The National  Memo Logo

Smart. Sharp. Funny. Fearless.

Monday, December 09, 2019 {{ new Date().getDay() }}

Tag: trump tax cuts

House Republicans Now Whine About Debt They Helped To Create

The Treasury Department announced last week that the national debt exceeded $30 trillion for the first time. In the days that followed, Republicans in Congress who helped rack up a large portion of that debt responded with outrage and were quick to try to pin the blame on President Joe Biden and their Democratic colleagues.

But many of the same Republicans who are currently treating the debt as a calamitous existential threat were largely silent on it during the previous administration. And they helped get it to the current level, through big spending and unfunded tax cuts.

"We have a $30 trillion debt, larger than our economy," House Minority Leader Kevin McCarthy complained Thursday in a House floor speech, calling the size of our debt one of the "two greatest threats to the future of the United States," along with China.

"Today is a sad day for the United States of America," Florida Sen. Rick Scott wrote on Friday. "For years, I have been warning about the devastating consequences of our rapidly rising federal debt, but its [sic] fallen on deaf ears in Washington."

"$30,000,000,000,000," tweeted Iowa Rep. Randy Feenstra. "This enormous figure should scare us all. Since 1990, our debt has grown tenfold and there's no indication this is the ceiling."

Though the figure was already more than $27 trillion before Democrats took control of the White House and Congress at the start of 2021, some GOP lawmakers suggested that they were to blame for the entire total.

"$30T in debt under Biden," Louisiana Sen. John Kennedy dishonestly claimed.

"!! 30 TRILLION !! For the first time in American history, our country’s debt has exceeded $30,000,000,000,000," said Arizona Rep. Debbie Lesko. "This is America under a one-party rule."

Oklahoma Sen. Jim Inhofe added, "This unprecedented, reckless spending is unacceptable. It’s past time to get this spending under control and ensure our children and grandchildren aren’t saddled with the consequences of Dems’ poor decision making for generations to come."

It is unclear how big a threat the level of debt really is. A July 2020 assessment by Brookings Institution senior fellow David Wessel noted that "for now" the debt level was not a problem, but that it could become one. "No one really knows at what level a government's debt begins to hurt an economy; there’s a heated debate among economists on that question," he said.

John Jay College of Criminal Justice economics professor J.W. Mason told Quartz last Wednesday that the $30 trillion figure was somewhat misleading, as $8 trillion of that is money the federal government owes to itself — such as funds borrowed from Social Security trust funds.

Over the past 21 years, Senate Republicans voted for about $8.5 trillion in spending and revenue reductions.

President Bill Clinton left office in 2001 with a budget surplus. Rather than pay down the existing debt, congressional Republicans passed President George W. Bush's 2001 and 2003 tax cuts, adding more than $1.4 trillion to the deficit. They also backed his long Iraq War, at a cost of more than $2 trillion.

During President Barack Obama's time in office, Republicans rebranded themselves as debt hawks and used the Tea Party movement to win a House majority in the 2010 midterms on a promise to address the budget deficit.

In 2016, candidate Donald Trump ran on a promise to balance the budget and get rid of the national debt entirely "fairly quickly."

But once he took office in 2017, Trump and his party quickly dropped the issue. Trump never put forward a plan to balance the budget and House and Senate Republicans did little to reign in his spending on defense, a border wall that Mexico did not pay for, and tax cuts for the rich.

Their Tax Cuts and Jobs Act of 2017 meant about $1.9 trillion in additional debt spending between 2018 and 2028. Even before the 2020 coronavirus pandemic shut down much of the nation's economy, Trump's policies meant borrowing trillions.

Once COVID-19 hit the U.S., both parties joined together to spend several trillion more on public health, relief checks, and support for businesses to help them avoid layoffs. In total $7.8 trillion was added to the debt over Trump's single term in the White House.

Once Biden took office, Republicans quickly remembered the debt as an issue. Some even admitted that they deserved some of the blame for the problem.

"I don't think anybody has a very good record for the last decade on this," Sen. Roy Blunt of Missouri told Fox News in April 2021.

"I mean the previous administration, debt and deficits weren't a high priority for them," Minority Whip John Thune admitted that March.

Both still voted last February for an unsuccessful amendment aimed at making Trump's individual tax cuts permanent.

They and every other Republican in Congress then opposed Biden's Build Back Better proposals, which would have invested in climate and caregiving infrastructure but actually reduced the national debt. GOP leaders said standing against the plan's increased taxes on those earning $400,000 and up and on corporations was their "red line."

Reprinted with permission from American Independent

How Much Blame Does Biden Deserve For Inflation Woes?

President Joe Biden's standing with voters has taken a beating on multiple fronts. He is perceived as not focusing on issues they care about, particularly inflation.

Inflation is a president slayer. Richard Nixon imposed wage and price controls. When they were lifted, prices soared even higher. Would Nixon have been removed over Watergate if the economy had been better?

Gerald Ford issued red and white lapel pins proclaiming "WIN," which stood for "Whip Inflation Now." Inflation was unimpressed. Ford got whipped by Jimmy Carter in the 1976 election.

Inflation dogged the Carter presidency as well. Carter did eventually appoint a determined inflation hawk, Paul Volcker, to lead the Federal Reserve. He threw the nation into a recession by hiking interest rates. Ronald Reagan defeated Carter in 1980.

Does Biden deserve the blame for inflation? Not to the degree people are saying.

Senate Republicans held a press conference in July blaming the "insane tax and spending spree of President Biden and the Democrats for six straight months of raging inflation." In December, Sen. Mitch McConnell tweeted: "It is unthinkable that Senate Democrats would try to respond to this inflation report by ramming through another massive socialist spending package in a matter of days."

Whoa. Biden did pass a large COVID-19 bill early in his term, but the rest of the "socialism" Republicans are fulminating about did not pass.

Republicans are suddenly crying "socialism!" but let's be fair. While the government has been pumping money into the economy at a record clip over the past 14 years, most of that has been the work of the Federal Reserve, and former President Donald Trump was the most vociferous proponent of easy money we've ever seen.

Since the financial crisis of 2008, the Federal Reserve has been shoveling money out the door with pitchforks, and in the wake of COVID-19, both the central bank and the federal government have been "dropping money from helicopters," to use the image coined by Milton Friedman.

Many economists believe the Fed was right to do this as a response to the financial crisis of 2008. The controversy arises about when it was time to stop. Arguably, the Trump years were the right time. But that's not what the Trump-led GOP favored.

Trump's money gusher began in 2017 with the $1.9 trillion tax cut that wasn't matched with any spending cuts.

Trump appointed Jerome Powell to the Fed but quickly soured on him when he didn't increase the money supply quickly enough for Trump's taste. Powell was soon on the receiving end of Trump tweets. He argued that "we need rate cuts and easing" (exactly the opposite of what we needed).

If Republicans were worried about inflation, they might have spoken up about Trump's attempt to flood the economy with easy cash (to say nothing of eroding the norm about political influence on the Fed).

Then came COVID-19. Most people think the big federal cash infusion, the $2.2 trillion Coronavirus Aid, Relief and Economic Security Act, was a necessary response to the emergency. It saved many from destitution. But that money, combined with the trillions of dollars of quantitative easing and near-zero interest rates over the past decade and a half, certainly set the stage for inflation. Congress passed an additional $900 billion in December of 2020 — which Trump signed — for a grand total of over $3 trillion in COVID-19 relief.

Again, all of this money sloshed into the economy before Biden took the oath of office.

Was it wise for Biden to pass yet another COVID-19 relief package, the $1.9 trillion American Rescue Plan, in 2021? I don't think so. But did it cause the inflation we're experiencing now?

The annual inflation rate for most things Americans buy was already at the highest level in a decade before Biden entered the White House. And inflation is global. According to the Organization for Economic Cooperation and Development, inflation among its 38 member states is running higher than at any point since 2008.

So, even if Biden is only partially responsible for the inflation we've got, there are steps he can take. One would be to remove the Trump-imposed tariffs, which are taxes that raise the price of goods to Americans. Another would be to promote more legal immigration. We are suffering a severe labor shortage in all areas. More labor would ease bottlenecks at ports and in transportation. Make keeping schools open a priority. Remote learning has been terrible for kids, and many parents cannot work if their kids are not in school.

Biden should forthrightly address what's on voters' minds. He's gotten tangled up in internecine fights with other Democrats over matters voters don't know or care about and that he can't even win. If they sense he's not really engaged in controlling the inflation menace, it could well do to him what it has done to other presidents.

Reprinted with permission from Creators.com

Sinema Now Defending Trump Tax Cuts She Condemned

Reprinted with permission from DailyKos

It's Sen. Kyrsten Sinema's turn to play the skunk at President Joe Biden's picnic. It's almost as if she and Sen. Joe Manchin are deliberately working together to try to kill the large budget reconciliation package that will contain his Build Back Better programs. It's turning into a dangerous game of Whack-a-Mole: Manchin presents his unreasonable demands and the White House and fellow Democrats scramble to meet them, only to have Sinema then pop up with her must-haves. Or in this case, must-have-nots.

Read Now Show less

Secret IRS Files Show How Trump Tax Cut Greased The Super-Rich

Reprinted with permission from ProPublica

In November 2017, with the administration of President Donald Trump rushing to get a massive tax overhaul through Congress, Sen. Ron Johnson (R-WI) stunned his colleagues by announcing he would vote "no."

Making the rounds on cable TV, the Wisconsin Republican became the first GOP senator to declare his opposition, spooking Senate leaders who were pushing to quickly pass the tax bill with their thin majority. "If they can pass it without me, let them," Johnson declared.

Johnson's demand was simple: In exchange for his vote, the bill must sweeten the tax break for a class of companies that are known as pass-throughs, since profits pass through to their owners. Johnson praised such companies as "engines of innovation." Behind the scenes, the senator pressed top Treasury Department officials on the issue, emails and the officials' calendars show.

Within two weeks, Johnson's ultimatum produced results. Trump personally called the senator to beg for his support, and the bill's authors fattened the tax cut for these businesses. Johnson flipped to a "yes" and claimed credit for the change. The bill passed.

The Trump administration championed the pass-through provision as tax relief for "small businesses."

Confidential tax records, however, reveal that Johnson's last-minute maneuver benefited two families more than almost any others in the country — both worth billions and both among the senator's biggest donors.

Dick and Liz Uihlein of packaging giant Uline, along with roofing magnate Diane Hendricks, together had contributed around $20 million to groups backing Johnson's 2016 reelection campaign.

The expanded tax break Johnson muscled through netted them $215 million in deductions in 2018 alone, drastically reducing the income they owed taxes on. At that rate, the cut could deliver more than half a billion in tax savings for Hendricks and the Uihleins over its eight-year life.

But the tax break did more than just give a lucrative, and legal, perk to Johnson's donors. In the first year after Trump signed the legislation, just 82 ultrawealthy households collectively walked away with more than $1 billion in total savings, an analysis of confidential tax records shows. Republican and Democratic tycoons alike saw their tax bills chopped by tens of millions, among them: media magnate and former Democratic presidential candidate Michael Bloomberg; the Bechtel family, owners of the engineering firm that bears their name; and the heirs of the late Houston pipeline billionaire Dan Duncan.

Usually the scale of the riches doled out by opaque tax legislation — and the beneficiaries — remain shielded from the public. But ProPublica has obtained a trove of IRS records covering thousands of the wealthiest Americans. The records have enabled reporters this year to explore the diverse menu of options the tax code affords the ultra-wealthy to avoid paying taxes.

The drafting of the Trump law offers a unique opportunity to examine how the billionaire class is able to shape the code to its advantage, building in new ways to sidestep taxes.

The Tax Cuts and Jobs Act was the biggest rewrite of the code in decades and arguably the most consequential legislative achievement of the one-term president. Crafted largely in secret by a handful of Trump administration officials and members of Congress, the bill was rushed through the legislative process.

As draft language of the bill made its way through Congress, lawmakers friendly to billionaires and their lobbyists were able to nip and tuck and stretch the bill to accommodate a variety of special groups. The flurry of midnight deals and last-minute insertions of language resulted in a vast redistribution of wealth into the pockets of a select set of families, siphoning away billions in tax revenue from the nation's coffers. This story is based on lobbying and campaign finance disclosures, Treasury Department emails and calendars obtained through a Freedom of Information Act lawsuit, and confidential tax records.

For those who benefited from the bill's modifications, the collective millions spent on campaign donations and lobbying were minuscule compared with locking in years of enormous tax savings.

A spokesperson for the Uihleins declined to comment. Representatives for Hendricks didn't respond to questions. In response to emailed questions, Johnson did not address whether he had discussed the expanded tax break with Hendricks or the Uihleins. Instead, he wrote in a statement that his advocacy was driven by his belief that the tax code "needs to be simplified and rationalized."

"My support for 'pass-through' entities — that represent over 90% of all businesses — was guided by the necessity to keep them competitive with C-corporations and had nothing to do with any donor or discussions with them," he wrote.

Trump Tax Overhaul Showered Millions on Handful of Americans


Source: ProPublica analysis of IRS data

By the summer of 2017, it was clear that Trump's first major legislative initiative, to "repeal and replace" Obamacare, had gone up in flames, taking a marquee campaign promise with it. Looking for a win, the administration turned to tax reform.

"Getting closer and closer on the Tax Cut Bill. Shaping up even better than projected," Trump tweeted. "House and Senate working very hard and smart. End result will be not only important, but SPECIAL!"

At the top of the Republican wishlist was a deep tax cut for corporations. There was little doubt that such a cut would make it into the final legislation. But because of the complexity of the tax code, slashing the corporate tax rate doesn't actually affect most U.S. businesses.

Corporate taxes are paid by what are known in tax lingo as C corporations, which include large publicly traded firms like AT&T or Coca-Cola. Most businesses in the United States aren't C corporations, they're pass-throughs. The name comes from the fact that when one of these businesses makes money, the profits are not subject to corporate taxes. Instead, they "pass through" directly to the owners, who pay taxes on the profits on their personal returns. Unlike major shareholders in companies like Amazon, who can avoid taking income by not selling their stock, owners of successful pass-throughs typically can't avoid it.

Pass-throughs include the full gamut of American business, from small barbershops to law firms to, in the case of Uline, a packaging distributor with thousands of employees.

So alongside the corporate rate cut for the AT&Ts of the world, the Trump tax bill included a separate tax break for pass-through companies. For budgetary reasons, the tax break is not permanent, sunsetting after eight years.

Proponents touted it as boosting "small business" and "Main Street," and it's true that many small businesses got a modest tax break. But a recent study by Treasury economists found that the top one percent of Americans by income have reaped nearly 60% of the billions in tax savings created by the provision. And most of that amount went to the top 0.1%. That's because even though there are many small pass-through businesses, most of the pass-through profits in the country flow to the wealthy owners of a limited group of large companies.

Tax records show that in 2018, Bloomberg, whom Forbes ranks as the 20th wealthiest person in the world, got the largest known deduction from the new provision, slashing his tax bill by nearly $68 million. (When he briefly ran for president in 2020, Bloomberg's tax plan proposed ending the deduction, though his plan was generally friendlier to the wealthy than those of his rivals.) A spokesperson for Bloomberg declined to comment.

Americans With the Highest Income Reaped Most of the Pass-through Tax Break Benefits in 2018


Source: National Bureau of Economic Research study Credit: Lucas Waldron/ProPublica

Johnson's intervention in November 2017 was designed to boost the bill's already generous tax break for pass-through companies. The bill had allowed for business owners to deduct up to 17.4 percent of their profits. Thanks to Johnson holding out, that figure was ultimately boosted to 20 percent.

That might seem like a small increase, but even a few extra percentage points can translate into tens of millions of dollars in extra deductions in one year alone for an ultra-wealthy family.

The mechanics are complicated but, for the rich, it generally means that a business owner gets to keep an extra seven cents on every dollar of profit. To understand the windfall, take the case of the Uihlein family.

Dick, the great-grandson of a beer magnate, and his wife, Liz, own and operate packaging giant Uline. The logo of the Pleasant Prairie, Wisconsin, firm is stamped on the bottom of countless paper bags. Uline produced nearly $1 billion in profits in 2018, according to ProPublica's analysis of tax records. Dick and Liz Uihlein, who own a majority of the company, reported more than $700 million in income that year. But they were able to slash what they owed the IRS with a $118 million deduction generated by the new tax break.

Liz Uihlein, who serves as president of Uline, has criticized high taxes in her company newsletter. The year before the tax overhaul, the couple gave generously to support Trump's 2016 presidential campaign. That same year, when Johnson faced long odds in his reelection bid against former Sen. Russ Feingold, the Uihleins gave more than $8 million to a series of political committees that blanketed the state with pro-Johnson and anti-Feingold ads. That blitz led the Milwaukee Journal Sentinel to dub the Uihleins "the Koch brothers of Wisconsin politics."

Johnson's campaign also got a boost from Hendricks, Wisconsin's richest woman and owner of roofing wholesaler ABC Supply Co. The Beloit-based billionaire has publicly pushed for tax breaks and said she wants to stop the U.S. from becoming "a socialistic ideological nation."

Hendricks has said Johnson won her over after she grilled him at a brunch meeting six years earlier. She gave about $12 million to a pair of political committees, the Reform America Fund and the Freedom Partners Action Fund, that bought ads attacking Feingold.

In the first year of the pass-through tax break, Hendricks got a $97 million deduction on income of $502 million. By reducing the income she owed taxes on, that deduction saved her around $36 million.

Even after Johnson won the expansion of the pass-through break in late 2017, the final text of the tax overhaul wasn't settled. A congressional conference committee had to iron out the differences between the Senate and House versions of the bill.

Sometime during this process, eight words that had been in neither the House nor the Senate bill were inserted: "applied without regard to the words 'engineering, architecture.'"

With that wonky bit of legalese, Congress smiled on the Bechtel clan.

The Bechtels' engineering and construction company is one of the largest and most politically connected private firms in the country. With surgical precision, the new language guaranteed the Bechtels a massive tax cut. In previous versions of the bill, construction would have been given a tax break, but engineering was one of the industries excluded from the pass-through deduction for reasons that remain murky.

When the bill, with its eight added words, took effect in 2018, three great-great-grandchildren of the company's founder, CEO Brendan Bechtel and his siblings Darren and Katherine, together netted deductions of $111 million on $679 million in income, tax records show.

And that's just one generation of Bechtels. The heirs' father, Riley, also holds a piece of the firm, as does a group of nonfamily executives and board members. In all, Bechtel Corporation produced around $2.3 billion of profit in 2018 alone — the vast majority of which appears to be eligible for the 20% deduction.

Who wrote the phrase — and which lawmaker inserted it — has been a much-discussed mystery in the tax policy world. ProPublica found that a lobbyist who worked for both Bechtel and an industry trade group has claimed credit for the alteration.

In the months leading up to the bill's passage in 2017, Bechtel had executed a full-court press in Washington, meeting with Trump administration officials and spending more than $1 million lobbying on tax issues.

Bechtel met with the Treasury's point man on the tax bill, Justin Muzinich, on pass-through issues in July 2017.

Bechtel also retained a top Washington firm to lobby specifically on pass-through business issues in the tax bill.

Bechtel hired another lobbying firm in the same period.

The chief lobbyist was Marc Gerson, a former top tax lawyer on Capitol Hill.

Amid intense industry lobbying pressure, this phrase was inserted into the bill that extended the lucrative tax break to engineering firms.

Gerson, the lobbyist, later took credit in his law firm bio for winning the tax break for engineering companies.

Thanks to the last-minute insertion into the law, Brendan Bechtel, the company CEO, netted $64 million in write-offs from the tax break in 2018 alone. (A Bechtel spokesperson didn't respond to questions.)

Marc Gerson, of the Washington law firm Miller & Chevalier, was paid to lobby on the tax bill by both Bechtel and the American Council of Engineering Companies, of which Bechtel is a member. At a presentation for the trade group's members a few weeks after Trump signed the bill into law, Gerson credited his efforts for the pass-through tax break, calling it a "major legislative victory for the engineering industry." Gerson did not respond to a request for comment.

Bechtel's push was part of a long history of lobbying for tax breaks by the company. Two decades ago, it even hired a former IRS commissioner as part of a successful bid to get "engineering and architectural services" included in one of President George W. Bush's tax cuts.

The company's lobbying on the Trump tax bill, and the tax break it received, highlight a paradox at the core of Bechtel: The family has for years showered money on anti-tax candidates even though, as The New Yorker's Jane Mayer has written, Bechtel "owed almost its entire existence to government patronage." Most famous for being one of the companies that built the Hoover Dam, in recent years it has bid on and won marquee federal projects. Among them: a healthy share of the billions spent by American taxpayers to rebuild Iraq after the war. The firm recently moved its longtime headquarters from San Francisco to Reston, Virginia, a hub for federal contractors just outside the Beltway.

A spokesperson for Bechtel Corporation didn't respond to questions about the company's lobbying. The spokesperson, as well as a representative of the family's investment office, didn't respond to requests to accept questions about the family's tax records.

Brendan Bechtel has emerged this year as a vocal critic of President Joe Biden's proposal to pay for new infrastructure with tax hikes.

"It's unfair to ask business to shoulder or cover all the additional costs of this public infrastructure investment," he said on a recent CNBC appearance.

As the landmark tax overhaul sped through the legislative process, other prosperous groups of business owners worried they would be left out. With the help of lobbyists, and sometimes after direct contact with lawmakers, they, too, were invited into what Trump dubbed his "big, beautiful tax cut."

Among the biggest winners during the final push were real estate developers.

The Senate bill included a formula that restricted the size of the new deduction based on how much a pass-through business paid in wages. Congressional Republicans framed the provision as rewarding businesses that create jobs. In effect, it meant a highly profitable business with few employees — like a real estate developer — wouldn't be able to benefit much from the break.

Developers weren't happy. Several marshaled lobbyists and prodded friendly lawmakers to turn things around.

At least two of them turned to Johnson.

"Dear Ron," Ted Kellner, a Wisconsin developer, and a colleague wrote in a letter to Johnson. "I'm concerned that the goal of a fair, efficient and growth oriented tax overhaul will not be achieved, especially for private real estate pass-through entities."

Johnson forwarded the letter from Kellner, a political donor of his, to top Republicans in the House and Senate: "All, Yesterday, I received this letter from very smart and successful businessmen in Milwaukee," adding that the legislation as it stood gave pass-throughs "widely disparate, grossly unfair" treatment.

House Ways and Means Committee Chairman Kevin Brady, R-Texas, responded with a promise to do more: "Senator — I strongly agree we should continue to improve the pass-through provisions at every step. You are a great champion for this." Congress is not subject to the Freedom of Information Act, but Treasury officials were copied on the email exchange. ProPublica obtained the exchange after suing the Treasury Department.

Kellner got his wish. In the final days of the legislative process, real estate investors were given a side door to access the full deduction. Language was added to the final legislation that allowed them to qualify if they had a large portfolio of buildings, even if they had small payrolls.

With that, some of the richest real estate developers in the country were welcomed into the fold.

The tax records obtained by ProPublica show that one of the top real estate industry winners was Donald Bren, sole owner of the Southern California-based Irvine Company and one of the wealthiest developers in the United States.

In 2018 alone, Bren personally enjoyed a deduction of $22 million because of the tax break. Bren's representatives did not respond to emails and calls from ProPublica.

His company had hired Wes Coulam, a prominent Washington lobbyist with Ernst & Young, to advocate for its interests as the bill was being hammered out. Before Coulam became a lobbyist, he worked on Capitol Hill as a tax policy adviser for Utah Sen. Orrin Hatch.

Hatch, then the Republican chair of the Senate Finance Committee, publicly took credit for the final draft of the new deduction, amid questions about the real estate carveout. Hatch's representatives did not respond to questions from ProPublica about how the carveout was added.

ProPublica's records show that other big real estate winners include Adam Portnoy, head of commercial real estate giant the RMR Group, who got a $14 million deduction in 2018. Donald Sterling, the real estate developer and disgraced former owner of the Los Angeles Clippers, won an $11 million deduction. Representatives for Portnoy and Sterling did not respond to questions from ProPublica.

Another gift to the real estate industry in the bill was a tax deduction of up to 20% on dividends from real estate investment trusts, more commonly known as REITs. These companies are essentially bundles of various real estate assets, which investors can buy chunks of. REITs make money by collecting rent from tenants and interest from loans used to finance real estate deals.

The tax cut for these investment vehicles was pushed by both the Real Estate Roundtable, a trade group for the entire industry, and the National Association of Real Estate Investment Trusts. The latter, a trade group specifically for REITs, spent more than $5 million lobbying in Washington the year the tax bill was drafted, more than it had in any year in its history.

Steven Roth, the founder of Vornado Realty Trust, a prominent REIT, is a regular donor to both groups' political committees.

Roth had close ties to the Trump administration, including advising on infrastructure and doing business with Jared Kushner's family. He became one of the biggest winners from the REIT provision in the Trump tax law.

Roth earned more than $27 million in REIT dividends in the two years after the bill passed, potentially allowing him a tax deduction of about $5 million, tax records show. Roth did not respond to requests for comment, and his representatives did not accept questions from ProPublica on his behalf.

Another carveout benefited investors of publicly traded pipeline businesses. Sen. John Cornyn, a Texas Republican, added an amendment for them to the Senate version of the bill just before it was voted on.

Without his amendment, investors who made under a certain income would have received the deduction anyway, experts told ProPublica. But for higher-income investors, a slate of restrictions kicked in. In order to qualify, they would have needed the businesses they're invested in to pay out significant wages, and these oil and gas businesses, like real estate developers, typically do not.

Cornyn's amendment cleared the way.

The trade group for these companies and one of its top members, Enterprise Products Partners, a Houston-based natural gas and crude oil pipeline company, had both lobbied on the bill. Enterprise was founded by Dan Duncan, who died in 2010.

The Trump tax bill delivered a win to Duncan's heirs. ProPublica's data shows his four children, who own stakes in the company, together claimed more than $150 million in deductions in 2018 alone. The tax provision for "small businesses" had delivered a windfall to the family Forbes ranked as the 11th richest in the country.

In a statement, an Enterprise spokesperson wrote: "The Duncan family abides by all applicable tax laws and will not comment on individual tax returns, which are a private matter." Cornyn's office did not respond to questions about the senator's amendment.

The tax break is due to expire after 2025, and a gulf has opened in Congress about the future of the provision.

In July, Senate Finance Chair Ron Wyden (D-OR)., proposed legislation that would end the tax cut early for the ultra-wealthy. In fact, anyone making over $500,000 per year would no longer get the deduction. But it would be extended to the business owners below that threshold who are currently excluded because of their industry. The bill would "make the policy more fair and less complex for middle-class business owners, while also raising billions for priorities like child care, education, and health care," Wyden said in a statement.

Meanwhile, dozens of trade groups, including the Chamber of Commerce, are pushing to make the pass-through tax cut permanent. This year, a bipartisan bill called the Main Street Tax Certainty Act was introduced in both houses of Congress to do just that.

One of the bill's sponsors, Rep. Henry Cuellar (D-TX) pitched the legislation this way: "I am committed to delivering critical relief for our nation's small businesses and the communities they serve."

Raising Corporate Taxes Makes Plutocrats Cry — But The People Cheer

Not only are the rich different from you and me; they're becoming more different than ever.

I'm not referring to mere millionaires but to the billionaire bunch. In the past year, while ordinary Americans have lost jobs, businesses, and homes due to the economic crash caused by the COVID-19 pandemic, America's 664 billionaires have found themselves nearly 40 percent richer than before the pandemic! These fortunate few collectively added more than a trillion dollars to their personal stashes of wealth in 2020. And practically all of them got so much richer by doing nothing : Their money made the extra money for them, because corporate stock prices zoomed even as regular people lost income.

Take a peek at THE richest of these different ones: Jeff Bezos, the alpha-geek of Amazon. He hauled in an additional $75 billion last year (roughly $8.6 million an hour), giving him roughly $188 billion in total wealth. You can do a lot of good in our world with such riches ... or you can splurge on yourself.

Jeff splurged. He bought a boat — more accurately, an ocean-going ship, one of the largest sailing vessels ever built. More than one-and-a-third football fields long, the super-yacht apparently cost the diminutive mega-billionaire some half a billion bucks. But that is the price before Bezos' big boat goes anywhere: He'll reportedly pay some $60 million each year for operating expenses.

Plus, he had to buy a "support yacht" to sail along with his main boat. Why? Because the three sails on his 400-footer are so huge that a helicopter can't land on the deck, requiring an auxiliary yacht to provide a helipad.

See, the rich really are different. Where to park the helicopter while at sea is a problem you and I don't have to face.

According to mega-yacht sellers, the main draw of these ostentatious purchases is that they reinforce inequality, literally letting the rich float in leisure and luxury, oceans apart from even having to see hoi polloi like us.

"Outrageous," screeched the president of the U.S. Chamber of Commerce. "Archaic," moaned the president of the National Association of Manufacturers. "It doesn't feel fair," whimpered the chief executive of the giant Bechtel construction company.

The wailing by those who run corporate America is not for the plight of the great majority of workaday families who've seen their incomes stagnate and even plummet to zero during the past months of the coronavirus pandemic. Rather, this chorus of woe is arising from powerful plutocratic interests that have been enjoying windfall profits but now want us to feel sorry for them. Why? Because, they cry, that meanie in the White House, Joe Biden, intends to jack up their corporate tax rate up from 21 percent to 28 percent.

But wait. Didn't former President Trump and the GOP Congress slash the corporate share of our nation's upkeep nearly in half just four years ago, from 35 percent to 21 percent, shifting the burden to the middle class and poor? Yes. And didn't they promise that those cuts would create millions of new jobs and raise the incomes of the working class? Yes, again. Yet corporations got richer and working stiffs got shafted.

Still, here they come again, howling that raising corporate taxes would crash the stock market. Well, on the day Biden announced his plan, stock prices did fall ... by less than one percent. The next day, they bounced right back, and they're still booming.

Moreover, those are crocodile tears the rich are shedding, for they know that — as Biden himself makes clear — his proposed uptick in their tax share "is not going to affect their standard of living at all, not a little tiny bit." They'll still have their two or three big houses, private jets, and yachts. But with them paying just a bit more toward the Common Good, our country will be able to reinvest in society's physical and human infrastructure, making America stronger and fairer for all.

That's why there are broad and deep public majorities — even among Republicans — supporting Biden's infrastructure plan and an increase in corporate taxes to pay for it. For more information, go to AmericansForTaxFairness.org.

To find out more about Jim Hightower and read features by other Creators Syndicate writers and cartoonists, visit the Creators webpage at www.creators.com.

GOP Senators Who Voted Trillions In Tax Cuts Now Back ‘Balanced Budget’ Amendment

Reprinted with permission from American Independent

Nine Republican senators introduced a proposed constitutional amendment on Wednesday that would both require a balanced federal budget and make it nearly impossible for the government to maintain even current levels of spending.

The resolution, backed by Sens. Cindy Hyde-Smith (R-MS), Marcia Blackburn (R-TN), Mike Crapo (R-ID), Joni Ernst (R-IA), Deb Fischer (R-NE), John Hoeven (R-ND), Jim Risch (R-ID), Marco Rubio (R-FL), and Thom Tillis (R-NC), would bar the federal government from spending more than it takes in during a given year.

While the proposed amendment would allow Congress to waive the balanced budget rules "for any fiscal year in which a declaration of war against a nation-state is in effect," it makes no exception for pandemics.

Every one of the sponsors voted to add trillions to the debt last year in emergency COVID-19 relief spending. Had this rule been in place, such action would have required a two-thirds vote in the House and Senate. The amendment contains exceptions only for cases of foreign wars or for situations where two-thirds of both congressional chambers deem it essential.

But in 2017, Blackburn, Crapo, Ernst, Fischer, Hoeven, Risch, Rubio, and Tillis all voted for the Tax Cut and Jobs Act, Donald Trump's legislation to cut taxes significantly for big business and the very wealthy.

They voted for this bill, despite knowing that it would raise deficits. According to the nonpartisan Tax Policy Center, the Trump tax law will likely "add $1 to $2 trillion to the federal debt" in its first decade by reducing revenue.

With declining tax revenue and massive new spending to address the coronavirus pandemic, the federal budget deficit for 2020 was an estimated $3.3 trillion, up from about $1 trillion the year before. To get that down to zero, as the amendment would require, Congress would either have to slash spending, increase tax revenue, or do some combination of the two.

But another provision of this group's proposal would make the second and third options virtually impossible: The amendment would require a two-thirds supermajority in both the House and Senate for the federal government to ever again raise taxes.

With the vast majority of congressional Republicans on record promising to oppose virtually any increase to individual or business tax rates, such a vote would be highly unlikely, meaning huge cuts to government programs would be required.

Yet another provision of this amendment would require a three-fifths vote in Congress to raise the federal debt limit, which would make it vastly more difficult to avoid default on the growing national debt. Several votes to increase the limit in recent years have been by a narrow majority. Experts say a default would be disastrous for the U.S. economy, which could further reduce revenue.

In a statement, Fischer explained her support for the "balanced budget" resolution, writing: "To ensure that our nation is fiscally responsible, Congress must stop budgeting crisis to crisis. Families in Nebraska and across the country have to make difficult decisions about their own budgets, and it is far past time for Congress to do the same."

Published with permission of The American Independent Foundation.

How Donald Trump Threatens The Retirement Of Every American Worker

This article was produced by the Independent Media Institute.

Tom Michels worked 31 years at LTV's iron ore mine in northern Minnesota—and had already started making retirement plans—when the company's bankruptcy wiped out his job and most of his hard-earned pension.

Michels took a series of odd jobs to make ends meet until he became eligible for the Social Security benefits that now enable the 71-year-old to buy food, cover health care costs and even travel a little with his wife, Vicky.

Read Now Show less

New Data: Rich Got Richer, But Most Americans Fared Worse Under Trump

The first data showing how all Americans are faring under Donald Trump reveal the poor and working classes sinking slightly, the middle class treading water, the upper-middle class growing and the richest, well, luxuriating in rising rivers of greenbacks.

More than half of Americans had to make ends meet in 2018 on less money than in 2016, my analysis of new income and tax data shows.

Read Now Show less