After being steamrolled in the negotiations surrounding Obamacare repeal, House Republican moderates appear poised to be run over once more—and perhaps, a final time—as momentum grows behind a revived version of the repeal bill.
Their rival faction, the House Freedom Caucus, has backed the newest form of the legislation having received another round of concessions. That means the pressure is on the conference’s centrist wing to fall in line, despite having gained little throughout the negotiation process.
The Washington Post commentators have a few columns up today on the tax reform "proposal" by Trump. It seems like if the health care debacle was bad for supposed moderates, it's not gonna get better when the debate shifts to tax reform.
Catherine Rampell has the most complete take down. There's lots of good stuff, but I'll just note her explanation of pass-though income since this seems to be an egregious evil inherent in the plan.
(P)ass-through income refers to business income that gets paid at individual income tax rates rather than corporate ones. Income earned by partnerships, sole proprietorships and S-corporations — the vast majority of all companies — falls into this category.
Lots of people, including White House officials, associate pass-through entities with small businesses. But plenty of ginormous companies get taxed this way, including hedge funds, big law firms, publicly traded partnerships and even — coincidentally? — the Trump Organization. In fact, according to the Treasury Department, more than 80 cents of every dollar earned by pass-throughs come from big firms (defined as companies with more than $10 million in income).
Soon we will all be Kansas.
In 2012, the state undertook a huge suite of tax cuts, including eliminating taxes on pass-through income. That overhaul, too, was supposed to “pay for itself.”
Instead, many more people took advantage of the loophole than expected, the state economy and tax receipts slowed to a crawl, and a gaping budget hole forced legislators to close schools early. The state’s credit rating has been downgraded multiple times.
Eugene Robinson with my favorite lie about the plan.
“The plan will pay for itself with growth,” Treasury Secretary Steven Mnuchin said. His rosy projection is that increased growth would produce $2 trillion in new revenue over 10 years. But the Tax Policy Center, a joint venture of the Urban Institute and the Brookings Institution, estimates the tax cuts would cost $6.2 trillion in revenue during that same period, leaving a $4 trillion gap. Even the conservative Tax Foundation, which has rarely seen a tax cut it didn’t like, foresees a $2 trillion gap.
Max Ehrenfreund with another great lie from Steve Mnuchin.
Pitching the plan on Wednesday evening, Treasury Secretary Steven T. Mnuchin said again it will not cut taxes on the rich overall: “Effectively, the effective tax rate will not be a reduction for the rich,” Mnuchin told Tucker Carlson. “This is really about a middle-income tax cut.”
But experts on taxation who have reviewed Trump's ideas say the wealthy would enjoy the greatest benefits, with uneven and uncertain savings for ordinary households.
The broad outline was generally similar to a proposal that Trump had put forward as a candidate, which the nonpartisan Tax Policy Center estimated would save a typical taxpayer in the richest 1 percent of households $317,000 a year. That amounts to 14.1 percent of the annual income of a typical household in that rarefied group. By contrast, typical households with middling income would save about $1,100 a year on average, which translates to only 1.5 percent of their yearly income.
Meanwhile, some could even pay more, especially single parents and large families. Trump's plan would eliminate certain provisions that currently work to these groups' advantage.
What's with the tax brackets being 10, 25 and 35%? Does that seem a little odd? Those just happened to be the best numbers?