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The GOP Is Proposing A 250 Percent Tax Hike On Millions Of Americans

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The GOP Is Proposing A 250 Percent Tax Hike On Millions Of Americans

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Paul Ryan, Affordable Care Act

Reprinted with permission from AlterNet.

 

The GOP just declared war on the strivers who start their own businesses.

Or to put it another way: The nice young couple who just opened their own independent coffee shop around the corner will likely be hit with a huge tax increase—as much as 250%—while the corporation that operates thousands of coffee shops all around the world is getting its taxes cut 43%.

The complicated new bill (remember when the GOP promised tax simplicity?) also lavishes federal tax favors on rich individuals and on those who live in low tax states.

No wonder the GOP developed the nearly 500-page tax bill in secret. Had the public’s business been conducted in public, this bill simply would not exist. But it may become law because, if there is anything we know about Washington in the age of Trump, it is that our elected leaders don’t listen to us, they listen to the political donor class, and in Trump’s case, to those advisers he says reside in his head.

The Republican tax plan targets a class of voters who have formed the core of the GOP constituency since the age of Lincoln: entrepreneurs and small business owners. The party used to promote tax favors for those who start new enterprises.

But now Trump has turned Washington into a federally protected wetland for big established business and comfortable billionaires, stocking the swamp with the most voracious predators on Wall Street. The GOP bill shows it is on the side of Wall Street, at the expense of Main Street.

The tax plan would dramatically raise taxes on many entrepreneurs, in some cases more than doubling the tax rate they pay on their profits. That explains why groups like the National Federation of Independent Business attacked the bill, saying in a statement that the bill “does not help most small businesses.”

Currently, freelancers, small-business owners and others pay taxes at rates of 10% and then 15% on their profits if their total income puts them below about $125,000 annually. The GOP would tax these same businesses at 25% on about one-third of their profits and at 10% to 15% rates on the rest.

So, if your small business made a profit of $1,000, you would pay 10% rate on the first $700 and a 25% rate on the other $300.  Your total tax would rise by $5.

This completely contradicts the oft-stated GOP claim that what matters are marginal tax rates, the rate paid on the next dollar of income. And, of course, it makes the federal income tax system even more complicated.

Meanwhile, big corporations—known as C Corps to tax policy wonks—would pay a 20% rate.

Ponder that for a moment. The nearly 3,000 companies that own nearly all the business assets would be taxed at a lower rate than the guy who fixes your shoes.

Raising taxes on the smallest businesses while giving the Big Boys a tax rate cut from 35% to 20% only makes sense if you negotiate in secret and you only allow into the room lobbyists hired by those who can afford to buy high-priced influence peddlers.

David Cay Johnston is a Pulitzer Prize-winning investigative journalist specializing in tax matters and the author of The Making of Donald Trump. Follow him @DavidCayJ.

 

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David Cay Johnston

David Cay Johnston won a 2001 Pulitzer Prize for his coverage of taxes in The New York Times. The Washington Monthly calls him “one of America’s most important journalists” and the Portland Oregonian says is work is the equal of the great muckrakers Ida Tarbell, Lincoln Steffens and Upton Sinclair.

At 19 he became a staff writer at the San Jose Mercury and then reported for the Detroit Free Press, Los Angeles Times, The Philadelphia Inquirer and from 1995 to 2008 The New York Times.

Johnston is in his eighth year teaching the tax, property and regulatory law at Syracuse University College of Law and Whitman School of Management.

He also writes for USA Today, Newsweek and Tax Analysts.

Johnston is the immediate past president of the 5,700-member Investigative Reporters & Editors (IRE) and is board president of the nonprofit Investigative Post in Buffalo.

His latest book Divided: The Perils of Our Growing Inequality an anthology he edited. He also wrote a trilogy on hidden aspects of the American economy -- Perfectly Legal, Free Lunch, and The Fine Print – and a casino industry exposé, Temples of Chance.

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39 Comments

  1. Aaron_of_Portsmouth November 4, 2017

    Let’s dispense with the foolishness of useless fancy jargon like “draining the swamp”, “Fiscal Responsibility”, “Compassionate Conservatism”, and “Make America Great Again”. We’re being assaulted by a most heartless, ruthless, and callous group of men and women humanity has ever had to face in human history. I’m referring to the Republican Party.

    Although the name of a thing is irrelevant except as a point of clarification in conversation, what really matters is the attitude of this unprincipled collection of grifters who see partisanship coupled with greed as the royal road to what they think is the good life.

    Greed has never been an attribute of God’s, nor have any of His Messengers given a hint that greed is what we should aspire towards. Yet, the Right Wing would have Americans believe that it is a “virtue” in its own right—in the same spirit as “Randolph” in the movie “Trading Places”, saying that his brother, “Mortimer”, was thought of by their mother as “greedy”, to which Mortimer responded—“she meant it as a compliment”.

    The GOP quite simply put is a gigantic morass of irreligion and indecency in its notion of the reason for our creation, it is a conglomerate unable to strike a balance between inordinate greed and abject poverty—qualities which the Right have learned to exploit to achieve political hegemony.

    Reply
    1. idamag November 4, 2017

      Yes.

      Reply
    2. CrankyToo November 4, 2017

      Brilliant post, Aaron!

      Reply
    3. Independent1 November 4, 2017

      Somehow, Democrats need to start throwing some of Trump’s jargon back in his face. Turning his ‘MAGA’ from ‘Make America Great Again’ to Trump is ‘Making America Gross Again.’

      Reply
      1. Dominick Vila November 5, 2017

        Especially now that we know he is the only person that matters. Does that mean he is finally going to accept responsibility for the things that happen during his tenure. I doubt it…

        Reply
        1. Independent1 November 5, 2017

          And as Sand Cat just pointed out to me in another thread, is that the problem isn’t all Trump; it includes the borderline insane members of Congress that have been embedded there some for decades.

          Which is really clear if 60% of Americans can see that Trump is a terrible president but these borderline insane members of Congress sit back and do nothing (especially when 60 percent disapproval of a president who has only been in office 9 months really makes it clear just how terrible Trump is).

          See this from the Washington Post:

          Trump’s approval rating nearly 1 year after his election is far lower than any president in 7 decades of polling

          A majority of Americans say President Trump has not accomplished much during his first nine months in office, and they have delivered a report card that is far harsher even than the tepid expectations they set for his tenure when he was sworn into office, according to a new Washington Post-ABC News survey.

          Fewer than 4 in 10 Americans — 37 percent — say they approve of the way Trump is handling his job. His disapproval rating has reached 59 percent, with 50 percent saying they strongly disapprove of the job he is doing. Although the ratings have changed little in the past four months, both represent the worst marks of his presidency.

          https://www.washingtonpost.com/politics/poll-trumps-performance-lags-behind-even-tepid-public-expectations/2017/11/04/35d2a912-bf4d-11e7-959c-fe2b598d8c00_story.html?utm_term=.0fe9999963c1&wpisrc=al_news__alert-national&wpmk=1

          When are the borderline insane members of Congress going to come out from under that dark cloud they’ve been sitting under and realize that Trump is putting even their lives and futures at stake, including those of their families, friends and relatives?????

          Reply
          1. Dominick Vila November 5, 2017

            The only thing that matters for most of the Republicans in Congress and other elected offices is the pursuance of economic policies that benefit them, staying in power, and satisfying the wishes of the 80% of Republicans that continue to support Trump. They know that angering that 80% spells disaster for their re-election chances and, not surprisingly, they are putting their personal interests ahead of those of the USA.

            Reply
          2. Independent1 November 5, 2017

            Sad and misguided but unfortunately true.

            Reply
          3. dbtheonly November 6, 2017

            Trump is by no means the most dangerous Republican. In fact, he’s probably the least dangerous by virtue of his incompetence, incoherence, and inconsistency.

            I, for one, am absolutely thrilled that Trump hasn’t accomplished much. Though he’s accomplished more than people think. It will be years cleaning up after him.

            Congressional Republicans aren’t insane. They know exactly what they’re doing.

            That’s the danger.

            Reply
          4. Independent1 November 6, 2017

            Trump has maybe ‘accomplished more than people think’ in the same way that someone with a wrecking ball demolishes a house or building. As if destroying what someone painstakingly created over time by trashing it is really ‘accomplishing something’.

            Reply
        2. Independent1 November 5, 2017

          Dominick, apparently, somehow those supporting Trump have the terrible misguided notion that they can inflict disaster on the vast majority of the American population, and that somehow, that disaster will not eventually include them in some form or another; either financially or with their personal well being and the well being of everyone they care about.

          Only people who are borderline insane would not realize that by jeopardizing the futures of 90% of those who they must live among, will not in time have a dramatic negative impact even on their own lives and futures. If not having a direct impact on them, making their lives miserable to live as if they were living in the swamp of a third world nation.

          How can people be truly happy with their lives when the vast majority of those living around them are living miserable lives?

          Reply
        3. dbtheonly November 5, 2017

          Only good things are going to happen during the term of the Beloved Leader. You need only watch Fox & it’ll be explained to you.

          Beware the Agents of Goldstein who will try to bamboozle you with Fake News.

          Reply
          1. Dominick Vila November 5, 2017

            Let’s hope someone manage to infuse some common sense into the Beloved’s tiny brain, and he takes steps to correct the damage done by his incendiary rhetoric, as well as canceling the TPP and allowing China to gain ground as a result of our isolationist and nationalist tendencies. Hopefully it will not be too late to mend fences with the allies we have cultivated for decades, and at the same time influence a change in the dangerous preparations that are taking place in the DPRK.

            Reply
          2. dtgraham November 6, 2017

            I hear you. I watched a bit of Fox and Friends a few times last week. Apparently, Trump has done the best things that anyone has ever done in history. Now I’ll have to keep watching and find out exactly what they were. I’m still not sure. They weren’t all that specific. What’s everyone complaining about?

            Reply
  2. idamag November 4, 2017

    How do they know it will raise some people’s taxes 250 percent? I haven’t seen the bill. We have such a disgusting government now. This was not a bi-partisan effort. The thing is, even though I do not want my family to hurt, we will need to be hurting a lot before we wake up.

    Reply
  3. 1standlastword November 4, 2017

    These people will learn that they hasten their own demise by their persistent pattern of robbing the citizens of this country of access to a fair share of public revenues and critical services by lying about the benefits of their plots and schemes that only enrich themselves and their corporate donors.

    Paul Ryan is on record exclaiming the average family of four will gain around $1200.00/ year.

    I over heard an astute talk show commenter asserted that amounts to $100.00/ month divided by 4 to equal $25.00 per person–more or less!

    Ryan touts that as a windfall savings and Trump calls it Great and Beautiful!????

    Paul Ryan and Donald Trump unconsciously intend to accelerate the day when Americans will drag the permanent political class of elitist out onto the street for a good beating!

    My guess is it will take only one more humanly engineered “great recession” like the last one a Republican administration created.

    Reply
    1. Independent1 November 4, 2017

      What the GOP is ignoring, is that middle class tax savings will most likely be totally offset by higher living expenses. Trump’s immigration expulsion program is going to increase the costs of many food items, especially fruits and vegetables. And building a new home or remodeling one may become more expensive as immigrants who worked in construction for peanuts are no longer around. And his reversal of the mandate Obama had enacted requiring the auto companies to improve the gallons/mile of autos is going to end up costing people who buy new cars at the pump. And his reversal of some ethanol standards are going to eventually increase the cost of gas at the pump and on and on.

      Reply
      1. 1standlastword November 5, 2017

        Trump and Ly’n Ryan know a certain persuasion of Americans will be satisfied with a “perceived” sense of wealth and security as long as Uberrich white guys tell them “we got your back”. So sad that so many drowning people will refuse a life raft from a person of decent character for an anchor from men of low character It means some among us aren’t destined to survive and that many more will perish for the suicidal intentions of those of a certain breed. But we have Paul Ryan on record claiming this tax proposal is a boon for workaday Americans…that should be enough to bring him down

        Reply
        1. Independent1 November 5, 2017

          What I just pointed out to Dominick, is that many of those in Congress and even those supporting those people, who live in red states don’t seem to realize, is that if they spend much time at all in the states they represent and don’t spend all their time home, every time they go out the door, they have heightened probabilities of dying younger than they may think: as red states by far lead he nation in all forms of pollution-related illnesses, and with respect to muggings and other encounters where people end up being killed one way or another, especially by gun; or in being in an auto accident with someone high on drugs or alcohol (25 of the 27 states with the highest auto fatalities/100,000 are red states).

          So although Trump supporters may not know it, supporting him and even just the GOP’s failed ideologies is greatly increasing even their probability of dying prematurely.

          Reply
          1. 1standlastword November 5, 2017

            A theory attached to the opioid crisis/ epidemic is…get this…the reason why blacks and Hispanics aren’t as much affected is because there appears to be a protective factor involved with racial stereotyping of minority patients. Doctors have been more resistant to treat pain as aggressively when folks are poor and darkly hued. A reinforcing fact of racializing healthcare and politics is the crack epidemic in minority’s communities was criminalized—as we know. The point is the majority might not be able to seek the best interests of their followers because within their communities there is NO correction factor for racism. The same might be true in the progressive liberal camps with the penchant to use identity politics and counter-cultural initiatives to advance social causes as whenever there is an “us” there is a “them “. Tribalism is not a policy fitted to social advancement.

            Reply
          2. dbtheonly November 5, 2017

            Might I suggest a lack of insurance coverage limits the prescription and consummation of the opioids.

            Reply
      2. Sand_Cat November 5, 2017

        The GOP isn’t “ignoring” anything. They know that most of the suckers who vote for them won’t realize any of the things you mention, or – if they do – they’ll vote for someone like Trump to fix them. Trump didn’t appoint Betsy DeVos to head the Department of “Education” to teach Americans to think.

        Reply
        1. Independent1 November 5, 2017

          You’re so right. By ‘ignoring’ I meant they were purposely not including as a caveat in their inflated projections on what their convoluted tax plan would supposedly save the average American.

          These guys in office today are the biggest shysters that were ever in political office.

          Reply
    2. Sand_Cat November 5, 2017

      Do you think Americans will ever really catch on in the numbers required to “drag the permanent political class…onto the street”? Those few that claimed to have caught on mostly voted for Trump and the GOP.
      [Edit] Why do you think we have a Secretary of “Education” like Betsy DeVos? [End-edit]
      Wish I had your optimism.

      Reply
      1. 1standlastword November 6, 2017

        Wrong Paul. Wrong State…perhaps!

        Reply
        1. Sand_Cat November 7, 2017

          What? Were you answering me? Please explain.

          Reply
          1. 1standlastword November 8, 2017

            Rand Paul was assaulted by his neighbor who was likely fed up with his otherworld BS. Just like people will be with Trump and especially brown noser Paul Ryan who first couldn’t abide Trump and now can’t get enough Trump steak (if you know what I mean) in his throat

            Reply
  4. Aaron_of_Portsmouth November 4, 2017

    Sounds like an obscene inversion of Reagan’s notorious trickle-down concept. Either the GOP leadership in Congress subjects all conservative politicians to some sort of annual Vulcan mind-meld that demands the mind to be wiped clean and filled with wildly insane thoughts, or some other explanation must be out there to describe the lunacy of Conservatives.

    Reagan and company made the intentionally false assumption that the average American is altruistic and would naturally be inclined to help shoulder the burden of economic well-being by a willingness to make some sacrifice for others less fortunate.
    And he deviously proposed put forth the malarky that the wealthy are inclined naturally to assist without hesitation those in need

    This was a scam of an idea put forth on purpose for the sake of preserving the wealth of the well-to-do which the country was expected to swallow without demanding that Reagan and other Republicans substantiate why they felt the inordinate rich would so willingly be generous and Christ-like to share. The past 30 or more years have proven just the opposite would take place, and has.

    “Trickle down”, a myth that Americans would be willing to sacrifice as Jesus did, never ever took hold in the clergy or in the hearts of the more fortunate in our society. A devotion to Materialism ensured so much.

    America even before its founding, was destined to be influenced by a populace from Europe who were already in the process of systematically eliminating all notions of the Spirit of Jesus to assist the less fortunate.

    Were these same Europeans not exposed to the Message of Jesus before the time America was established as a social entity, and suddenly transported across time to this era, Jesus would be deemed as a stirrer of sedition by suggesting that society and governments have the privilege and the duty to assist all members in need; He would be called a Socialist, or worse, and worthy of being strung up or run out of the country as a “leftist” with politically correct ideas. The GOP would have deemed Jesus an anarchist out to disrupt the comfortable lives of the gentry, and would have had Him restrained from teaching His Message.

    Reply
    1. Independent1 November 4, 2017

      The chart below shows what really happened when Reagan cut the max tax rate in half and then proceeded to raise taxes on the middleclass 11 times. Our nation’s income going into the pockets of those in the upper 10% skyrocketed starting in the early 1980s (when Reagan took office). Pure evidence that ‘trickle down’ is just one more right-wing pipe dream.

      https://uploads.disquscdn.com/images/5647c6f4837feb53c019e0a4ab3e81a3ac6eb743fbac966556b1ff561fefa746.png

      Reply
      1. Sand_Cat November 5, 2017

        Are you sure the guys who conceived the Reagan tax plan ever really “dreamed” that the result of these policies would be anything other than what they were? Those “dreams” were likely limited to the middle-class suckers who voted for the man.

        Reply
  5. Sand_Cat November 5, 2017

    Think about the fact that those same large corporations already pay nowhere near the current “official” rate, many of the largest and most profitable – the weapons makers, for example – often pay no income tax at all. That isn’t likely to be “reformed” by this or any other GOP bill, unless they revise it to require the government to pay taxes to corporations.

    Reply
    1. Independent1 November 6, 2017

      Absolutely! With all the loopholes in America’s tax laws, corporations today already pay the lowest corporate taxes on the planet for any nations similar to ours. The reason most corporations set up offshore side companies, is because in many of these countries they can set things up in a way where they pay zero taxes because those countries don’t tax companies that are registered in a foreign country (the U.S.). It’s not because the taxes they’ve been paying in the U.S. are so high, it’s because they can get away year after year paying ZERO TAXES.

      Even millionaires and especially billionaires in the U.S. already pay the lowest taxes of any industrialized country on the planet – for 2015 and 16, the IRS says the average billionaire paid 20.4% of their gross income. There’s no similar country to America on the planet that would let billionaires get away with that.

      And according to the IRS, Americans earning 50-100,000 paid an average of 8.7% of their gross in income tax and those earning less than 50,000 paid 4.7% on average. Still numbers lower than virtually any other country.

      The problem in the U.S. is not that corporations are paying too much, it’s that they’re getting away with paying too little to our treasury, shifting the burden to the middle-class and driving up America’s debts.

      Reply
      1. 1standlastword November 6, 2017

        Heard Apple and/or Microsoft are getting a review for too little taxes in Ireland. They might be moving on to Puerto Rico for a new place to exploit human capital. And maybe that silly outrageous new x-model is a test balloon for how much $$$ gadget addicts here Stateside will throw away for a stupid telephone

        Reply
        1. Independent1 November 6, 2017

          Yes, I’m not at all surprised. I forgot to note in my previous post, that I believe countries like Ireland generally only charge taxes for out-of-their-nation companies for the business (sales) they actually do within their country. And I believe they get the sales numbers and profits made on that business in Ireland from the companies themselves. And of course we know just how ‘honest’ many U.S. companies are at reporting the actual income they make from what they sell even here in America. So I would not be surprised if Apple and Microsoft massaged their income numbers with respect to their sales in Ireland in a way that allowed them to pay as little in taxes as they thought they could get away with paying.

          Reply
  6. ivory69690@yahoo.com November 6, 2017

    this is another GOP brain storm of how to get more money in the pot to give to the GREEDY BASTARD RICH that’s all just them (THE GOP) & THE PATHOLOGICAL LIAR DUMP 45 with their BULLSHIT saying that thy are cutting taxes for every one . its the same all the time Ragan did it the DIRTY BUSH did it talk the crap of when thy give money to the greedy rich SOB’s it gets the people more money the trickle down effect . trickles down to the greedy bastards pockets and that where it stays anytime its said that (THEN THE RICH HAS MORE MONEY SO THY CAN MAKE MORE JOBS OR INVEST MORE IN THE COUNTRY WHICH WILL HELP ALL THE PEOPLE IS JUST THEIR WAY OF SAYING THANKS SUCKERS and that’s it then one can be sure those greedy bastard rich are talking to each other saying OMG THY FELL FOR IT AGAIN . that’s why the rest of the people of the country like the middle class don’t get more because thy are so stupid and believe our BULLSHIT .

    Reply
  7. ivory69690@yahoo.com November 6, 2017

    truly what the hell is wrong with the people of the country ????????? how can any of them in any type of mind ever thing the gang of pinheads =GOP want anything for other then the 1 & 2 percent of the greedy rich . its so clear all the time when ever thy talk its all bullshit for the middle class ! the thing is thy never say just what thy are doing . its always tried to be rushed through and with no hearings them BAM their very small print is read and its all talk about doing for the middle class (JUST B/S TALK ) and nothing said about the greedy rich . at the end its the greedy rich that get richer and the middle class gets the shaft as always . I could see if this was to happen once in a great while BUT NO ITS THE SAME THING EVERY SINGLE TIME . never no change it a change is to come its a change that the 1 & 2 % will do better that’s all . and do you think the people would learn from mistakes ? NO NEVER the people keep putting in office the same GOP clowns that screw the people every time . the people are not even bright enough to try the change and get rid of the GOP PARTY THAT ARE ALWAYS SCREWING EVERY ONE BUT THE GREEDY BASTARD RICH . its hard to really believe there are so many stupid people in the country . SADLY ITS TRUE will it change ? a questions that is asked time and time again . almost like that people don’t know how to change things HOW DUMB IS THAT what’s the saying ? ONLY IN AMERICA if one thinks about it then its a wonder how America is the leader of the free world . kicks me in the stones

    Reply
    1. A_Real_Einstein November 9, 2017

      Watch these idiots are going to cut Medicare and Medicaid. That will be end for them. Healthcare was on the ballot in VA. That did not work out very well for these jokers. They know their days are numbered. This is the last grab so they are going big. This does not get out of the Senate. Idiots.

      Reply
  8. ivory69690@yahoo.com November 6, 2017

    AMERICA WHERE COMMON SENSE IS THROWN OUT THE WINDOW SO WE CAN LET A GANG OF PINHEADS = GOP RULE US TO THE BIGGEST SCREWING OF ALL TIME . EACH TIME THE SCREWING GETS BIGGER THEN THE LAST ONE !!

    Reply
  9. A_Real_Einstein November 9, 2017

    Hey David

    He much does this tax cut take from Medicare and Medicaid?

    Reply

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