earners receive massive tax cuts:
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Demonstrators hold signs during a rally against the GOP tax plan in Washington, DC, on Nov. 15, 2017. (Photo: Zach Gibson/Bloomberg via Getty Images)
OK, you know the scenario by now. Congressional Republicans propose — surprise! — tax cuts. The vast bulk of these cuts go to the very wealthiest Americans and to corporations, which are headed by these wealthy Americans and which give them dividends that are taxed at lower rates. Meanwhile, ordinary working Americans, and by “working” I include professionals who earn a wage or salary, get modest cuts or no cuts at all.
The Republicans hail their cuts as a way to stimulate the economy, because in their infinite charitableness, rich people will now hire poorer ones with all the dough they save. In fact, they say, this is the only way to stimulate the economy. But even if the economy is roaring, the cuts are necessary to continue stoking it. Tax cuts, then, are the policy for all seasons — in truth, the panacea for all seasons.
And then Republicans pass the tax cuts, and a good many Americans — even those blue-collar Joes — cheer, because after all, they may get a few pennies on the dollar.
There is a name for this: “playing us for suckers.” And Americans seem to fall for it every single time. Who doesn’t want tax cuts? They are the opiate of politics.
But a funny thing happened on the way to the new GOP cuts, billed fallaciously as “tax reform.” This time, the public hasn’t seemed to swallow the bait — at least not hook, line and sinker. Polls are all over the place, from those showing outright opposition to those showing decreasing support the more the public learns about the bill.
No, this isn’t exactly a political earthquake, but it isn’t nothing. Having been played for suckers for decades, Americans may be wising up. That doesn’t mean, of course, that the tax-cut package won’t pass. The Republicans and their fearless leader, Donald Trump, are desperate — really, really desperate. They need a victory, whether the American people oppose the policy or not. Any sort of victory will do.
This isn’t exactly a political earthquake, but it isn’t nothing. Having been played for suckers for decades, Americans may be wising up.
Besides, Republican benefactors — those wealthy Americans who are always trying to redistribute wealth from us to them and whose greed can never be sated — are demanding the cuts. Otherwise, they say, they won’t fund the GOP. So the incentives are huge, and they are entirely political.
However shameless, in the past, this tax cut adage that you can fool all of the people all of the time has worked for several reasons. First, taxes are just so damn complicated. They have so many moving parts, so many contingencies, that it’s difficult to develop a powerful counter-narrative to the GOP narrative that if your taxes go down, jobs will bloom — a proven fallacy, by the way. In fact, at a Wall Street Journal conference of CEOs this week with Trump’s top economic adviser Gary Cohn, only a few hands went up when attendees were asked if they intended to invest their new windfall. So much for trickle down.
Second, because tax policy is complicated, the media seem helpless to explain it. When the media did their yeoman work on the Obamacare repeal earlier this year, helping to rally the public against it, they had a single, simple Congressional Budget Office number to dramatically demonstrate its effects. And they were not loath to show us the casualties — parents with a disabled child, sons and daughters with ill parents, cancer patients, people suffering from chronic conditions. By the time the Senate held its first repeal vote, only 17 percent of Americans supported the effort.
The challenge of tax reform is much greater, and the media haven’t risen to it. There is no single data point that captures its effects. There is no group of individual casualties that illustrate what would happen if they pass. But rather than provide explanations, the media have left the field to the Republicans. Just the words “tax cuts” are pretty potent stuff. It would take a lot for the media to survey the consequences and push back, and they don’t seem to be up to it. Nor does it help that Republicans are trying to rush it through before people can see the details.
In total, the House GOP tax plan would raise taxes by 400 percent on many graduate students, the Harvard Crimson estimated. (Photo: Andrew Harrer/Bloomberg)
"Soaking broke-ass grad students to pay for a private jet subsidy. All-out class war on the 99 percent."
"An educated population is dangerous to an oligarchy. The GOP claims to be for jobs and economic prosperity for all, but this action shows otherwise." —Jess Phoenix, California congressional candidateThat was how one commentator described a pair of provisions buried in the GOP tax plan that passed the House on Thursday and is likely headed to the Senate floor for a vote as early as next week.
One provision—crammed in the middle of the latest version of the so-called "Tax Cuts and Jobs Act"—would provide a windfall to the wealthy few who own or lease private planes by exempting them from certain taxes related to "maintenance and support," "the hiring and training of pilots and crew," and "administrative services such as scheduling, flight planning, weather forecasting, obtaining insurance, and establishing and complying with safety standards."
Graduate students, however, would not fare so well if the GOP plan becomes law.
As CNBCreports, "[s]ome programs provide graduate students with a modest stipend for food and housing. For instance, Ryan Hill, a fourth-year Ph.D. student at MIT, receives a $30,000 living stipend and a tuition waiver allowing him to forego paying $50,000 in tuition. He currently pays taxes on his $30,000 stipend, but under the proposed House tax bill, his tuition waiver would also be taxed—meaning he would be taxed as if he was earning $80,000 a year."
In total, the House GOP tax plan would raise taxes by 400 percent on many graduate students, the Harvard Crimsonestimated.
Such a tax on students who are already drowning in loan debt "would be devastating," Samantha Hernandez, legislative director of the National Association of Graduate-Professional Students, toldWired. "I monitor all legislation at the state and federal levels that could affect graduate and professional students, and this is just—this would have the greatest negative impact of anything I've seen."
Historian Nick Kapur pointed to his own experience as a PhD student and described the proposed tax hike as "the height of Republican insanity."
And it gives America’s wealthiest citizens trillions more, when the richest 1 percent now hold a record 38.6 percent of the nation’s total wealth, up from 33.7 percent a decade ago.
The reason Republicans give for enacting the plan is “supply-side” trickle-down nonsense. The real reason is payback to the GOP’s mega-donors.
A few Republicans are starting to admit this. Last week, Gary Cohn, Trump’s lead economic advisor, conceded in an interview that “the most excited group out there are big CEOs, about our tax plan.”
Republican Rep. Chris Collins admitted that “my donors are basically saying, ‘Get it done or don’t ever call me again.’”
Republican Sen. Lindsey Graham warned that if Republicans failed to pass tax reform, “the financial contributions will stop.”
Republican mega-donors view the tax payback as they do any other investment. When they bankrolled Trump and the GOP, they expected a good return.
The biggest likely beneficiaries are busily investing an additional $43 million to pressure specific members of Congress to pass it, according toThe Wall Street Journal.
They include the 45Committee, founded by billionaire casino oligarch Sheldon Adelson and Todd Ricketts, whose family owns the Chicago Cubs; and the Koch Brothers’ groups, Americans for Prosperity and Freedom Partners.
They’re not doing this out of love of America. They’re doing it out of love of money.
How do you think they got so wealthy in the first place?
As more of the nation’s wealth has shifted to the top over the past three decades, major recipients have poured some of it into politics – buying themselves tax cuts, special subsidies, bailouts, lenient antitrust enforcement, favorable bankruptcy rules, extended intellectual property protection, and other laws that add to their wealth.
All of which have given them more clout to get additional legal changes that enlarge their wealth even more.
Forty years ago, the estate tax was paid by 139,000 estates, according to the non-partisan Tax Policy Center. By 2000, it was paid by 52,000. This year it will be paid by just 5,500 estates. Under the House tax plan, it will be eliminated altogether.
Why do Americans pay more for pharmaceuticals than the citizens of every other advanced economy? Because Big Pharma has altered the laws in its favor. Why do we pay more for internet service than most other nations? Big cable’s political clout. Why can payday lenders get away with payday robbery? The political heft of big banks.
Multiply these examples across the economy and you get a huge hidden upward redistribution from the paychecks of average working people and the poor to top executives and investors. (I explain this in detail in the documentary “Saving Capitalism,” airing next week on Netflix.)
All this is terrible for the American economy.
More and better jobs depend on increasing demand for goods and services. This must come from the middle class and poor because the rich spend a far smaller share of their after-tax income.
Yet the middle class and poor have steadily lost purchasing power. Partly as a result, a relatively low share of the nation’s working-age population is employed today and the wages of the typical worker have been stuck in the mud.
The Republican tax plan will make all this worse by burdening the middle class and the poor even more.
A slew of analyses, including Congress’s own Joint Committee on Taxation, show that the GOP plan will raise taxes on many middle-class families.
It will also require cuts in government programs that middle and lower-income Americans depend on, such as Medicare and Medicaid.
And the plan will almost certainly explode the national debt, eventually causing many middle class and poor families to pay higher interest on their auto loans, mortgages, and credit cards.
I don’t care whether the top executives of big corporations, Wall Street moguls, and heirs to vast fortunes salute the flag and stand for the national anthem.
But they enjoy all the advantages of being American. Most couldn’t have got to where they are in any other country.
They have a patriotic duty to take on a fair share of the burden of keeping America going. And Trump and his enablers in Congress have a patriotic responsibility to make them.
Rep. Kevin Brady, R-Texas, and House Speaker Paul Ryan, R-Wis., right, unveil the GOP's tax overhaul plan. (J. Scott Applewhite / AP)
Tax Cuts and Jobs Act of 2017, introduced by House Republicans, is certainly about tax cuts (but almost entirely for wealthy Americans and corporations) but hardly about jobs at all. The 429-page whopper of a bill is a medley of discredited fiscal policies and political gifts to the GOP’s conservative base. It is also a crucial marker for whether or not Republican overreach will work. Having failed to pass health care reform, as I predicted earlier this year, the GOP’s tax reform bill is arguably the biggest test of the party’s ability to sell greed in the guise of helping most Americans.
Even more so than President Donald Trump, House Speaker Paul Ryan has owned the heart of the tax reform bill and deserves the most scorn for his hypocrisy in selling the plan as beneficial to the public. Ryan, joined by Texas Rep. Kevin Brady (who introduced the bill into the House Ways and Means Committee last week), surrounded himself with a group of ordinary-looking Americans and claimed the bill was “for the middle-class families in this country who deserve a break.” Without showing an iota of shame, Ryan added, “It is for the families who are out there living paycheck to paycheck, who just keep getting squeezed.”
But claims about how the bill will benefit ordinary people are being debunked. Before the bill was formally introduced, White House press secretary Sarah Huckabee Sanders claimed on Twitter: “The average American family would get a $4,000 raise under the President’s tax cut plan.” She innocently asked, “So how could any member of Congress be against it?” Amazingly, that $4,000 figure was not drawn from estimates of what “average” Americans might save on their tax bill, but rather was based on an unsubstantiated assumption that corporate America will be floating in so much extra cash from passage of the bill that some of its immense wealth will trickle down to Americans in the form of wage increases. Many studies show that trickle-down economics is nothing but a trick—one designed to help the rich.
Paul Ryan looking on as President Trump speaks about tax reform at the White House, last week.Credit Drew Angerer/Getty Images North America
According to news reports, Donald Trump wanted the House Republican tax “reform” bill to be called the Cut Cut Cut Act. Alas, he didn’t get his wish, and it was instead given a boring name nobody can remember. But there’s still time to change it! So let me propose, as one reader suggested, that it be renamed the Leona Helmsley Act, after the New York hotelier convicted of tax evasion, who famously declared that “only the little people pay taxes.”
That, after all, is the main thrust of the bill. It hugely favors the wealthy over the middle class, which is pretty much always true of Republican proposals. But it’s not just about favoring high incomes: It also systematically favors people who live off their assets, especially inherited wealth, over the little people — that is, poor shlubs who actually have to work for a living.
To get an idea why, consider four hypothetical taxpayers and how they would fare under the G.O.P. bill.
First is the poster child family Paul Ryan keeps talking about, a family with two children making $59,000 a year. In the first year of the Cut Cut Cut Act, such a family would indeed receive a tax cut. But this cut comes from several special tax credits that are basically loss leaders to help sell the plan; they all either expire in later years or will get eroded by inflation. By 2027, with the plan fully phased in, that exemplary family would actually be facing a significant tax increase relative to current law.
Second, consider someone who is much further up the scale, but still works for a living. In the movie “Wall Street,” Gordon Gekko sneers at “a $400,000-a-year working Wall Street stiff flying first class and being comfortable.” What would happen to that guy? Well, I’ve done some back-of-the envelope calculations: If you ignore deductions, he’d end up paying a few hundred dollars less in taxes. But once you take lost deductions into account, especially reduced deductions for state and local taxes, he almost certainly ends up facing a tax hike, not a cut.
And of course it’s not just Wall Street stiffs who would find themselves in that situation: So would doctors, lawyers, engineers, and other well-paid professionals. Overall, the Tax Policy Center estimates that more than a quarter of the population would see taxes go up, not down, under the G.O.P. proposal; for those with incomes between $200,000 and $500,000, that fraction rises to more than 40 percent.
But what about owners of small businesses? Under current law, their business income is “passed through” to their personal income, and taxed accordingly. The Cut Cut Cut Act would instead allow people with such income to pay only 25 percent, a big tax break for those with high incomes. But this raises obvious possibilities for abuse, with every well-paid professional reclassifying herself or himself as a business.
To limit these abuses, the G.O.P. bill imposes rules that basically limit the 25 percent rate to “passive” income recipients. That is, you get the full tax break only if you own a business but don’t, you know, actually run it.
Finally, let’s imagine a very lucky individual — let’s arbitrarily call him Eric Trump — who stands to inherit a stake in a business he doesn’t run, plus a bunch of stock. He’ll get his inheritance tax-free, because the estate tax gets phased out in the G.O.P. bill. He’ll get to pay a low tax rate on his business income. And his stocks will pay higher dividends, because the G.O.P. bill also sharply cuts corporate tax rates, and most of the benefit of those cuts will probably flow to shareholders.
So when Gary Cohn, Trump’s top economic adviser, says that the bill’s goal is “to deliver middle-class tax cuts to the hard-working families in this country,” he’s claiming that up is down and black is white. This bill does little or nothing for the middle class, and even among the affluent it’s biased against those who work hard in favor of the idle rich.
Also let’s not forget that tax increases on working Americans are only part of the story. This bill would also, according to the Congressional Budget Office, add $1.7 trillion to the national debt over the next decade. You know what that means: If this bill or anything like it passes, Republicans will immediately revert to their previous pretense of being deficit hawks and start demanding spending cuts.
And since federal spending is dominated by programs — Social Security, Medicare and Medicaid — that benefit the middle and working classes, the end result of this tax bill would be to leave most working Americans, even those who wouldn’t face direct tax increases, worse off, all for the benefit of a tiny minority, especially those who haven’t even worked for their wealth.
You might wonder how Republicans imagine that they can get away with this. But anyone who has paid attention to U.S. politics knows the answer. First, they will lie, unashamedly, about what their bill actually does. Second, they will try to distract working-class voters by stoking racial animosity. That didn’t work too well in Tuesday’s elections, but they’ll keep on trying.
How Dumb Do Republican Lawmakers Think the American People Are When It Comes To Taxes
by John Lawrence
The Republican tax "reform" is a reform that entails a massive transfer of wealth from the poor and middle class to the rich. Are the majority of Americans so dumb they are going to fall for this? What the Republicans giveth with one hand, they taketh away with the other.
Mitch McConnell, the Senate majority leader, acknowledged on Friday that the Republican tax plan might result in a tax hike for some working Americans, saying he “misspoke” days earlier when he said that “nobody in the middle class is going to get a tax increase” under the Senate bill.
Major middle class deductions for property tax and state and local taxes have been done away with. These deductions will hit states like California and New York, where property values are higher than other states, the hardest. Of course, that's the Republicans' intent. Punish your enemies. Meanwhile, doing away with the "death tax", as they call it, will guarantee that the intergenerational transfer of wealth will create permanent family dynasties.
In addition to blowing a hole in the budget, the Republican plan would give a much unnecessary boost to American business. American business is doing just fine as they are piling up cash in tax havens and overseas for which they want a tax "forgiveness" in order to repatriate the money so they can buy up their own stock like they did when the money was "repatriated" the last time.
The Times analysis found that roughly one-fifth of the Senate bill’s cuts in 2018 would go to families and individuals earning $1 million or more, and close to half would go to people earning at least $200,000. Between 10 million and 15 million taxpayers earning less than $100,000 a year would pay more than under existing law.
The Republican base, the Trump voters, would end up paying more, not less, just like they will end up paying more under "repeal and replace" if that ever becomes a reality.
Published on Tuesday, November 07, 2017 by Common Dreams
"The GOP tax plan is a simple political statement about who matters more in American democracy: the heirs to hedge fund fortunes or everyone else in the country."
House Speaker Paul Ryan (R-Wisc.) and his colleagues have promoted their tax plan as a win for middle-class families, but analysis shows otherwise. (Photo: @ChicagoTribune/Twitter)
Critics of the Republican tax plan say it offers a crystal-clear view of which Americans matter to the Trump administration and the Party in control of Congress—and which don't. Despite an aggressive push to portray the proposal as a tax cut for middle-class Americans, according to a New York Times analysis, millions of middle-income families would pay more in taxes immediately—and many more would see their tax bills rise over time.
"The GOP tax plan is a simple political statement about who matters more in American democracy: the heirs to hedge fund fortunes or everyone else in the country," wrote Zach Carter in the Huffington Post on Monday. "Trump and the Republicans have chosen the dynasts."
The analysis by the Times, similar to one shown by the Institute of Taxation and Economic Policy (ITEP), finds that 45 percent of middle-class Americans would be paying more in taxes within a decade, even if they see some modest relief initially. As theTimes notes, it's "a striking finding for a bill promoted as a middle-class tax cut."
Due to the elimination of personal exemptions, which allows many taxpayers to deduct $4,000 per household member, the tax plan would immediately be costly for many families with children. According to the Times, "Fewer than 40 percent of middle-class families with at least three children would receive a tax cut under the plan, compared with nearly 80 percent of families without children."
Households with large medical bills would be hit hard in 2018 as well, following the proposal's elimination of medical expenses deductions. Overall, about a third of middle-class families would pay more in 2018 than they do now—far from the rescue package House Speaker Paul Ryan (R-Wisc.) portrayed the tax plan as last week.
"These are matters of justice, social prestige, and political power," Carter wrote in the Huffington Post, regarding the GOP's insistence on . "There is no economic law that governs how the $19 trillion [in national wealth] we produce each year must be distributed. Figuring out who should get how much of that $19 trillion is a political choice—and the Republicans’ choice is to give much of that money to a few hundred financial dynasties."
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"We're talking, once again, about a system that's been rigged right here in Washington," said Sen. Elizabeth Warren (D-Mass.). (Photo: Elizabeth Warren/Twitter)
In a video released shortly after House Republicans unveiled a tax plan they claim "is for the middle class families in this country who deserve a break," Sens. Elizabeth Warren (D-Mass.) and Bernie Sanders (I-Vt.) argued—consistent with independent analyses—that the GOP's proposals would in fact primarily reward large corporations and wealthy individuals while slashing programs low-income and middle class Americans need to survive.
"Republicans are planning to rain about $2 trillion in tax giveaways down on giant corporations," Warren said, explaining that the central beneficiaries of the Trump-GOP "scam" will be Wall Street banks and billionaires, not the working class. "We're talking, once again, about a system that's been rigged right here in Washington—rigged so that the richest, thinnest slice at the top gets more and more, and they kick dirt in everybody else's face."
Sen. Elizabeth Warren (D-Mass.) speaking at Wednesday's rally."The reality is that this will be a tax bill that transfers 80 percent of the tax cuts to the wealthiest one percent," warned Rep. Pramila Jayapal in her comments. (Photo: Public Citizen/Twitter)
As Republicans struggle to unite on the details of their deeply unpopular tax cut legislation and brace for "all hell to break loose" once the plan finally goes public, progressive lawmakers, union leaders, and activists rallied outside of the Capitol building on Wednesday in opposition to the GOP "tax scam" and denounced President Donald Trump for attempting to push through rewards for his deep-pocketed donors at the expense of low-income and middle class Americans.
"We are going to kill this GOP tax plan just like we killed their healthcare bill." —Rep. Pramila Jayapal
"Everything you need to know about the Republican proposal is contained in this headline by the Boston Globe two weeks ago," said Sen. Bernie Sanders (I-Vt.) in a brief speech at the event. "The headline says: the Koch brothers and their friends want President Trump's tax cut very badly. This is tax reform for the Koch brothers and the other billionaires in this country.
The #NotOnePenny rally comes on the heels of news that the House GOP's planned rollout of its secretive tax bill was pushed back to Thursday due to intraparty disagreements and confusion. As ABCNewsreported on Wednesday, Republicans can't even agree on what to call the bill. Trump, ABC notes, is lobbying to name the legislation "The Cut Cut Cut Act."
While most of the details of the plan remain unclear, the New York Timesreported late Tuesday that the House GOP easily agreed on at least one element: "that the draft bill would cut the top corporate tax rate to 20 percent immediately, and not phase it in over a period of years."
"Healthcare showed us: change doesn't happen in these D.C. halls, it happens from the ground up." —Sen. Ron WydenOpponents of the Trump-GOP tax plan, meanwhile, are looking to do everything in their power to capitalize on any sign of weakness within the Republican ranks.
Chad Bolt, policy manager at Indivisible, wrote on Twitter Tuesday that House Republicans' decision to delay the release of their bill is an indication that "our pressure is already making Rs nervous."
"They're scared to face you," added Ben Wikler, MoveOn.org's Washington Director.
For weeks, progressive organizations have been gearing up for a struggle that they have warned will be "even harder" than the fight against Trumpcare. Now that bothchambers of Congress have cleared the necessary procedural hurdles by passing their respective budget resolutions—both of which called for more than a trillion dollars in cuts to key social programs—pressure to launch a resistance campaign that sparks the same grassroots intensity as the healthcare fight is beginning to mount.
"The reality is that this will be a tax bill that transfers 80 percent of the tax cuts to the wealthiest one percent," warned Rep. Pramila Jayapal, citing a recent Tax Policy Center analysis. "We are going to kill this GOP tax plan just like we killed their healthcare bill."
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The goal of Trump and the Republican leaders is to pull off a giant redistribution of over $1 trillion from the middle-class, working-class, and poor to the rich, who are already richer than ever.
They’re selling this to the public with a false claim that the middle-class will benefit from their tax cut plan. It’s a gigantic Trojan horse.
For most Americans, the proposed tax cuts are tiny and temporary. That’s right – temporary. They will shrink in just a few years. And some middle class Americans will actually get a tax increase.
Meanwhile, the top 1 percent will get a gigantic tax cut. The Tax Policy Center estimates that the current plan will save the bottom 80 percent between $50 and $450 in taxes per year, but that it saves each person in the top 1 percent an average of $129,000 a year. For people at the very top, like Trump himself, the tax cuts are humongous. And the corporations they own will also get a massive tax cut.
Republicans say economic “growth” will pay for the tax cuts, so there’s no need to cut social programs like Medicare and Medicaid.
But Republicans have just passed a budget that would cut nearly $1.5 trillion from Medicare and Medicaid to pay for these tax cuts. Pell Grants, housing assistance, and even cancer research are also on the chopping block.
Now, they say we shouldn’t take their budget resolution seriously. It was just a device to get the tax bill through the Senate with 51 votes.
But once these tax cuts are passed, the budget deficit will explode. The Tax Policy Center predicts that it will cut federal revenue by $2.4 trillion over the next 10 years.
When that happens, the only way out of the crisis will be something dramatic – exactly the cuts in Medicare and Medicaid, and maybe even Social Security – that Republicans have wanted for years.
By this time, any talk of raising taxes on the rich will be dismissed.
Using the promise of middle-class tax cuts as a Trojan horse for a tax windfall for the rich and deep spending cuts is a tactic dating back to the Reagan administration.
But the version they’re aiming for now is “YUGE.”
We must see the strategy for what it is. And it must be stopped.
Tax attorneys and corporate accountants use a blizzard of tax loopholes to book US-earned profits in subsidiaries located in offshore countries with minimal or no taxes.
"With profits near record levels, the companies have all the money they need for new investments. Most don’t see enough demand to justify expansion. Instead, as Bloomberg reported, Fortune 500 companies are spending more money on stock buybacks and dividends than they earn in operating profits. This boosts the price of their stock and, not incidentally, the value of their CEOs’ stock options." (Photo: Reuters/Gary Cameron)
With passage of their budget framework, Republicans in Congress have embarked on a preposterous mission of passing—in three weeks—a tax bill that still hasn’t been released to the public as of this writing. They plan to pass the bill, which is likely to end up near 1,000 pages in length, with only Republican votes.
This dynamic will set off a lobbyist scrum. This is when the rules get fixed to benefit the few, with lies and false promises floated to delude the many. One of the most egregious examples is the tax-repatriation and territoriality provisions, a “reform” that will reward tax avoidance by the big corporations.
Today global corporations are able to avoid paying US taxes by a legal loophole known as deferral. Taxes are deferred on an estimated $2.6 trillion in profits that corporations book as having been earned offshore. Republicans plan to allow “repatriation” of those funds at a deeply discounted tax rate (Trump has suggested 10 percent).
“We’ll be bringing back, probably, very close to 100 percent of the money back into our country where it can be put to work, and jobs will be created,” Trump boasted in front of a Pennsylvania crowd of truck drivers. “My Council of Economic Advisers estimates that this change, along with a lower tax rate, will likely give the typical American household a $4,000 pay raise.”
That sounds great, but don’t start checking out vacation spots. Everything about that statement is bunk. For the most part, the money isn’t earned abroad. Tax attorneys and corporate accountants use a blizzard of tax loopholes and dodges to book US-earned profits in subsidiaries located in offshore countries with minimal or no taxes.
A recent study by US PIRG and the Institute for Taxation and Economic Policy found that American multinational companies collectively reported 43 percent of their foreign earnings in five small tax haven countries: Bermuda, Ireland, Luxembourg, the Netherlands, and Switzerland. Yet these countries accounted for only 4 percent of the companies’ foreign workforces and just 7 percent of their foreign investments.
You know the plot: The bank robbers set off a bomb down the street from the bank, and while everyone’s distracted they get away with the loot.
In the reality TV show we’re now suffering through, Donald Trump is the bomb.
The robbers are the American oligarchs who bankroll the Republican Party, and who are plotting the biggest heist in American history – a massive tax cut estimated to be up to 5.8 trillion dollars.
Around 80 percent of it will benefit the richest 1 percent, according to the Tax Policy Center.
Trump is busily distracting America with his explosive tweets and incendiary tantrums – blasting Republican senators Jeff Flake and Bob Corker, NFL players who take the knee, Dreamers, refugees, immigrants, transgender people, the media, “rocket man,” Hillary Clinton, Obama, NAFTA, Muslims.
The Trump bomb is hugely damaging – unleashing hate, threatening democratic institutions, isolating America in the world.
But none of this seems to bother Republicans in Congress, except for a handful of Senators who won’t be running again. That’s because congressional Republicans are concentrating their efforts on pulling off the giant heist for their rich patrons.
They want to move quickly so no one notices – passing the tax cut before Christmas, with no hearings and minimal debate.
If the plot succeeds, most Americans will be robbed in three ways.
First, they’ll lose tax deductions they rely on – such as the deduction on earnings they put into tax-deferred savings in 401k plans. Some 55 million Americans now rely on 401(k) plans to save for retirement.
They’ll also lose the deduction for what they pay in state and local taxes. More than half of this deduction now goes to taxpayers with incomes of less than $200,000.
Republicans say the middle class will come out just fine because they’ll get a larger standard deduction. Not true. The average American’s tax bill will rise because the deductions they’ll lose will total more than the higher standard deduction Republicans are proposing.
Second, most Americans will lose government services that will have to be eliminated in order to pay for the giant tax cut – including, very likely, some Medicare and Medicaid.
About $1.5 billion in Medicare and Medicaid cuts were quietly included in the budget resolution Republicans just passed, in order to get their tax bill through the Senate with just 51 votes. (No one paid much attention because Trump was attacking grieving combat widows.)
Third, most Americans will have to pay higher interest on their car and mortgage loans and other money they borrow, because the huge tax cut will explode the national debt.
That debt is now around $20 trillion, or 70 percent of the total economy. If it goes much higher, it will crowd out borrowing and force interest rates upward.
Putting all this together, the theft would be the largest redistribution from the bottom 90 percent to the richest 1 percent in history.
Republican’s biggest fear is that word of the heist will leak out to the public, and their tax bill will be defeated by a handful of Senate Republican holdouts who feel the public pressure.
That’s exactly what happened with their plan to repeal the Affordable Care Act. The GOP’s big-money patrons pushed for repeal not because they had any principled objection to the Act, but because they didn’t want to fork over $144 billion in taxes on incomes over $1 million to pay for the Act over the next decade.
In the end, Republicans couldn’t get away with it because Americans learned that more than 23 million people would lose their health coverage, and Medicaid would also be on the chopping block.
Trump was willing to distract the public’s attention to give congressional Republicans a shot at repeal, but the moment the public started catching on he blew their cover. After the Congressional Budget Office announced the consequences of the Republican health bill, Trump called it “mean.”
He could do the same with the tax bill. He almost has. When word leaked out last week that Republicans were planning to limit 401(k) deductions, Trump tweeted that it wouldn’t happen (and then backtracked on his tweet).
The moneyed interests who run the GOP depend on the Trump bomb to divert attention from their huge heist. Their challenge is to make sure the bomb doesn’t go off in the wrong direction.
Tax reform as used by the Trump administration is an oxymoron, a travesty of words. a complete no sequitur. It reminds me of the Cole Porter song, Anything Goes.
The world has gone mad today And good's bad today, And black's white today, And day's night today, When most guys today That women prize today Are just silly gigolos
When Trump today, Can say one thing today And the complete opposite next day He's keeping you on your toes.
Words coming out of the President's mouth have no meaning, no significance. Well, back to tax "reform." There are those who, if they get a few cents reduction on their taxes, don't care if millionaires and billionaires get hundreds of thousands reductions on their taxes. This is the crowd Republicans play to. But Californians among others will actually pay more because they are going to do away with deductions for state and local taxes. What the Repubs give you with one hand they take away with the other.
True tax reform would be increasing taxes on the rich while reducing taxes on the poor. When you reduce taxes on everyone, then you have to ask yourself the question: what social programs are they going to do away with? Social security? Medicare? Medicaid? TANF? SNAP? Or are they simply going to add to the national deficit and consequently the national debt. They sure aren't going to cut the military-industrial complex budget, otherwise known as the defense budget.
Republicans are lusting after their tax cuts for the rich so much that they bite their tongues over Trump with a few exceptions like Flake and Corker who lashed out at the President. Even former Presidents have broken their silence. Corker even called the White House an "adult day care center." But Trump just laughs it off. Na na ne na na. Sour grapes. I'm President and you're not. I've got my finger on the nuclear trigger and you don't. America, under my administration, is great again.
Tax reform coming out of the mouths of Republicans is tax bullshit, tax legerdemain, tax chicanery, tax skullduggery. Now you see it. Now you don't. Beware the tax man cometh for you, but not for your rich neighbor. The economic divide wideneth.
Jared Kushner, senior advisor to U.S. President Donald Trump and U.S. Vice President Mike Pence attend a joint statemen in the Rose Garden held by U.S. President Donald Trump and Singapore Prime Minister Lee Hsien Loong October 23, 2017. (Photo: Win McNamee/Getty Images)
Just days after 51 Senate Republicans approved a budget resolution that paves the way for over a trillion dollars in cuts to life-saving safety net programs and a massive windfall for the wealthy, White House staffers teamed up with the President Donald Trump's rich donors to launch a multi-million dollar sales campaign aimed at winning over the American people, who polls have found are overwhelmingly opposed to slashing taxes for millionaires, billionaires, and large corporations.
"The GOP's plan to sell its tax bill is obvious: lie." —Ben Wikler, MoveOn.orgLate Monday, top White House officials quietly met with leaders of the "non-profit" America First Policies, which is affiliated with the pro-Trump super PAC America First Action. As Politico's Alex Isenstadt reports, both organizations have raised around $25 million in 2017, and the groups are looking to "play a more visible role" in the struggle to convince Americans that enormous tax breaks for corporations and the top one percent will primarily benefit the working class.
Non-partisan analyses have shown that the Trump-GOP plan, contrary to White House talking points, would disproportionately favor the rich.
Isenstadt summarized the White House donor meeting:
Those involved in Monday's gathering included Trump's son-in-law and senior adviser Jared Kushner and Vice President Mike Pence’s chief of staff, Nick Ayers. Also present were Brian Walsh, Brad Parscale, Katie Walsh, and Corey Lewandowski—all top strategists for the pro-Trump nonprofit America First Policies.
During the course of the hour-long meeting, top officials with America First Policies signaled plans to wage an aggressive effort to push tax reform, according to four people with knowledge of the discussion. The group told the White House it was planning to spend in the millions.
Trump is also set to meet with Senate Republicans on Capitol Hill Tuesday, where he hopes to "forge unity" behind a plan that critics have denounced as a "tax scam."
The White House's gathering with well-heeled donors and congressional Republicans to "plot" its tax plan sales campaign came as resistance groups are also preparing for a long fight against the Trump administration's efforts.
As Common Dreamsreported last week, MoveOn.org and a coalition of progressive tax organizations are teaming up to mobilize and counter White House and GOP "turbo spin mode."
Ben Wikler, Washington director of MoveOn.org, reiterated in a Twitter thread late Monday the importance of calling attention to the potentially devastating consequences of the Republican tax push and remaining focused amid the "constant barrage" of Trump-related chaos.
"The GOP's plan to sell its tax bill is obvious: lie. The longer the debate rages, the more their lies crumble. So they want speed. We delay," Wikler wrote. "The GOP knows their donors will drop them like a hot rock if they don't deliver tax cuts for their billionaires. Works for me. Let's do that... and in the process, we just might rescue healthcare, pell grants, disaster preparedness, and every other damn thing the federal government does."
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While some Americans contemplate living in RVs and hopefully avoid living on the street, rich older people are doing better than ever. Among people over 65, the wealthiest 20 percent own virtually all of the nation’s $25 trillion in retirement accounts, according to the Economic Policy Institute.
Social security payments are hardly keeping up with inflation. While the government charges more every year for Medicare, which comes out of the social security payment, social security is not raised enough to keep up with the result that effectively retirees get less and less in their social security year after year. Most older people are going to have to work until they die or get too sick to work any more.
Fundamental changes in the U.S. retirement system have shifted responsibility for saving from the employer to the worker, exacerbating the nation’s rich-poor divide. Two recent recessions devastated personal savings. And at a time when 10,000 baby boomers are turning 65 every day, Social Security benefits have lost about a third of their purchasing power since 2000.
Nearly 20% of older people have no other income than social security. For a third of this population social security represents 90% of their income. Social security payments are slightly better than the poverty threshold, but significantly less than the Federal minimum wage.
Old folks are less afraid of dying than they are of running out of money. One in 5 have no savings, and millions retire with nothing in the bank. Nearly 30 percent of households headed by someone 55 or older have neither a pension nor any retirement savings, according to a 2015 report from the U.S. Government Accountability Office.
While COLAs have increased social security benefits by 43% since 2000, Medicare Part B payments have increased by 195%. Prescription drugs have increased 184%. Real estate taxes have increased by 147%. If the government wants to keep seniors in their homes (Ha! Ha!), real estate taxes should be waived for senior citizens.
Meanwhile Trump is slashing taxes for the rich and "reforming" the tax code by making mortgage interest and state taxes not deductible any more. Some reform.
Published on Tuesday, October 17, 2017 by Common Dreams
"As Congress considers proposals to institute a near zero percent tax rate on profits booked offshore by multinational corporations, the findings in this report should give policymakers pause."
"Congress created the loopholes in our tax code that allow offshore tax avoidance and force ordinary Americans to make up the difference," the new study observes. (Photo: Michael Fleshman/Flickr/cc)
As President Donald Trump and the Republican-controlled Congress intensify their push for massive corporate tax cuts that critics have said would encourage businesses to offshore profits and jobs, a new report published Tuesday by U.S. PIRG and the Institute on Taxation and Economic Policy (ITEP) found that 73 percent of companies on the Fortune 500 list are already taking advantage of overseas tax havens—costing the United States $752 billion in federal tax revenue last year alone.
"Lawmakers shouldn't be discussing how to sweeten the pot and give corporations a huge tax break that amounts to a huge financial reward for engaging in bad corporate behavior." —Richard Phillips, Institute on Taxation and Economic Policy
The new study discovered that, in total, America's most profitable corporations in 2016 had $2.6 trillion stashed overseas in over 9,000 subsidiaries in various locations, including notorious tax havens like Bermuda and the Cayman Islands.
Clark Gascoigne, deputy director of the Financial Accountability and Corporate Transparency (FACT) Coalition, cautioned in a statement on Tuesday that the Trump-GOP tax proposals would, if passed, make this bad situation even worse.
"As Congress considers proposals to institute a near zero percent tax rate on profits booked offshore by multinational corporations, the findings in this report should give policymakers pause," Gascoigne said. "The study shows that today's flawed tax system allows for gaming on a grand scale."
The PIRG-ITEP analysis makes clear that corporate tax avoidance is both an unnecessary problem—"Congress created the loopholes in our tax code that allow offshore tax avoidance and force ordinary Americans to make up the difference"—and a pervasive one.
At least 366 of the 500 companies on Fortune's list "operate one or more subsidiaries in tax haven countries." Furthermore, "30 companies with the most money officially booked offshore for tax purposes collectively operate 2,213 tax haven subsidiaries."
But the report also highlights the fact that there are several "particularly egregious examples":
Apple, which "holds at least $246 billion offshore, a sum greater than any other company's offshore cash pile," would owe $76.7 billion in U.S. taxes if this profit was not overseas;
Citigroup, which stashes $47 billion overseas, would owe $13.1 billion in U.S taxes; and
Nike, which holds $12.2 billion offshore, would owe $4.1 billion in U.S. taxes.
Published on Thursday, October 05, 2017 by Common Dreams
More than half of House Democrats voted in favor of the People's Budget, which is "truly designed to represent the values and needs of the American people."
"The Republican budget says we should invest millions of dollars into tax cuts for millionaires, billionaires, and the largest corporations," said Rep. Pramila Jayapal (D-Wash.). (Photo: Rep. Raul Grijalva/Twitter)
As the Republican Party and President Donald Trump gear up to slash over five trillion dollars from crucial safety net programs in order ram through exorbitant tax cuts for the wealthiest Americans, a majority of House Democrats on Wednesday voted in favor of the People's Budget (pdf), an ambitious alternative to GOP's "pathetic" proposals that would invest trillions in education, infrastructure, and healthcare while cutting the nation's out-of-control military spending.
"It's one thing to oppose President Trump and expose his broken promises to workers, but it's also important to lay out a positive path forward." —Rep. Mark Pocan
"Today's vote on the People's Budget marks the closest Congress has come to passing a budget that was truly designed to represent the values and needs of the American people," Paul Kawika Martin, senior director for policy and political affairs at Peace Action, said in a statement following Wednesday's vote. "With over half the Democrats voting for the People's Budget it's clear the party supports smart reductions in Pentagon bloat and wise investments in diplomacy which will make Americans safer.All members of Congress who voted for the People's Budget deserve the thanks of their constituents."
First introduced by the Congressional Progressive Caucus (CPC) in May, the current version of the People's Budget was conceived as an attempt by progressive Democrats to move beyond their defensive posture and offer a positive vision of the future—one they hope can translate into electoral victories in 2018 and beyond.
Among the People's Budget's aims are:
A $2 trillion investment in America's energy, water, and transportation systems.
Higher taxes on Wall Street firms and corporations that offshore jobs.
A minimum wage hike and stronger union rights.
Expansion of mental health treatment and lower prescription drug costs.
Public funding of campaigns to curb corporate influence in elections.
Rein in "excessive CEO pay for defense contractors."
Audit the Pentagon budget.
Make debt free college "a reality for all students."
"It's one thing to oppose President Trump and expose his broken promises to workers, but it's also important to lay out a positive path forward," said CPC co-chair Rep. Mark Pocan (D-Wis.) after the People's Budget was introduced earlier this year. "The CPC's budget is a plan to actually help working Americans who have felt left behind by an economy rigged against them."
Though the CPC has been putting forth such a budgetary vision for years—proposals routinely ignored by the mainstream media and therefore largely left out of the public debate—this year's budget has garnered more backing from Democratic members than any previous version.
As Common Dreamsreported on Wednesday, congressional Democrats and Sen. Bernie Sanders (I-Vt.) have in recent days ramped up their attacks on the GOP's attempts to mislead the public with a tax plan that non-partisan analyses have shown would disproportionately favor the top one percent.
Speaking on the House floor Wednesday, Rep Pramila Jayapal (D-Wash.) contrasted the GOP's vision with the agenda outlined by the Progressive Caucus.
"The Republican budget says we should invest millions of dollars into tax cuts for millionaires, billionaires, and the largest corporations," Jayapal said. "The Progressive Caucus budget says we want to invest in people. We believe in working families across this country who want to have a decent life and want to build a better future. I choose investing in the people."
Trump and Republicans are trying to sell you the idea that American corporations need a tax cut in order to be competitive. That’s rubbish. Here are 6 reasons why:
First, American corporations don’t need it in order to be competitive internationally. After tax credits and deductions, their effective tax rate is just about the same as paid by corporations in most of our major trading partners, according to the U.S. Treasury.
Second, American corporations are making more money than ever. Their after-tax profits are a higher share of the total economy than ever. American corporations earn nearly half of all global profits, even though the U.S. economy is about a fifth the size of the world economy.
Third, the long-term competitiveness of American corporations depends far more on a well-educated and skilled workforce, modern infrastructure, and basic research than on tax rates. And the way we finance these necessary public investment is through … taxes.
Fourth, American corporations are now paying less in taxes than they have in 65 years. Corporate tax receipts are the lowest percentage of the economy since just after World War II. If corporate taxes are cut, you will have to pay even more in taxes in order to make up the difference.
Fifth, if their taxes were cut, corporations won’t use the extra money to make new investments in plant, equipment, research and development, or jobs. They’re already using their vast stockpiles of cash to buy back shares and thereby boost stock prices, and for extravagant bonuses and salaries to CEOs and other top executives. That’s what they would do with any additional cash.
Sixth, the reason they’re not investing more is because consumers don’t have the purchasing power to buy more, and that’s because most people’s incomes have gone nowhere for decades. And why is that? Because corporations have been holding down wages by outsourcing abroad, substituting software for jobs, contracting work out to part-time workers, and fighting unions.
A corporate tax cut is the wrong solution to the wrong problem. The real problem is stagnant wages of most Americans, coupled with declining public investments in schools, roads, public transportation, and basic research – all the things average working Americans need in order to become more productive and get higher wages. To finance these we need higher corporate taxes, not lower.
Last year, I proposed a handy rule of thumb for evaluating the economic proposals of politicians: The more growth they promise, the worse their plan probably is.
Why? Because the promise of bonkers growth usually means the politicians need that bonkers growth to paper over the ginormous deficits sure to follow — in the real world, under more realistic assumptions.
If you assume that the economy goes gangbusters and everyone gets a lot richer, then the tax base swells, spending on social-safety-net services falls, and hallelujah! That expensive thing you want no longer looks so expensive. Maybe it’s even free!
“We think we can pay for the entire tax cut through growth over the cycle,” he explained. Uh-huh.
This rule of thumb was useful during the presidential campaign, when candidates promised that their infrastructure, health and tax proposals would “pay for themselves” through faster growth. It’s relevant again with the “Big Six’s” new tax “plan.”
I put “plan” in scare-quotes here because it’s not really a plan. At best it’s an outline, offering barely more detail than the bullet points the Trump administration released in April. It doesn’t even specify the thresholds for the individual income-tax rates it proposes. It also doesn’t identify a single individual tax preference it would kill, despite claiming to simplify the code and close lots of “loopholes.” Even the state and local tax deduction, which administration officials have talked about eliminating, isn’t explicitly mentioned.
The plan’s designers may not know what their proposal is, exactly, but they know it will turbocharge growth.
WASHINGTON — Many Californians face a big financial hit under the Republican tax plan, which would eliminate a major tax break that benefits state residents more than those anywhere else in the U.S.
The federal deduction for state and local taxes allowed Californians to reduce their taxable income by $101 billion in 2014, according to an analysis by the nonpartisan Tax Foundation.
The tax outline released Wednesday by President Trump and top congressional Republicans would ax the break, which largely benefits residents in states that are Democratic strongholds.
“Republicans in Washington have once again zeroed in on California to punish us and make our state the single biggest loser in their reckless tax scheme,” said state Senate President Pro Tem Kevin de León (D-Los Angeles). Sen. Dianne Feinstein (D-Calif.) said the elimination of the deduction was one reason the plan was a “nonstarter” for her.
“I don’t believe California should suffer in order for President Trump to give tax cuts to the rich,” she said.
The plan also left open the possibility of another big hit: new limits on the deduction for home mortgage interest, which would have a greater effect on states with higher housing costs, such as California and New York.
