What do rich people want?
The Republican Party is trying madly to lower taxes for its base. For coal miners and factory workers and for you and me, you’re guessing.
“Don’t be silly,” as my grandmother used to say. No, they are scrambling to slash taxes on the already too richly redundantly rich for words.
Sure, you and I might get a pittance — that is, if they don’t snatch away federal tax deductions for our mortgage interest, sky-high medical bills, student loan interest, state and local taxes, our personal exemption; or if they don’t lower our 401K contribution limits and eviscerate the Affordable Care Act.
If we dodge all those bullets, the potential trifle that “we the little people” might get will be so much sleight of hand, as when a magician grandly waves one hand before the audience while performing the trick with the other.
Under Republican proposals business taxes will drop from 35 percent to 20 percent (among other generous perks), but you and I won’t see reductions anything close to that. In another base move, Republican leaders want to kill the “death tax.”
I don’t know about you, but I don’t give the federal estate tax a second thought, or a first one either. Currently, my wife and I would have to have a net worth of nearly $11 million to commence worrying — the exemption is nearly $5.5 million for a single person. We may get there some day, assuming we keep working until we’re 999 years old. I’ll bet many Republican leaders in the Congress and their mega-rich donors are there already.
So what do we care if business people make out way better and rich people can pass on, in aggregate, another $20 billion more each year to their surviving Little Lord Fauntleroys? Besides, $20 billion is chickenfeed down D.C. way, insist “tax reformers” in justifying the giveaway.
Based on that pristine logic, I can stop paying my taxes right now and apply for a refund for the past 50 years. My annual taxes don’t even pay for the federal subsidy a typical Congress person gets each year for her health care. In case you didn’t know it, our taxes pay for 72 percent of our esteemed leaders’ premiums under Obamacare.
The reason we should care about what these Congressional welfare kings and queens are up to is because they are selling us a passel of hooey— because those tax-dodging chickens will eventually come home to roost on our shoulders, either through cuts to programs and higher taxes when the deficit blows up like Snoopy at a Thanksgiving Day parade.
Not so, say Republican Brahmans. They insist that lower taxes for their rich friends will kick the economy into another gear, increase taxes revenues, and that some of that largess will trickle down to us —like scraps falling off an earl’s table.
This was voodoo economics in the 1980s under President Ronald Reagan; ditto under George W. Bush in the 2000s, and double ditto in Kansas five years ago. Tax cuts don’t pay for themselves; they spell higher budget deficits. And the people who will make out way better under the various Republican schemes are the ones who are doing swimmingly already.
Case in point: take our sitting president (please!) and the Alternative Minimum Tax, which was passed in 1969 to prevent rich people like him from paying next to nothing in taxes. The Republicans want to get rid of the AMT, of course. Had the law been repealed in 2005, the only year for which our president’s tax records are public, he would have saved himself a cool $31 million in that year alone.
Or consider the retention in the Republican plans of the so-called carried interest provision that allows just plain folks like hedge fund managers and real estate investors (like guess who) to pay the lower capital gains rate on their income (close to 20 percent) as opposed to the ordinary income rates (the top one being 39.6 percent).
On the campaign trail, the president vowed he would close this loophole, but perhaps his Treasury Secretary Steven Mnuchin, a former hedge fund manager and current swamp thing, talked him out of it.
Is this whole “tax reform” hocus pocus coming into focus? Not to mention the reason the president won’t release his tax returns, as all presidential candidates have done for decades?
All of which leads to this existential question: What exactly do rich people want?
Maybe it’s more better clothes. Paul Manafort, our president’s former campaign chairman who is under indictment for laundering millions, spent approximately $1.3 million on duds in just two shopping sprees, one in the Big Apple and the other in Beverley Hills. He reportedly shops in Moscow, too.
If you believe in Tinker Bell —and that Paul Manafort needs a tax cut— clap your hands.
David Holahan is a freelance writer who lives in East Haddam.
Sign up for CT Mirror's free daily news summary.
Free to Read. Not Free to Produce.
The Connecticut Mirror is a nonprofit newsroom. 90% of our revenue comes from people like you. If you value our reporting please consider making a donation. You'll enjoy reading CT Mirror even more knowing you helped make it happen.YES, I'LL DONATE TODAY