‘A Republican Party whose only purpose is to comfort the already extremely comfortable’

In Senate Tea-Publicans’ mad dash to rewrite the tax code on Friday, lawmakers added loopholes for the wealthy but tightened deductions for middle-income workers. Tax Bill Offers Last-Minute Breaks for Developers, Banks and Oil Industry:

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

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

Still, it was clear that many changes expanded tax benefits for the wealthiest taxpayers, while other attempts to close loopholes fell by the wayside. The bill would add $1 trillion to deficits over the coming decade.

Far from simplifying taxes, the bill opened up a whole range of tactics [for busnesses] to lower the amount owed to the Internal Revenue Service.

Lower Taxes for Top 1 Percent

One of the bill’s biggest windfalls for the wealthy — cutting taxes on income received through so-called pass-through entities like partnerships, popular with real estate developers — got even more generous. The richest taxpayers will be taxed at a rate of about 29.6 percent on such income, a big cut from the current top federal income tax rate of 39.6.

The ever-lengthening list of income that will be taxed at a cut-rate could be seen as “a Donald J. Trump loophole,” said Steven M. Rosenthal of the nonpartisan Tax Policy Center.

That expansion would cost the government $114 billion more than an earlier version of the proposal. The provision would lower rates for taxpayers simply if their businesses are organized as partnerships or other entities whose tax burdens flow to the individual. Half of that type of income goes to the top 1 percent of taxpayers, according to the Tax Policy Center. In total, that tax cut will cost the government about $476 billion over the coming decade.

Thanks to an amendment offered by Senator John Cornyn, Republican of Texas, certain income from gas and oil operators could also qualify for the new, lower rate. Industry representatives said they would have been excluded from the intended benefits that the real estate investment trusts and other publicly traded industries were getting.

The Senate went out of its way to confirm that passive investors in these publicly traded investment vehicles get the benefit of the pass-through discount tax rate,” said Edward D. Kleinbard, a professor of tax law at the University of Southern California and a former chief of staff for the congressional Joint Committee on Taxation. “This is a working definition of a tax boondoggle.

Offshore Tax Break

A provision to give multinational companies like Pfizer, Google and Apple a tax break on the profits they have accumulated in offshore tax havens was made less generous than earlier versions of the proposal. But the companies would still bring those earnings home at rates of 7.5 to 14.5 percent — well below the existing corporate income tax rate of 35 percent and also lower than the new corporate income tax rate, which the bill would cut nearly in half to 20 percent. This break will still save the companies roughly half a trillion dollars compared with current law, according to an estimate by the Zion Research Group.

Banks Avoid a Hit

Banks and other financial institutions will still be able to avoid taxes by making payments to offshore subsidiaries. The lawmakers had initially intended to prevent the tax benefits from such actions, but the banks got a last-minute reprieve for some transactions. In calculating the companies’ tax bills, the bill excludes payments related to derivatives, a big source of income for financial institutions.

* * *

Benefit for Car Dealers

Some last-minute changes were smaller and more peculiar: The federal tax code includes limits on how much interest companies can deduct from their taxes. But the bill now excludes from those restrictions interest paid by car dealerships.

Alternative Minimum Tax Confusion

The bill extends so-called bonus depreciation — the ability to take big deductions related to certain corporate investments — at a cost of $34 billion, but pays for it by reinstating the corporate alternative minimum tax. The last-minute decision to scrap the repeal of the corporate alternative minimum tax left lawyers and accountants scratching their heads about the ultimate impact. Several experts said it appeared unintentional that the benefit of the tax credit for research and experimentation could effectively be lost. The provision is dear to many businesses.

Family Leave Credit, but Not for Everyone

At least one Republican proposal floated for weeks made it into the final bill, but seemingly in a form designed to punish taxpayers in Democratic states. Senator Deb Fischer, Republican of Nebraska, introduced an employee credit for paid family and medical leave. But the final version doesn’t apply to employers in states where such paid leave is either required — or will soon be required — by state law, as in New York, California, New Jersey and Rhode Island. It also doesn’t apply to employees making more than $72,000 and will last only until the end of 2019.

“So in sum, we’ve got a short-term fertility incentive for lower/middle-income employees, as long as you don’t live in too blue a state,” Daniel Hemel, a professor of tax law at the University of Chicago, wrote on Twitter.

Hits for Low-Income Earners

While wealthy investors and business would receive numerous tax cuts — including eliminating the estate tax for all but a tiny sliver of the country’s wealthiest households — the Senate moved to tighten deductions for lower- and middle-income wage earners. The bill, for example, prohibits employers from rewarding employees with gift cards so that a reward of, say, $25 or $50 in the form of a gift card doesn’t escape being taxed.

At the same time, a provision to fund the I.R.S. so that it could offer advice to low-income filers was rejected in the final bill.

Although the bill expands the child tax credit by a year to 17-year-olds, that change ends at the end of 2024, a year before other individual tax cuts are scheduled to expire — so families with children born in 2008 will see that credit end when their children are still 16.

Subsidy for Private and Religious Schools

In the early morning hours on Saturday, Vice President Mike Pence cast a tiebreaking vote to pass an amendment to allow people to use up to $10,000 a year from tax-advantaged 529 savings accounts for private and religious schools and some home schooling. Under current law, 529 accounts can be used only for higher education.

E.J. Dionne of the Washington Post writes today, The populist mask is slipping for Trump and the GOP:

Dec. 1, 2017, will be remembered as the day when the vast majority of Americans fully grasped the consequences of the 2016 elections. They installed a man in the White House “likely to be under investigation for criminality for a very, very long time to come.” And they gave power to a Republican Party whose only purpose is to comfort the already extremely comfortable.

* * *

[I]t’s almost as important that Friday was also the day Senate Republican leaders brought forth a tax bill heralding the death of anything resembling a populist form of conservatism within the Republican Party. Plutocracy will now be the GOP’s calling card. Facing one of the most scandalous special-interest tax bills in a long history of such measures, even supposedly moderate members of the party caved in before the power of big money when the votes were counted early Saturday morning.

Republicans proved one other thing: What they say when they are out of power should never be believed again. Their progressive opponents, in turn, should never feel constrained in the future to limit their own ambitions out of deference to empty slogans about the superiority of bipartisanship.

When President Barack Obama was in office, conservatives waxed hysterical about the horrors of deficits by way of limiting government’s ability to help the needy or expand health insurance coverage. They spoke over and over about how terrible it was to pass bills on a partisan basis and how their foes should govern from “the center.”

Now that the GOP has the votes, all those statements are inoperative. The party is running roughshod over democratic accountability and falling short of even minimal expectations of congressional decorum.

The leaders of “the world’s greatest deliberative body,” as the Senate pretentiously calls itself, no longer feel any obligation even to provide legible copies of complex legislation. The chicken scratches scribbled on the margins of their tax giveaway signed away any legitimacy these politicians can claim for their political project.

And deficits? Ah, deficits. They matter not a whit when there is money to pass out to corporations, rich heirs, private jet owners and the beer lobby represented by the son of one of our fine senators. But deficits will matter again soon, when Republicans will insist that they have no choice but to slash programs for the elderly, the sick and the poor.

One salutary outcome of this episode is that Trump showed how nonsensical were the widely repeated assertions that he was outside the Republican mainstream. We now know he is just a flamboyantly clownish and unconscionably mean version of an old-fashioned corporate conservative.

There is not an authentically populist bone in this billionaire’s body. He regularly demonstrates his utter contempt for working people by treating them as rubes. He seems to think that racist gestures and malicious comments about immigrants and Muslims will distract working-class voters from how far he is tilting government away from their interests and toward those of his family and his rich friends.

Trump and his party will learn how many of the Americans they are taking for granted are much smarter than this and know when someone is selling them out — because, sadly, it’s something they are familiar with.

* * *

The president’s populist mask is slipping at the very moment when he most needs to rally the troops.

* * *

But don’t count on Republican politicians abandoning Trump quickly now that their tax victory is in sight. They and the president have a lot more in common than either side wants to admit. The primary loyalty they share is not to God or country or republican virtue. It is to the private accumulation of money, and this is a bond not easily broken.

These lickspittle servants of the GOP are doing the bidding of multi-national corporations and plutocrats for an Oligarchy. This is class warfare writ large.

Warren Buffett, the Oracle of Omaha, warned us more than a decade ago, In Class Warfare, Guess Which Class Is Winning: “There’s class warfare, all right,” Mr. Buffett said, “but it’s my class, the rich class, that’s making war, and we’re winning.”

Damned fool Americans have yet to learn their lesson.

9 Responses to ‘A Republican Party whose only purpose is to comfort the already extremely comfortable’

  1. Chuck Grassley, born in 1933, Republican Senator from Iowa since 1981…

    The Hill
    @thehill
    Grassley: Repealing estate tax rewards people who don’t spend “every darn penny” on booze and women (link: http://hill.cm/ZjANl4h) hill.cm/ZjANl4h

    8:29 PM · Dec 3, 2017

    • Excellent comment…

      Ronald Brownstein
      @RonBrownstein

      This tax bill is the coalition of restoration taking aim at the coalition of transformation: in different ways it targets urban residents, blue-states, college & grad students, Millennials-all groups central to the D coalition. It’s an enemies list as much as a revenue bill

      7:03 AM · Dec 2, 2017

    • In every photo with his mouth open, Grassley looks like a braying jackass.

      He’s just another party over country hack who deserves to spend eternity in hell for helping McConnell steal Merrick Garland’s Supreme Court seat. And for what? To put a horrible ideologically driven excuse of a human being there instead.

      • Yeah, the GOP Senators, all of the GOP for that matter, make me wish there really were an afterlife and a place like hell for them to burn in.

        I think Grassley is particularly offensive because he’s been doing this for so long.

        • And yet Iowans keep sending the hack back to represent his corporate donors. Part of the blame lies with the DSCC who promoted Conservadem Patty Judge to oppose him. And she got stomped 60% to 35%

          The Democratic Establishment will never learn that if you run Republican Lite against a real Republican the real one wins nearly every time. Yes, that’s a shopworn cliche but one that has a lot of truth behind it.

    • Trump this AM…

      Donald J. Trump‏Verified account
      @realDonaldTrump
      2h2 hours ago

      With the great vote on Cutting Taxes, this could be a big day for the Stock Market – and YOU!

      Donald J. Trump‏Verified account
      @realDonaldTrump
      2h2 hours ago

      Putting Pelosi/Schumer Liberal Puppet Jones into office in Alabama would hurt our great Republican Agenda of low on taxes, tough on crime, strong on military and borders…& so much more. Look at your 401-k’s since Election. Highest Stock Market EVER! Jobs are roaring back!

      Donald J. Trump‏Verified account
      @realDonaldTrump
      3h3 hours ago

      Democrats refusal to give even one vote for massive Tax Cuts is why we need Republican Roy Moore to win in Alabama. We need his vote on stopping crime, illegal immigration, Border Wall, Military, Pro Life, V.A., Judges 2nd Amendment and more. No to Jones, a Pelosi/Schumer Puppet!

      • I guess sexual predators have to look out for one another. An attack on one is an attack on all of them…

        • Trump is friends with Jeffrey Epstein, convicted pedophile, and spent many dinners and attended many parties at his house.

          “Several years ago, Donald Trump told New York magazine, “I’ve known Jeff for fifteen years. Terrific guy. He’s a lot of fun to be with. It is even said that he likes beautiful women as much as I do, and many of them are on the younger side. No doubt about it”.

          And here’s some fun details about what a straight up pervert Trump is:

          http://www.rollingstone.com/politics/features/timeline-of-trumps-creepiness-while-he-owned-miss-universe-w444634

          There is also a woman who has filed to sue Trump 2 times because she says he raped her when she was 13, but she keeps dropping the case.

          This is the modern GOP. Pussy grabbing child-f***er’s.

          • OMG, that Rolling Stone article. I know so little about Trump’s history and the more I learn the worse it gets.

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