XPost: alt.tv.pol-incorrect, alt.politics.usa, alt.fan.rush-limbaugh
XPost: alt.politics.republicans, us.taxes

: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.


--
Dems & the media want Trump to be more like Obama, but then he'd
have to audit liberals & wire tap reporters' phones.

--- SoupGate-Win32 v1.05
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