WEB Notes: Why would we expect anything different? Cutting the corporate tax is a good thing, but not if CEOs are going to pad their pockets and send more of our jobs offshore. If there was no provision for this in the tax cut, then it was worthless to us and simply benefits Wall Street. But then again, what did you really expect?
The tax bill moving its way through Congress is routinely referred to as a $1.5 trillion tax cut. And, in some ways, that’s true: on net, it would reduce the amount of taxes collected by the federal treasury by about $1.5 trillion over 10 years.
But that figure masks the eye-popping scale and audacity of the GOP’s rushed restructuring of the economy. Most immediately, the plan will take a large chunk out of state and local revenue that isn’t factored into that total. But more broadly, the bill cuts taxes by a full $6 trillion over a decade.
Where’s that money going?
The Tax Policy Center estimated that about 80 percent of the benefit of the tax plan will go to the top 1 percent, who will enjoy the following elements of the tax cut:
A full $1.5 trillion alone is going to slash the corporate tax rate. CEOs have said repeatedly they plan to pocket that money rather than invest it or give workers higher wages.
The alternative minimum tax, paid almost exclusively by the rich, is also eliminated. That’s a $700 billion giveaway.
Another $150 billion goes to repealing the estate tax, which currently exempts the first $11 million of the deceased’s estate, so nobody even remotely middle class pays it. The repeal benefits so few people you can practically list them out.
More than $200 billion in cuts goes to a provision that allows a greater deduction for dividends on foreign earnings. That’s not for you.
Roughly $600 billion goes to reducing taxes on “pass-throughs” and other businesses not set up as corporations, which law firms, lobby shops, and doctors’ offices often benefit from. Poor and middle-class people do not tend to set themselves up as pass-throughs.
Under current law, many tax credits phase out at low-income thresholds. The GOP plan changes that by raising the threshold so richer people can also claim the credit. That provision alone is, by definition, a $200 billion tax cut for the wealthy.