Posted on 11/06/2017 7:22:24 PM PST by SkyPilot
Ask Matt Labash, who says the GOP should have called its tax reform measure the "Robbing Peter to Pay Apple Act."
Dear Matt, Republicans have called their tax bill “The Tax Cut and Jobs Act.” President Trump wanted to call it “The Cut, Cut, Cut Act” (And here we thought his specialty was branding.) What would you have named it?
H.R. Block I’d be fine with calling it “The Republicans Pissing Down Your Leg While Telling You That You’re Bathing In A Warm Mineral Spring Act.” Or maybe “The Robbing Peter to Pay Apple Act.” (In this scenario, you, the lowly individual taxpayer, are Peter. Apple is Apple.)
If you want balanced, even-keeled, somewhat optimistic analysis of the proposed tax bill, I’d hand you off to my ever-capable colleague, Chris Deaton (also the regular editor of this column). If you want to hear the anguished, soul-wracked keening of a man whose ox was just gored, pull up a chair and sit a spell. You’ve come to the right place.
For I am that unfortunate species that Republicans want to pretend doesn’t exist: the middle-class schlub who will not feel tax relief, but tax pain, even as they attempt to re-cut the tax pie so that corporations get a 43 percent tax reduction (from 35 percent to 20 percent), while my top tax rate stays the same (25 percent) and I lose the lion’s share of my itemized deductions. Meaning my taxes, unlike most corporations, are going up, even as I’ll be getting taxed at a higher rate than Apple—whose 2016 revenue was $215.6 billion.
Or put another way, Apple’s revenue alone, last year, amounted to 72 percent of the cost of all individual tax cuts in the Republicans’ $1.5 trillion plan. According to the bipartisan Committee for A Responsible Federal Budget—Remember responsible budgets? Don’t worry if you don’t, neither does former deficit hawk Paul Ryan—only roughly $300 billion of the $1.5 trillion purported tax cut is due individual taxpayers. The rest goes to business tax cuts ($1 trillion) and repeal of the estate tax ($200 billion). If you’re a multinational corporation whose obscenely rich parents just died, you’re in the money!
Even when I abstained from voting for them (which I have for three out of the last four national elections), I am that breed of Republican who endured all manner of Republican inanities—misdirected foreign adventures, ill-advised government shutdowns, Sarah Palin—reasoning that no matter how inept Republicans were (very, it turns out), at least they didn’t pick my pockets, unlike Democrats. So I patiently endured eight years of Barack Obama hiking tobacco taxes, and Medicare payroll taxes, and indoor tanning service taxes, among many others. Only to emerge from that tunnel of darkness to see a unified Republican government touch the one thing Obama didn’t touch: federal income taxes. My own faux-populist party is now hiking taxes for me, and many millions of others, in the name of their hilariously billed “tax relief” plan.
At least I think my taxes will be hiked. It’s yet to be seen, as details still need to be hammered out in committee, and legislation needs to get passed. (Republicans, thus far, have proven unable to pass so much as gas, though if they did, they’d likely claim that the fake-news liberal media smelt it/dealt it.) Plus I have not yet run the numbers by my middle-class accountant. Whose services, under the new bill, I will no longer be able to deduct on my taxes, and who Republicans seem to want to make obsolete, thus eliminating more middle-class jobs. (“The only people who won’t like this is H&R Block,” taunted faux-populist-in-chief, Donald Trump.)
Better for me, Republicans would have it, to file my taxes on a postcard at a higher rate (so simple and befitting our modern attention span!), rather than pay some frazzled numbers-cruncher a couple hundred bucks around April 15 to cut my tax burden in half by exploiting tax code deductions that help me keep a little more of the money I earned, rather than packing it off to the federal kitty. (My effective rate is usually around 12 percent, after all is said and done. Which is about to change drastically. “Simple” is not always better, as the simple-minded would have us believe.)
Aside from no longer being able to deduct most of my business expenses under the sorry excuse of “simplification”—magazine subscriptions, gas miles, jumper-cable nipple clamps for difficult interview subjects—I’m really taking a hit with the elimination of half of the state and local taxes deduction (SALT). While Trump’s pet Democrats, posing as Republicans (that means you, Gary Cohn and Steven Mnuchin), flirted with raking revenue with everything from 401(k) contributions to charitable giving (which they’ve, for now, left alone), eliminating the SALT deduction seems to be their compulsory revenue-extracting vehicle of choice to fund their massive corporate giveaway.
After enduring a lobbying outcry from the home builders and realtors of America, echoed by anguished northeastern congressional Republican heroes from blue states, like Peter King and Lee Zeldin (both of New York), Republicans have decided to leave the cherished mortgage-interest deduction alone. Sort of—they cap it at $500,000 of debt for new mortgages on “primary” homes—which doesn’t even buy you a McMansion anymore in heavily populated zip codes. Also they’ve let stand deducting property taxes. Again, sort of—they cap property-tax deductions at $10,000.
But no longer are you allowed to deduct your state income taxes on your federal form. If you listen to the dog-whistle demagoguery emanating from House Republican leaders on this issue, you’d think the only people who enjoy a SALT deduction are from wealthy, coastal blue states. (Which is disturbing enough on its own—since when do we decide national tax policy on how people vote?) But like most of what comes out of Trump and House Republicans these days, they’re full of crap. (See Trump’s repeated claims that this is the largest tax cut of all-time. It’s not. Even if their numbers are what they purport them to be, this tax cut ranks well down the list, and no higher, in terms of GDP, than two tax cuts advanced under Barack Obama.)
Every state enjoys the SALT deduction. Some less than others. While it inarguably skews towards benefitting people who live in wealthy, high-tax states (mostly blue ones), it’s not just a tax break for the wealthy, as the Tax Foundation illustrates. While 80.55 percent of people in the $100,000-$499,999 income bracket currently itemize, claiming 6.55 percent of SALT deductions as a percentage of adjusted gross income, so do 45.63 percent of people in the $50,0000-99,999 range (claiming 3.95 percent in SALT deductions as a percentage of AGI), and 19.77 percent of those in the $25,000-49,999 range (with a 2.1 SALT deduction as a percentage of AGI).
The automatonic refrain of House Republicans has become: Why should lower-tax states subsidize high-tax states who disproportionately exploit the SALT deduction? This cynical electoral creative math, of course, leaves aside Republicans’ usual fetishizing of federalism, devolution, and holding that localities are better equipped to address the needs of their citizens than is the federal government.
But sure, red staters, gloat in the fact that, say, Alaska, South Dakota, and Wyoming represent only 0.1 percent apiece of a state share of SALT deductions. As opposed to say, coastal blue states like California, New York, or New Jersey (19.6 percent, 13.3 percent, and 5.9 percent, respectively.) Good on you. Except that you also, if you’re being honest, have to calculate that state taxes present a complex multi-faceted picture. (When it comes to federal revenue, all of the sudden, conservative congresspersons are no longer pro-states’ rights.)
For instance, seven states pay no state income tax at all, five of seven of which went red in the last presidential election. And when Wallethub, a personal finance site, calculated which states were most dependent on federal funds, a contrarian picture emerges. The top five federally dependent states were Kentucky, Mississippi, New Mexico, Alabama, and West Virginia. Four out of five of which went for Trump. The five least dependent states? All SALT-deduction lovers who pay more than their fair share of federal taxes: California, Illinois, New Jersey, Minnesota, and Delaware. Five of five of which went blue in the last election.
Hate to break the news to you, Trump-loving Alabamans, but even the SALT-deducting hedge-fund manager in Greenwich isn’t the welfare queen that you are. Connecticut = the 42nd most-dependent state on federal finances. Alabama = the fourth most-dependent state. When calculating federal tax revenue by state, six out of the top ten payers are blue states. So despite Republicans’ haste to punish coastal blue states, who suffer higher costs of living/state taxes, and therefore benefit disproportionately from taking SALT deductions, exactly who is subsidizing who is a very open question.
I’m not always happy about living in the People’s Republic of Maryland. For instance, we’re one of the few states with a “flush tax”: a tax for flushing our toilet, ostensibly to restore the Chesapeake Bay. (I’m a devoted fisherman, but presumably, stripers are catching toilet paper runoff in the face whether I pay my taxes or don’t.) And we love our SALT deductions. But even here, we’re still less federally dependent than red states like Georgia, Louisiana, and Montana. If House Republicans still don’t want to acknowledge that reality, maybe all us blue-state dwellers can move to Mississippi, and drive their costs of living to hell, too.
Of course, SALT-deducters aren’t the only ones getting screwed. Read the tax-plan analysis roundups, such as this or this, and it’s pretty clear that homebuilders, plenty of small-business owners, charities, people who adopt children, teachers expensing their classroom supplies, disaster-victims, and rare-disease sufferers are getting hosed, too. And that’s to name but a few sufferers under the Republican plan for “tax relief.”
But at least we can all agree on the winners: corporate giants like Apple. Of the top five richest companies in America—Apple, Alphabet (Google’s parent company), Microsoft, Berkshire Hathaway, and Amazon—their most recent effective tax rates are 25.8 percent, 19.35 percent, 17.64 percent, 19.35 percent, and 27.45 percent, all well below the current 35 percent statutory rate. And this is without the House Republican bill. Yet while the top individual tax rate remains at 39.6 percent, even as Apple and co’s. rate will be dropped to 20 percent while they keep most of their deductions, unlike you and me, the sky is the limit on how far they can go. I can’t wait to see what Trump’s new populist tax plan has in store for working stiffs like Apple! Maybe they can finally reinforce those suicide nets at their iPhone sweatshops in China.
You make is sound like the guy who wrote this is the only person on the planet who has figured out that this bill is sham and a massive tax increase on millions of individuals and households. He isn't. Next, if he is a "never Trumper", he was wrong on Trump, and correct on the tax bill being a rip off. Robert E. Lee was wrong on Pickett's Charge, and correct on most everything else.
I can’t even accept that you will pay more in taxes because you’re so emotionally distraught. Love of money will do that to you.
Of please. Who is projecting now?
And if you are going to dare to accuse me of being on the wrong side of 1 Timothy 6:10, then how come the corporations who want a cut down to 20% are not violating that? I am not obscenely wealthy. I don't worship money either. But I know when I am being targeting by Washington, and being lied to about it.
I remember when so-called "Conservatives" were opposed to Washington sticking it to us with higher taxes.
I guess we are in new era now: the "Paul Ryan Party"
Wow. Just wow.
So opposing getting ripped off from DC makes me the villain? You don't even know me or my situation. Yet you dare even ask me that?
Who is the Communist now?
And I've read yours on this thread. You are constanty whining about how people should not be opposed to getting their taxes massively raised by Washington.
And your point of pointing to that "calculator" is.....what? Do you simply choose to ignore those who state (even by using it) that they are going to pay a lot more?
Or do you only care that this passes, because you see yourself as one of the "winners" in this sham of a bill?
I have spoken to a friend of mine in CA who is retired and on a fixed income. His own tax accountant told him that in the bill's current form, he will be in serious, serious trouble.
At all.
But if someone who worked for Kristol told you the sky was blue, would you discount that fact because you disliked Kristol?
People on this thread are making believe this article is the only single source for factual information that this tax bill is a major screw job for millions of people.
People can do their own research, and also, the author hyperlinked many outside sources to his piece that backs up what he is saying.
I used to think it was only the Democrats who acted like lemmings and followed their leaders with blind faith. I was wrong. It looks like many in the GOP simply do the same thing.
And many middle class as well.
Correct lightman.
democrat_media believes he has this buzz word called "central planning" that he/she can throw out regarding itemizations. Since central planning is communistic, he/she thinks the argument is automatically won through a cynical smear tactic.
The reality is that it is now the GOP who are trying to "central plan" millions of the rest of us. When called out on it, they spew insults and false labels.
If they kill this bill they kill the presidency of DJ Trump. I’ve no doubt.
Using the calculator Jim Robinson provided, it is evident I will probably getting a tax cut.
And this supposedly savvy business writer does not once mention that corporations do not really pay taxes. Does anyone really think Apple phones exclude all their production costs from the price of the phones they sell? No. They put the plastic cost in the price they charge, they put the processor cost in, the memory cost in, the screen in, the metal in, the labor cost in, the advertising cost in, the transportation cost in, AND the tax cost in.
That’s just the way it is.
Corporations don’t pay taxes. The higher their taxes, the higher the cost of the phone, and the less attactive it is at home and abroad.
Yep - and some who never looked at it claimed that some truths were untrue. I mentioned that up to a certain point, those in the 12% tax bracket were taxed at an 8% rate (as displayed/noted on the calculation page and which applied to me and my wife) and they said I was nuts because there is no 8% bracket...as if people only get taxed at a single specific rate for each bracket......never happened and probably never will.
This statement from the Chronicle is correct:
“Just like people, corporations have to pay taxes. For any incorporated business, the IRS sets rules for deductible expenses, exempt income and tax credits, and levies a progressive tax rate that varies depending on the corporation's net taxable income.”
Furthermore, if there were no net loss of revenue to the Feds by cutting the corporate rate from 35% to 20% (as it is clearly written in this bill), then there would be no need for the de facto tax INCREASE on the rest of us in order to “pay for” their tax cut. You are trying to argue a semantic or philosophical approach, not the reality of this bill, which has as its foundation winners (corporations), and losers (middle and upper middle class taxpayers who rely on the deductions medical expenses, SALT, mortgage interest, etc. that this bill either caps or eliminates altogether).
I’m a little over that threshold and single.
Lost deductions mean my taxes go up several thousand dollars/yr.
” That’s government dictating what is “good” and what can be deducted. “
When Congress first passed the Income Tax, circa 1913, the ONLY deductions were for income used to pay other taxes.
The SALT deductions.
It was widely recognized then that it was immoral to tax the dollars used to PAY taxes as income.
Even the commie progressives of that era realized what the Republicans and their supporters today do not.
“How much more material wealth do you want to be satisfied ?”
This, ladies and gentlemen, is what I have been saying about the supporters of this plan all along.
Once you open the hood, there’s a Social Justice Warrior inside.
A commie.
“Itemized deductions is central planning by government. Agree or not?”
It’s apparent you’ve never itemized.
There is both social engineering...like subsidy for children, incentive to care for the elderly, charitable deductions, deductions for home ownership etc.
Should we eliminate those? If not, why not?
And there are deductions for taxes paid to other entities. Money used to pay taxes should not be taxed.
“No Republican in a high-tax state can vote for this bill as is so I can’t imagine how it can pass or why it was introduced.”
If the 34 Republican House members in CA, NJ and NY do not know how pissed we are, that we see through their smoke and derision, they will be genuinely surprised when they get unelected in 2018.
It was introduced because the business lobby insisted. Already they are threatening to withhold reelection money if it does not pass.
“Not perfect, but good enough. “
It’s apparent your taxes are not going up.
How about arguing the FACTS rather than the origin of them?
It’s likely the Russians were the origin of the DNC emails. Should we have ignored them and ridiculed anyone who did not?
That’s the logic of your source concern.
“Do you think being a good conservative means espousing unlimited greed? “
Being a good conservative means you don’t get a vote on somebody else’s wealth.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.
