So much for rewarding work. Republican tax plan has a big giveaway for the idle rich.
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“I know people that work three jobs and they live next to somebody who doesn’t work at all,” Donald Trump claimed earlier in the month. “And the person who is not working at all and has no intention of working at all is making more money and doing beSo much for rewarding work. Republican tax plan has a big giveaway for the idle rich.
“I know people that work three jobs and they live next to somebody who doesn’t work at all,” Donald Trump claimed earlier in the month. “And the person who is not working at all and has no intention of working at all is making more money and doing better than the person that’s working his and her ass off.” That was Trump’s big argument for welfare reform attacking needy people, and it had no relationship to the reality of aid programs. But that type of arrangement—someone who doesn’t work at all “making more money and doing better than the person that’s working his and her ass off”—is written into the Republican tax plan. To benefit rich people, of course. It comes back to the tax on pass-through businesses, businesses where profits are taxed as the personal income of the business-owner. Pass-through income already goes overwhelmingly to the top one percent, but Republicans plan to double down on that: The House tax bill cuts the top income tax rate for pass-throughs from 39.6 percent to 25 percent, which would cost taxpayers nearly $600 billion over 10 years. About 86 percent of small business owners would not benefit because all of their income is already in the 25 percent tax bracket or lower. Republicans’ much-touted ma and pa shops usually don’t earn make enough to be in the top tax brackets, which kick in at $153,000 of taxable income for couples. The most explicit benefits for the passively rich come from Republicans’ attempt to prevent people from turning themselves into a one-person business. To do that, the House bill makes professionals like lawyers ineligible for the pass-through benefit, while those who actively run an eligible business pay a reduced rate. Pass-through owners only automatically pay the 25 percent rate when someone else runs their business. In other words, the wealthiest Americans are rewarded for not working. Daniel Shaviro, a tax law professor at New York University, labels it the “New Plutocratic Industrial Policy,” adding that it’s the the worst federal income tax proposal he’s ever seen. Shaviro tells Mother Jones that the Senate tax bill is “slightly less plutocratic” because it allows business owners in all tax brackets to deduct a share of their pass-through income. Nevertheless, he says the policy works great for an heir on “the international ski circuit.” Republicans: it’s never really about rewarding work. Rewarding rich people, on the other hand ... Read more