Category Archives: Taxes

Trump’s Tax Plan Will Cost A Lot More Than Advertised

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If the Trump-GOP tax plan doesn’t stink, why are they lying about the cost?

House Republicans and Donald Trump are ballyhooing the wonders of their new tax plan. It’s called the “Tax Cuts and Jobs Act,” which we’re told will mean “More Jobs, Fairer Taxes, and Bigger Paychecks.”

Hallelujah! We can see the Promised Land!

But before we pop the champagne corks, let’s double-check the sticker price: $1.5 trillion over the next decade. That’s just shy of $5,000 for every man, woman and child in America. For a nation over $20 trillion in debt, that seems pricey.

But that’s only the beginning. The deeper costs of their tax plan are so large and so obvious that the failure of Republican leaders to disclose them is, for all practical purposes, a lie. Continue reading

The real ‘trickle down’ effect of the GOP tax bill: state and local government taxes

State officials worry that all the economic progress in recovering from the Great Recession is about to be undercut by the $1.5 trillion Republican tax plan sailing through Congress. The New York Times reports, States Warn of Budget Crunch Under Republican Tax Plan:

While lawmakers say the plan will boost growth and strengthen the economy, Oregon state officials say the bill could have the opposite effect by making the state a less affordable place to live and putting a squeeze on state and local budgets.

“What I am concerned about is that this will impede our forward momentum,” Gov. Kate Brown of Oregon said in an interview. “This tax plan will basically burst the balloon that’s happening here.”

Oregon is not alone in its concerns. State and local officials in other high-tax, largely blue states like New York, New Jersey and California are warning the tax plan will strain budgets, shake real estate markets and prompt residents to flee expensive coastal states for places with lower taxes.

Of primary concern is the Senate’s plan to repeal the state and local tax deduction, which currently allows people who itemize their tax returns to deduct state and local income, sales and property taxes paid. The tax break is claimed by people across the nation, but is more heavily utilized in higher-tax states like Oregon, California, New Jersey and New York. Eliminating the deduction has long been a goal of many Republican lawmakers, who view the tax break as a subsidy that poorer red states provide to richer blue ones that spend heavily on government services.

This is misleading. Poorer red states (recipients) are more financially dependent upon the federal government than richer blue states (donors), they get back more in federal dollars than they pay in taxes. See WalletHub’s 2017’s Most & Least Federally Dependent States.

Most Federally Dependent States

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Arizona ranks number 11 among most federally dependent states.

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GOP’s regressive tax bill worse than you imagined

You may have missed this over your Thanksgiving holiday, but Greg Sargent of the Washington Post has an important analysis about the GOP’s regressive tax bill. The Trump tax plan is much worse than you thought. A new analysis confirms it.:

The fate of the Senate GOP tax plan now rests in the hands of a few undecided Republican senators, and next week, they will make up their minds. But a new nonpartisan analysis of the plan will make it much, much harder for them to embrace it — or at least it should, if their stated principles mean anything at all.

Here is the key takeaway from the new analysis, which is the work of the Tax Policy Center: By 2027, around 50 percent of taxpayers will see a tax hike. The whole purpose of this tax increase is to make it possible for Senate Republicans to pass a tax cut that overwhelmingly benefits the very wealthiest taxpayers — on party lines, without any Democrats.

Using the data from the TPC’s analysis, I’ve created two charts that boil down the story of the Senate tax bill. The first chart details the average tax change for each major income group, by year, if the Senate plan becomes law, in dollars:

TaxPolicyCenter

This shows that in certain respects, the plan actually gets more regressive over time. The tax cuts for the four lower-income quintiles basically shrivel up and disappear by 2027, with the two lowest quintiles ultimately seeing either a tax hike or no change, while the middle and fourth see the tax cut dwindle away to almost nothing. By contrast, in 2027, the top one percent sees an average tax cut of more than $30,000, and the top 0.1 percent sees an average tax cut of more than $200,000 — more than double what it was in 2019, and a good deal more than it was in 2025.

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Suffer the Children: Congress jeopardizes CHIP funding

It has been almost two months now since Congress allowed the Children’s Health Insurance Program (CHIP) to expire at the end of September.

As Joan McCarter at Daily Kos recently noted:

This is unprecedented. It’s obscene and unconscionable. Never before has Congress allowed funding for children’s health and community health center expire—even when they were playing games with debt ceilings and government shutdowns, Republicans funded health care for kids and for the underserved. Not this year, not when they have tax cuts for rich people and corporations to focus on.

When last we visited this controversy, Tea-Publicans in Congress were holding CHIP funding hostage as leverage in their never-ending sabotage of “Obamacare.”

Earlier this month, House Passes Children’s Health Insurance Bill, But Kids Are No Closer To Health Insurance:

The House passed a bill Friday reauthorizing the lapsed Children’s Health Insurance Program. But instead of a bipartisan affair that Democrats and Republicans could pat themselves on the back for, the bill became a partisan fight over offsets that ultimately moves Congress further away from renewing CHIP.

The bill that passed Friday 242-174 ― with 227 Republicans and 15 Democrats voting yes, and 171 Democrats and 3 Republicans voting no ― almost certainly won’t become law. Instead, Congress will likely wait for an end-of-the-year spending bill to reauthorize the program, which covers roughly 9 million low-income children and pregnant women.

According to Democrats, the problem with the bill, which would extend CHIP for five years and reauthorize community health centers and other public health programs for two years, is that it would pay for children’s health insurance by taking money from a preventive care fund. The GOP bill would also use new Medicare means-testing to partially pay for CHIP.

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BfAZ Readers: Please Sign on to My Petition to Senator Flake

Readers:

I’ve started a petition addressed to Senator Flake regarding the Senate Tax Plan.

I’ll start with the first few paragraphs here, followed by a link to read the rest and sign.

Dear Senator Flake:

Your political beliefs do not line up with those of all your constituents. Many of us disagree with your votes far more often than we agree.

But we all respect you. We’ve always felt your votes, and your words, reflected your principles, not the dictate of some donor or a cynical political calculation.

So we’re not surprised to read that you are taking a hard look at the Senate tax bill and have concerns about its fiscal impact. We salute you for doing so.

As you consider your vote, we urge you to consider what the real cost of this tax plan will be. The sticker price, $1.5 trillion, is huge, but undoubtedly is a gross understatement. Here are a few of the areas you might want to explore on that front:

Read Remainder of Letter and Sign at Change.org

If you agree with me on this, please post a link to your Facebook page or Twitter feed. Thanks, Bob

GOP resorts to lying about its tax bill (part two)

Economist and New York Times columnist Paul Krugman hascbeen on fire the past couple of weeks exposing the lies of the GOP tax bills. Last week he wrote, Everybody Hates the Trump Tax Plan and blogged Days of Greed and Desperation (excerpt):

The House tax bill is wildly regressive; the Senate bill actually raises taxes on most families, while including a special tax break for private planes. In effect, the GOP is giving middle-class Americans a giant middle finger. What’s going on?

A large part of the answer, I’d suggest, is that many Republicans now see themselves and/or their party in such dire straits that they’re no longer even trying to improve their future electoral position; instead, it’s all about grabbing as much for their big donors while they still can. Freedom’s just another word for nothing left to lose; in the GOP’s case, that means the freedom to be the party of, by, and for oligarchs they always wanted to be.

* * *

So their incentive is to stuff everything the donors want, no matter how outrageous — tax hikes on most of the population, tax breaks on private planes — through the sausage grinder right now.

I have to admit, I didn’t see this coming. And there’s a pretty good chance that this desperate grab will fail — remember, it only takes three Republican Senators with a shred of principle. But that’s where we are.

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