Nel's New Day

April 26, 2017

Announcement of Tax ‘Reform’ (aka Tax Cuts for Wealthy) to Cover for Flynn, Trumpcare

Almost all the news today has been about the new tax plan from Dictator Donald Trump (DDT). The time is probably to divert media coverage from the scandal surrounding DDT’s former National Security Adviser, Michael Flynn, and the struggles of the new Trumpcare health plan that he said would pass the House today. At this time, the conservative Freedom Caucus is on board with Trumpcare because it removes healthcare from many people, but the moderates haven’t confirmed that they will vote for it yet. House Speaker Paul Ryan (R-WI) has enough trouble figuring out how to keep the government open past Friday without passing the budget that has not even been considered.

Retired Army Col. Lawrence Wilkerson, chief of staff to Secretary of State Colin Powell under George W. Bush, said that Flynn is either “one of the dumbest individuals who’s ever lived or … he really had some nefarious purposes.” Even GOP Rep. Jason Chaffetz (R-UT), chair of the Oversight Committee, admitted that Flynn might not have complied with the law, but he blamed former President Obama after DDT refuses to reveal any documents about vetting, hiring, and dismissing Flynn for his 24-day tenure with the current White House administration. Flynn became the Director of the Defense Intelligence Agency in 2012 but left in 2014, over a year before he took the undisclosed payment from Russia’s state-owned news agency, Russia Today, in December 2015. Chaffetz has said that he won’t be running for re-election in 2018 and that he may resign from Congress before that.

By “nefarious purposes,” Wilkerson wrote that he meant activities ranging from “taking money for influencing your government on behalf of another government, to using your influence with the President and his cabinet on an issue for another government whom you are privately advising, even if pro bono. “The $33,000 that Flynn received for a speaking engagement in December 2015 was not on his application. Chaffetz said.

“I see no evidence or no data to support the notion that Gen. Flynn complied with the law. He was supposed to seek permission and receive permission from both the secretary of state and the secretary of the Army prior to traveling to Russia to not only accept that payment, but to engage in that activity.”

Rep. Elijah Cummings (D-MD), top minority member on the Oversight Committee, said that Flynn’s negligence on his SF86 forms could be punished by up to five years in prison but that decision was not up to the congressional committee. Flynn’s secret conversations with Russia’s ambassador to the U.S., Sergey Kislyak, is being investigated by the House Intelligence Committee, which Chaffetz said would take the lead on examining whether those contacts themselves were inappropriate. Last month, he asked for immunity in exchange for immunity from prosecution, but neither committee has accepted his offer.

Another high official, DDT’s son-in-law Jared Kushner, has also filed applications with omissions such as dozens of foreign contacts, including those with Kislyak and Russian bank CEO Sergey Gorkov in December. Rep. Ted Lieu (D-CA) tweeted earlier this week:

“Dear Jared Kushner: Lying on the SF-86 security clearance form is a crime. Michael Flynn hired a lawyer. You may also want to hire a lawyer.”

Back to the tax plan. Here it is—all 226 words, including the title:

 

2017 Tax Reform for Economic Growth and American Jobs

The Biggest Individual And Business Tax Cut in American History

Goals for Tax Reform

  • Grow the economy and create millions of jobs
  • Simplify our burdensome tax code
  • Provide tax relief to American families—especially middle-income families
  • Lower the business tax rate from one of the highest in the world to one of the lowest
  • Individual Reform

Tax relief for American families, especially middle-income families:

  • Reducing the 7 tax brackets to 3 tax brackets for 10%, 25% and 35%
  • Doubling the standard deduction
  • Providing tax relief for families with child and dependent care expenses

Simplification:

  • Eliminate targeted tax breaks that mainly benefit the wealthiest taxpayers.
  • Protect the home ownership and charitable gift tax deductions.
  • Repeal the Alternative Minimum Tax.
  • Repeal the death tax.
  • Repeal the 3.8% Obamacare tax that hits small businesses and investment income.

Business Reform:

  • 15% business tax rate
  • Territorial tax system to level the playing field for American companies
  • One-time tax on trillions of dollars held overseas
  • Eliminate tax breaks for special interests

Process:

Throughout the month of May, the Trump administration will hold listening sessions with stakeholders to receive their input and will continue working with the House and Senate to develop the details of a plan that provides massive tax relief, creates jobs, and makes America more competitive — and can pass both chambers.

 

Treasury Secretary Steve Mnuchin claimed that 100 people in his department worked on the tax plan, making it about two words per person. Lily Batchelder, former chief tax counsel of the Senate Finance committee, tweeted that the plan was “immensely costly and regressive.”

Benefitting from DDT’s plan are the popular “pass-through entities,” 94 percent of all companies in the nation by 2011, that distribute profits among owners instead of paying corporate taxes. Owners then have these profits taxed as normal income. This organization is popular not only with small companies but also highly profitable ones such as major law firms, hedge funds, and real estate developers. The Trump Organization is a pass-through that would greatly benefit from DDT’s plan, as would all his friends. At this time, 70 percent of income from these corporations goes to the top one percent of people in the nation. Today, Mnuchin said that the new 15-percent rate would be only for small and medium-sized businesses with no definition of “medium.” A business worth $5 million is considered “small.” The plan would allow high-wage workers into pass-through entities by setting themselves up as S corporations to “sell” their freelance services.

A comparison to DDT’s tax plan is Gov. Sam Brownback’s 2012 tax cuts in Kansas which ended up being a monumental failure. The state’s credit rating has been downgraded and suffers from an ongoing budget crisis, including horrific cuts in such vital areas as education, from a $1.1 billion shortfall. The GOP is now rebelling against the governor, voting to undo the cuts and almost overruling Brownback’s veto. When Kansas completely exempted pass-through profits from state income tax, a large number of people filed for the break, but few new jobs were created. In 2016, Kansas had the fifth worst employment growth in the nation, and its economy has grown at half the national rate. The state’s credit rating has been downgraded and suffers from an ongoing budget crisis, including horrific cuts in such vital areas as education, from a $1.1 billion shortfall. The GOP is now rebelling against the governor, voting to undo the cuts and almost overruling Brownback’s veto.

Research showed that the Kansas plan, now proposed for the United States, merely encourages people to play the system. DDT’s system could take 20 percent from their taxes According to the conservative Tax Foundation, dropping the rate to 15 percent would reduce government revenue by $2 trillion over a decade, or about 5 percent. Allowing pass-throughs to pay the lower rate would add another $1.5 trillion loss of revenue to the country. DDT claims that his plan will increase economic growth. Alan Cole, a staff economist for the Tax Foundation, stated that the country’s annual growth rate could add about 0.12 percent, which, he said, isn’t a good trade for a cost of $1.5 trillion. “This would be Kansas on steroids,” Eric Toder, co-director of the Tax Policy Center, said about DDT’s plan.

Without looking at DDT’s tax returns, we can almost guarantee that he would vastly benefit from his tax plan. He reports owning more than 200 LLCs, and his approximately 500 businesses are almost all pass-throughs. So much for his promises of helping the “little guys.”

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