This tax cut presents companies with an ideal opportunity to begin allocating resources in ways that better align with the public’s priorities. Our analysis shows that, of the 90 companies that have so far announced their intentions, six percent of tax-related income is being allocated to workers, more than half of which takes the form of one-time bonuses, as opposed to permanent raises or benefits. An additional 22 percent is allocated to job creation. And if we assume that all proceeds not already earmarked for other uses actually flow to management and shareholders in the form of stock buybacks or direct distributions, then 58 percent of corporate spending will go back to investors.
Warren Buffett’s multinational conglomerate, Berkshire Hathaway, made an extra $29 billion in 2017 thanks to the Republican tax bill, the billionaire investor said in his annual letter to shareholders released on Saturday. For reference, that’s nearly half of the conglomerate’s entire net gain last year. “A large portion of our gain did not come from anything we accomplished at Berkshire,” Buffett, 87, wrote. Of the $65 billion the company made last year, $36 billion was from its operations. The rest was thanks to the GOP tax cut, passed in December, which dropped the corporate income tax rate to 21 percent from 35 percent. That the tax bill would make such an enormous difference for Berkshire Hathaway, which as of 2017 has $702 billion in total assets, is not a surprise: That is largely how it was designed.
Trump tax cuts and Trump’s budget will exacerbate U.S. budget deficits and debt and cause the central bank to raise interest rates even faster and higher. Lies and misrepresentation of facts have become the hallmark of U.S. politics in recent years more than ever before. Not just lies of commission by U.S. President Donald Trump and his crew, but lies of omission by the mainstream media as well. In Trump’s recent package of tax cuts for corporations, investors and millionaires, the lie is that the total cuts amount to US$1.5 trillion — when the actual amount is more than US$5 trillion and likely even higher. And in his most recent announcement of budget deficits the amounts admitted are barely half of the actual deficits — and consequent rise in U.S. national debt — that will occur. Even his US$1.5 trillion so-called infrastructure spending plan, that Trump promised during his 2016 election campaign, and then throughout 2017, amounts to only US$200 billion.
The Democratic Party brain trust is floating new ideas on taxes. Their economics are questionable and their politics are worse. From the heart of Barack Obama’s exiled brain trust comes Jason Furman, former head of Obama’s Council of Economic Advisers, with a proposal in the Wall Street Journal to “repeal and replace” the recent Trump/Republican tax cuts. How do his ideas compare to alternatives that might appeal to readers of this journal — not to mention the vast legions of Berniecrats and The Resistance. Furman’s analysis provides a useful window into the concerns of financial elites. To be fair, he takes aim at certain sources of tax relief for the rich, including those related to capital gains and “pass-through” entities (a form of business organization often used by medium-to-large-sized companies).
Congressional ethics laws appear to require lawmakers to recuse themselves from shaping or voting on laws that would financially benefit themselves, their family or their future employers. But Ohio Rep. Pat Tiberi accepted an offer to run a state trade organization, the Ohio Business Roundtable (BRT), while helping write the Republican tax bill. The trade group’s member companies have donated to Tiberi’s political campaigns, and many of them stand to gain from the bill, which slashed business income taxes and introduced several provisions that will benefit wealthy investors and corporate executives in various industries. He will begin the job by January 31st. International Business Times has identified 17 companies that are both members of BRT and donors to Tiberi’s 2018 campaign committee.
Progressive tax reform needs to raise enough revenue to honor our current commitments to Medicare, Medicaid, Social Security, and other social insurance programs, as well as to finance expanded public investments and income supports that ensure opportunity for all. Rising inequality and the threat of “secular stagnation” make a solid foundation for the case that this revenue should be raised progressively, as taxing wealthy households with large savings does not drag heavily on growth of aggregate demand. Net tax cuts for high-income households and corporations won’t help our demand problem. A number of specific progressive measures are available that can raise revenue, many of them included in recent years’ editions of the budget proposals forwarded by the Congressional Progressive Caucus (CPC), with some technical assistance from the Economic Policy Institute.
If you're struggling to get by on $20 million, the GOP is looking out for you and your heirs. It isn’t easy being a millionaire these days, especially if you’ve got less than $20 million. Fortunately, Congress is watching out for you. Yes, the Republican tax cut bonanza targets lower end millionaires for special relief. Now those struggling to scrape by with $15 million or $20 million can breathe more easily. And even lowly billionaires will be able to keep more of their wealth. Why? Because Congress just increased the amount of wealth exempted by the estate tax, our nation’s only levy on inherited wealth. In the bad old days, a family had to have $11 million in wealth before they were subject to the tax. This exempted the 99.8 percent of undisciplined taxpayers who, in the words of Iowa Senator Chuck Grassley, had squandered their wealth on “booze, women, and movies.”
Now that the Republicans’ brazen tax bill that the CBO predicts will add $1.4 trillion to the deficit has passed, yet again exposing “deficit concerns” by congressional Republicans as an empty marketing ploy, will those in the media who pushed the Deficit Doom narrative during the early Obama years admit they were wrong? Suddenly deficits—something Every Serious Person cared about—are a total nonissue. The Beltway orthodoxy for decades—especially in the years following the 2008 economic crash—that deficits would crush our economy and render the United States insolvent is mysteriously absent from the Republicans’ plan to increase the deficit by equivalent of the GDP of Russia.
In response to the passage of the GOP tax bill, many voices are now offering variations on the theme of "speak truth to power." It's true enough that tax overhaul, coming after 30 years of widening inequality, widens it further. It is likewise yet another exercise in trickle-down economics, the policy promise that direct economic help to corporations and the rich will eventually lift up the rest of us. The GOP and Trump conveniently disregard the countless economists who have shown that trickle-down is a false promise. However, the limitation of "speaking truth to power" is and always was that it risks leaving us with the truth and them with the power. In today's world, the GOP, Trump and the corporate leaders who sustain them have the power to treat truths as so much "fake news" or simply to ignore them as they push their agendas.
Tax experts warn the proposal prioritizes wealthiest Americans—like President Donald Trump, his billionaire cabinet, and the many millionaires in Congress—at the expense of working families with children. As opponents continue to raise alarms about the GOP tax plan being pushed by President Donald Trump and Republican lawmakers—with the House expected to vote Tuesday afternoon and the Senate later in the day—a new analysis details 13 ways the proposed tax cuts for corporations and wealthy individuals will negatively impact American families and the U.S. economy while lavishing rewards on corporations and the rich.
The Republican tax bill is loaded with expiring provisions and delayed tax increases that help it comply with budget rules but hide its likely real cost; if policymakers down the road don’t let these provisions take effect, as leading Republicans say they prefer, the bill’s cost would be about $2.2 trillion over the first decade (2018 to 2027) — or almost 50 percent more than the Joint Committee on Taxation’s (JCT) official cost estimate of $1.5 trillion. The final bill relies even more on these sunsets and delayed tax increases than previous versions of it. That’s not surprising, given that House-Senate negotiators were, according to Senator Ron Johnson, “literally trying to squeeze about $2 trillion in tax reform into a $1.5 trillion box.”
The booming renewable energy industry is breathing a wary sigh of relief as Congress prepares to vote this week on a sweeping tax bill that preserves critical tax credits for wind energy, solar power and electric vehicles. As lawmakers were working over the past week to resolve issues between the House and Senate versions of the bill, the clean energy industry kept a keen eye out for details of the legislation, including provisions in the House bill that would have weakened or eliminated the tax credits for renewables. By rejecting that approach, Republicans sent a message that they won't back attempts to kneecap ongoing growth in renewables, despite pressure from the oil and gas industry to scale back incentives for clean energy.
Last week, in the midst of congressional debate on the Republicans’ disastrous tax plan, we went to Senator Susan Collins’ office in Bangor to join the discussion and talk about how the bill will impact people like us. Looking to have a constructive conversation about her vote on the Senate’s version of the tax plan, we were met with the stale talking points that Republicans around the country are repeating in uniformity — so we stayed until we could speak directly with Senator Collins on the phone or in person to get real answers, until our concerns were heard. We need her to know that we won’t stand for a plan that will undermine our health care, our financial well being or our children’s future.
Sen. John Cornyn of Texas, the majority whip, on Sunday said a tax provision, which could personally enrich key Republican lawmakers, was added to the final tax bill as part of an effort to “cobble together the votes we needed to get this bill passed.” Cornyn was pressed about the provision on ABC’s "This Week," after an International Business Times investigation showed that Sen. Bob Corker of Tennessee suddenly switched his vote to “yes” after GOP leaders added the provision, which could boost Corker’s real estate income. A top Democratic senator, Chris Van Hollen of Maryland, responded to Cornyn’s explanation by saying the language put into the bill also “would be a windfall to Donald Trump.”
In the first year of his presidency, Donald Trump has consistently sold out the blue-collar, socially conservative whites who brought him to power, while pursuing policies to enrich his fellow plutocrats. Sooner or later, Trump's core supporters will wake up to this fact, so it is worth asking how far he might go to keep them on his side. The tax legislation that Republicans have rushed through Congress could prove especially dangerous, given that millions of middle-class and low-income households will not only get little out of it, but will actually pay more when income-tax cuts are phased out over time. Moreover, the Republican plan would repeal the Obamacare individual mandate. According to the nonpartisan Congressional Budget Office, this will cause 13 million people to lose health insurance, and insurance premiums to rise by 10%, over the next decade. Not surprisingly, a recent Quinnipiac poll found that a mere 29% of Americans support the Republican plan.