TRUMP TAX REFORM CORPORATE TAX CUT INDIVIDUALS GET CHUMP CHANGE
Trump should change his name to Donald Pelosi! Every time Trump makes a “Really Really Big Announcement” its a letdown. HIS Tax reform just like his now invisible fence is typical TRUMP… a lot of noise with very little substance. Trump is under the illusion that Corporations in American are holding billions offshore so they don’t have to pay the US Corporate Tax of 35%. The simple truth is that any corporation paying 35% in tax in the first place is mismanaged. Many US multinationals are global because they are reaching out into larger markets. General Electric for example gets most of its business from emerging markets. Other companies such as the large US Coal corporations, bankrupted thanks to Obama, had to move offshore just to stay in business. Trump has peculiar beliefs about businesses and tax which simply are ridiculous.
The broad strokes will look interesting on paper:
Trump is proposing a three bracket tax at 10 percent, 25 percent and 35 percent. For corporations he is proposing a 15% corporate income tax and lower taxes for small businesses that are mom and pop types that could pay personal rates not to exceed 15%.
I would have preferred 10%, 15% and 25%. Lowering the top tax eliminates the cost incentive of tax sheltering. 35% is too steep and those with larger incomes will still attempt to use the tax code to their significant advantage.
Trump also eliminates the State Tax Deductions. It’s about time! This has created more abuse from States than can be comprehended especially in places like Florida. Let me give you an example.
In Florida Doctors are taxed a special tax known as NICA. This tax is nothing but an insurance scheme so that hospitals and OBGYN’s don’t have to pay malpractice claims on children who are severely birth injured. Those children are deprived of their day in court. The odd thing about this tax is all Doctors have to pay it not OBGYNs. But but but… the doctors can write this tax off against their Federal Income Taxes.
Thus, Florida, a Jeb Bush style Republican State sets up this tax in this way so that the ultimate payer of this NICA tax scheme IS YOU, the Federal Tax Payer.
This is known as burden shifting taxes and Florida is notorious for doing it. California is the worst abuser with its myriad of state tax schemes and liberal misadventures passed on to the Federal taxpayer.
The same thing applies to State Income Taxes and property taxes. The welder in Indiana and the farmer in Kansas is paying for some hedge fund operative’s oceanfront property tax in the Hamptons. These are deductible against Federal Income taxes in most instances. All these burden shifting tax schemes have cost the Federal Government Trillions in collections. All these tax shifting schemes should have been eliminated long ago. This is the basis of the rich bilking the rest of the citizens of this country.
The welder in Indiana and the Farmer in Kansas are paying Nancy Pelosi’s California Income taxes and the property tax on her $50 million Napa Valley Vineyard!
You citizens should be infuriated but instead you have your dumb heads buried in the sand while the wealthy tear you to pieces with these schemes.
IN the case of that Florida NICA tax, this is a scheme that violates the State Constitutions of most states because it is an Unconstitutional Cap on Medical malpractice. YET the Federal Taxpayer in all states where this scheme would be flatly unconstitutional are picking up the cost of this tax and paying for the funding of NICA!
This tax prevents children or their parents from bringing a medical malpractice claim against Hospitals and Doctors that brain injure an otherwise healthy fetus during the birthing process. If the child is dropped on their head during delivery and brain injured, they lose their Constitutional Right to bring any claim to a Florida Court. This is truly filthy business and the Federal Taxpayer pays for all of it. This is morally reprehensible. This entire system of tax burden shifting by the States should be declared UNCONSTITUTIONAL! There is no reason whatsoever that a Taxpaying citizen should be picking up Pelosi’s property taxes and California State Income tax or depriving the most innocent child severely brain injured through medical malpractice from having redress for their injuries in Court. It is pathetic and immoral.
Will this Trump scheme work?
That’s the trillion dollar question. It will certainly work for the Federal Government only by closing the state tax loophole by removing all State Tax deductions. Be aware that Trump’s tax doesn’t increase the tax base because Trump also proposes a $25000 standard deduction for single payers and $50,000 for married. We think Marriage deduction advantages should be completely eliminated. This is the IRS ruse that resulted in same sex marriage claims in the Federal Court and the adoption of the scourge of same sex marriage as the new Marital status. IRS rules were the lynch pin used by gay couples to push same sex marriage down everyone’s throat. They should never have had any rules favoring married couples. There should be no reason to favor one person over another with marriage status. Its just bad policy.
What happens to the states if they can’t shift the burden of the taxes they write onto the Federal Taxpayer?
For one thing Pelosi is going to have to pay her own property taxes and state income taxes, not you. States better tighten their belts and get ready for some Tax Revolts. States such as New Jersey that pay the highest property taxes are in for trouble. California is beyond repair. Rest assured they will scream bloody murder and lobby to keep citizen’s paying for the property tax of the Oceanfront homes of the rich.
Most Republican states have State Constitutions that demand a balanced budget. Blue States generally don’t. It is very likely that Blue States will undergo taxpayer revolts that result in a balanced budget amendments. It is also likely that these states will turn more Republican, if not overtly red as they near bankruptcy.
While this Tax proposal would eliminate burden shifting loopholes, it doesn’t increase the tax base nor does it control Government spending.
All it does is reign in State Tax abuse. The details have been left blank so by the time Lobbyists get through with this there will be a thousand exemptions and exclusions.
Not that Trump is a bit of a crook but… This is a help himself Tax Cut!
His companies more than most will benefit from a reduction in US Corporate Income Tax. That is the structure of the rental and resort business. Since taking the Presidency, Trump has funneled millions of dollars of Taxpayer money into Trump Tower’s and Mar-a-Lago. Those state dinners at Mar-a-Lago are paid for by Taxpayers and there is no contract or bidding involved. Mar-a-Lago can pretty much charge what it wants. Same thing applies to the office rentals in Trump Towers being used for Government activities and lobbyists. Trump has these new federal government income streams so he needs some additional tax relief. His bill gives him that.
By reducing Corporate tax by 20%, Trump’s low margin non-expanding business benefits by being more profitable. Nobody for a minute thinks that the marvelous Trump Kids are capable business builders. They go on Safari and kills zoos for dinner.
Does Trump’s plan really add Trillions to the debt?
Corporation Tax only contributes about 11% of the total tax revenue collected. If Trump reduces the corporate tax rate to 15% that is a 66% tax cut. That creates a shortfall in tax collections of about 6.4%. Unless the government reduces spending by 6.4% the result is more deficits. Unless Trump recovers that amount from closing loopholes, its a bust. Remember that Trump already has a 10 Trillion built in additional debt for his White House stay even if he doesn’t spend an additional dime. Thus just doing the fast math, Trump’s tax plan with out reduced spending will result in an additional national debt of $15 trillion dollars. Ouch!
Here is the fantasy… Trump claims Corporations will expand business operations, make more money and ultimately pay more in tax.
That idea is fantasy. There is no incentive for a corporation to expand and expense off income especially in America if rates are lower. I personal don’t think corporations should have ever been taxed in the first place but the 16th Amendment made that happen. Democrats thought of that concept and as you will learn, it is you, the taxpayer persons that pays that tax. In passing the 16th Amendment, Democrats installed a structure of management that views shareholder owners as fertilizer. In the past all profits and depreciation had to go to the shareholders. Democrats destroyed the chief machinery of wealth creation when they taxed corporations. But Trump is still taxing them!
Now under the present system dividends are optional. Present corporations are essentially state run businesses answering to nobody but the government. But you pay for it. Government wants their money first so they set up Tax Rules on how a company may expense off income. These are state run businesses. Further the Government gets fully immersed in hiring practices, workplace safety etc and more taxes with FICA and Social Security. These are government controlled businesses. And you pay for all of it. Doubt that? Stay tuned.
There are two absolute rules of Tax Reform to make it work:
- You must increase the tax base.
- You must limit government spending to 10% of the GDP.
What we have here in the Trump plan is the opposite. Trump’s tax base doesn’t expand. It contracts. So the shortfall will have to come from someplace. Politicians will push that out in front of citizens in the form of debt. Everyone with a dollar bill in their pocket gets taxed. Those were the borrow and spend George Bush Tax cuts. Bush Republicans spent like insane liberals. Why not… RINOs are after all nothing but Liberal Lites favoring Corporate Welfare over Shufflefoot Welfare. But you Americans pay for all of it. Remember that! No free lunch!
The second problem is that Trump wants to increase the Budget to over 4 Trillion with two trillion plus in new spending.
His idea is brick and mortar infrastructure. This is akin to state run building projects. This is exactly why Japan has been in a 30 plus year recession with no way out. Trump’s infrastructure plan is identical to the way liberals think. In spite of the endless examples that such government projects always fail and always increase the debt [backdoor taxation], Trump pushes it. Look at all the Pelosi Trains lavished on States by the Liberals following the Great Recession. Not one project is solvent. They are all debt ridden corrupt Government boondoggles. States now have to pick up the shortfalls.
Trump’s Free Lunch Myth:
Without spending discipline SOMEBODY PAYS and that SOMEBODY IS ALWAYS the People. Trump wants to cut Corp taxes and increase spending. The people will always pay more. Trump tax cuts are smoke and mirrors. He reduces corporate tax but everyone else pays for it just the same as they paid for it before. Trump learned nothing at Wharton. Yet he claims he is a tax expert. He’s clueless.
True tax relief is the recognition that the people pay all taxes PERIOD. Secondly, Debt is TAXATION! Printing and spending is TAXATION.
Tax reform must increase the base and reduce Government Spending.
Trump is shrinking the base and increasing spending. He is simply Tax ignorant! He is just making the whole system worse. You the citizen will pay for all this rubbish and fill up the Trump Kids Trust fund. Trump is a grifter shifting the game to his advantage while you pay for it all. You have to know that if Goldman is behind it, it can’t possibly be good for the individual and ultimately you will pay more.
Be sure you understand this. More debt is more taxation. This will increase the tax base by making your dollars even more worthless. Since 1913 when the Federal Reserve took over control of the US Dollar. The value of the dollar in present day terms has dropped a whooping 95%. That is government taxation over the last 100 years. A 1913 dollar has lots 95% of its buying power. The Government steals from everyone each and every day of your life. Even if you paid no taxes, the tax was extracted from the buying power of the dollars in your pocket. It is a pickpocket stealth tax.
Hey Trump… There is no free lunch except for the thief.
One word about Paul Ryan who is already in opposition to the Trump Plan.
Ryan wants a BAT tax which is 20% tax on all imports. The Ryan game is to give meaningless chump change to the middle class while making the upper middle class pay more. Ryan’s idea is to increase everyone’s taxes and then pretend to give them a chump change tax refund. That’s Bush all over again.
I find it amusing that Ryan has tried to cultivate the idea he is a tax policy expert. He knows nothing about it. Listen to Milton Friedman. You… the individual pay ALL THE TAX whether you know it on not. These stealth taxes like making your car tires 20% more costly is a TAX and you pay it.
A tax like this certainly increases the tax base because the USA doesn’t make consumer products anymore. So if you buy a smartphone, you are paying Ryan’s BAT tax! Consumers go to slaughter under Ryan’s plan. America’s largest export is weapon systems!
RYAN MUST BE DUMPED.
The Fiasco of RINOCARE 1 and 2 is Paul Ryan is enough. Both are endorsements of Obamacare NOT REPEAL measures. Click here for more. Everything Ryan touches turns to garbage and Trump is not bright enough to know the difference.