Who really benefits? “Everyday American workers” or people like Donald Trump?
Developments on Day 251 of the Trump Administration:
Trump Declares Tax Revolution — But Raises More Questions
A day after the fourth and possible final failure of the GOP to repeal ObamaCare, Donald Trump declares the initative of tax changes to finally obtain the first major legislative victory of his Presidency.
However, Wednesday’s speech immediately raised questions — from how the Trump Administration will pay for tax cuts to when the measures can be passed to how much Trump will benefit, amidst his failure to declare tax returns.
Trump said in a speech in Indiana:
This is a revolutionary change, and the biggest winners will be the everyday American workers as jobs start pouring into our country, as companies start competing for American labor and as wages start going up at levels that you haven’t seen in many years.
But Trump gave no indiciation of cost and little of how working people and those on low incomes will benefit, in contrast to the explicit, wide-ranging rewards for the wealthy and corporations through the elimination of taxes on large inheritances and deep reductions in business rates.
Under a nine-page Republican proposal, produced after months of secret talks, tax brackets are reduced from seven to three — 12%, 25% and 35% — with Congress having the option of introducing a fourth, higher rate for the wealthy.
The current top rate is 39.6% and the lowest rate is 10%.
The plan also seeks to simplify tax returns with the doubling of the standard deduction to $12,000 for individuals and $24,000 for married couples filing jointly. The child tax credit will rise from $1,000 to an unspecified amount, and create a new $500 tax credit for non-child dependents, such as the elderly.
However, the biggest windfalls appear to be for high earners through the abolition of the alternative minimum tax and the estate tax, and for businesses.
While Trump has refused during the 2016 campaign and his Presidency to reveal his tax returns, estimates from a two-page extract from one return indicated that he would have retained an extra $31 million in 2005 without the alternative minimum tax.
While only 500 Americans have estates that are wealthy enough to pay the estate tax, 13 of Trump’s 24 cabinet members qualify. This gives some of Trump’s closest advisers a generous $1.5 billion dollar tax cut. As Fortune notes, this is the equivalent to twice the amount of money the Trump administration’s budget is proposing to cut from Federal Emergency Management Agency’s state and local disaster-preparedness grants.
Trump himself would personally receive a tax cut of about $4 billion if the estate tax is repealed, assuming Trump is worth the $10 billion that he says he is.
The corporate tax rate is cut to 20% from 35%, and a new tax rate of 25 percent will be created for “pass-through businesses”, such as partnerships and sole proprietorships, which are currently taxed at the rate of their owners.
About 95% of US businesses are structured as pass-throughs.
Analysts said the proposal may cost $2 trillion over the next decade, and they highlighted how the large majority of benefits are reaped by higher earners.
But Trump insisted:
Tax reform will protect low-income and middle-income households, not the wealthy and well-connected. I’m doing the right thing, and it’s not good for me, believe me.”
During the summer, Trump promised quick action to get the tax changes. However, with no sign of a draft, Treasury Secretary Stephen Mnuchin said passage through Congress would not be possible before 2018.
But Tuesday’s collapse of the effort by the GOP to get a Senate bill replacing ObamaCare has raised the urgency for Trump of avoiding any sign of weakness.
In a shift from his earlier strategy of trying to push through measures solely through Republican support, Trump appealed to bipartisanship on Wednesday: “Democrats and Republicans in Congress should come together, finally, to deliver this giant win for the American people.”
Yet he still pursued his approach of threats, saying he would personally work to defeat Indiana’s Democratic Senator Joe Donnelly if he did not follow the White House line: “If Senator Donnelly doesn’t approve it — because, you know, he’s on the other side — we will come here, we will campaign against him like you wouldn’t believe.”
Bannon & Alt-Right Look to Next Victory over GOP “Establishment”
Buoyed by the win of controversial judge Roy Moore in the Republican primary in Alabama, former White House chief strategist Steve Bannon and the alt-right look to their next victory over the GOP “establishment”.
Moore’s 10-point triumph to fill the seat of Attorney General Jeff Sessions was a blow to Senate Majority Leader Mitch McConnell, who had backed the interim Senator Luther Strange. It also put Donald Trump in a difficult position, since he had loudly endorsed Strange: he, or his staff, spent Wednesday deleting recent Trump tweets hailing “Big Luther”.
Bannon and his Breitbart outlet received another boost on Tuesday night when one of their targets, Tennessee Senator Bob Corker — the chair of the Foreign Relations Committee — announced he would not stand for re-election next year. Bannon, who said the Alabama outcome “is going to inspire a lot of people”, immediately disclosed that he has held discussions about the Tennessee race with Mark E. Green.
Green is a Tennessee state senator who was nominated as Army Secretary earlier this year before withdrawing under scrutiny for his past statements about gay and transgender people.
Bannon also reiterated that he is trying to oust Dean Heller of Nevada, Jeff Flake of Arizona, and Roger Wicker of Mississippi. The former White House strategist is also looking into Missouri’s Senate race.
Breitbart celebrates this morning, “Size Matters: The 9-Point Alabama Win Is What Forced Corker out, Others May Follow”.
The site also takes aim at Trump’s son-in-law Jared Kushner, whom it considers a dangerous “globalist”, drawing on a Vanity Fair article and using a reference to The Godfather: “How Jared Kushner Became His Family’s ‘Fredo’”.
Administration Cuts Refugee Admissions to 45,000, Lowest Figure Ever
The Trump Administration cuts the cap on refugee admissions to the US next year to 45,000, the lowest ever set for resettlement.
The administration officially informed Congress of its decision on Wednesday afternoon, ahea of a Saturay deadline.
“The safety and the security of the American people is No. 1, and we want to make sure no one is allowed through who would endanger the safety of the American people,” said an official.
Officials also claime the lower cap would allow the Department of Homeland Security to address a backlog of asylum applications.
Trump had already lowered the refugee cap to 50,000 in his “Muslim Ban” executive order. The US settled 85,000 refugees in fiscal 2016, and President Barack Obama set a goal of admitting 110,000 refugees in 2017.
Hard-line advisor Stephen Miller wanted to set the cap as low as 15,000. The State Department put forward 50,000, while the Department of Homeland Security pushed for 40,000.
The ceiling has previously not been set below 67,000.