Tax Bill Lets Trump and Republicans Feather Their Own Nests

(THIS ARTICLE IS COURTESY OF THE NEW YORK TIMES)

 

Photo

CreditTom Brenner/The New York Times

To understand the cynicism and mendacity underlying the Republican tax bill, look no further than a provision that would benefit President Trump and other property tycoons that is in the final legislation Congress is expected to vote on this week.

The provision would allow people who make money from real estate to take a 20 percent deduction on income they earn through limited liability companies, partnerships and other so-called pass-through entities that do not pay the corporate tax. The beneficiaries would also include members of Congress like Senator Bob Corker, who last week decided he would vote for the bill even though Republican leaders did nothing to address his concerns about an exploding federal deficit.

The biggest winners would be people like Mr. Trump, his family and similarly advantaged developers who make tens or hundreds of millions of dollars every year on swanky office towers and luxurious apartment buildings. An earlier version of the bill passed by the Senate provided a 23 percent deduction but put limits on its use that would prevent wealthy developers from profiting from it. The House version would simply have reduced the rate at which pass-through income is taxed.

Republican leaders and Mr. Corker, who owns a real estate partnership in Tennessee, say the new loophole was not put in place to win over his vote. Mr. Corker has become more important because his party can afford to lose only two votes, and Senator John McCain will be absent because of the aftereffects from his cancer treatment.

Republicans insist, further, that the provision was not “airdropped” — Mr. Corker’s term — into the tax bill during conference committee negotiations, and that its main purpose was to make sure pass-through businesses were not treated unfairly because corporations would be getting a big tax cut to 21 percent, from 35 percent now. Whatever the Republicans’ protestations, this malodorous loophole is further confirmation that congressional leaders are doing everything they can to maximize benefits for the wealthy at the expense of almost everybody else.

As for Mr. Trump, he has been going around saying the tax bill would “cost me a fortune” and his accountants “are going crazy now.” This claim has always been “fake news.” But with the new loophole it has become even more nonsensical. Having done nothing to drain the Washington swamp, the president now luxuriates in its warm waters.

Continue reading the main story

All told, the 20 percent deduction for pass-through income would cost the government $414.5 billion in lost revenue over 10 years, according to Congress’s Joint Committee on Taxation. To put that number into context, it is about 29 times as much as the roughly $14 billion a year that the federal government spends on the Children’s Health Insurance Program, which covers nearly nine million kids from low-income families. Congress let authorization for that program lapse at the end of September.

The tax bill’s generosity toward real estate titans stands in stark contrast to its stinginess toward the average wage earner as well as its very real damage to taxpayers in high-cost states. Average wage earners who would get modest tax cuts in the early years would see them evaporate into thin air after 2025. Homeowners and others in high-cost states like California, New Jersey and New York would see their once-sizable deductions for state and local taxes shrink to a maximum of $10,000 a year, which could in turn reduce home values. Further, the tax bill would permanently change how tax brackets are adjusted for inflation so that more people would be pushed into higher tax brackets over time even if they received only modest raises in salary.

356COMMENTS

Details aside, here in broad numbers is the bill’s impact 10 years from now, according to the Urban-Brookings Tax Policy Center: Nearly 70 percent of families with incomes of between $54,700 and $93,200 a year would pay more in taxes than they would under current law. By contrast, 92 percent of families whose incomes put them in the top 0.1 percent of the country would get a tax cut averaging $206,280.

This bill is bad enough. No less revolting is the dishonest and sneaky way it was written.

Mitch McConnell’s tax plan slammed tiny Berea College; nevertheless, he persisted

(THIS ARTICLE IS COURTESY OF THE LEXINGTON KENTUCKY CURRIER JOURNAL)

 

Mitch McConnell’s tax plan slammed tiny Berea College; nevertheless, he persisted | Joseph Gerth

https://uw-media.courier-journal.com/video/embed/108794256?sitelabel=reimagine&platform=desktop&continuousplay=true&placement=uw-smallarticleattophtml5&pagetype=story

In a White House press conference, President Trump, Mitch McConnell, Paul Ryan and other republican leaders celebrated the passage of a new tax plan. USA TODAY

Mitch McConnell is a stickler for rules.

Heck, he’s even a stickler for rules that don’t exist. Like the one about not considering Supreme Court appointments in an election year.

That’s why it seems so, well, so hypocritical of him to write a letter to Courier Journal whining that we shouldn’t blame him for his tax reform bill that will cost Kentucky’s tiny Berea College as much as $1 million dollars a year in additional taxes.

See, McConnell proposed his tax reform bill that was designed to get at some of the money that is being stashed away at liberal universities like Yale and Harvard.

When he learned that the bill would also ensnare Berea, which educates poor mountain students for free, he tried to exempt the college located in Madison County, leaving all other private colleges with large endowments to pay the freight.

Trouble is, the Senate parliamentarian ruled that his effort to carve out Berea violated the rules.

So, surely, McConnell stopped the process and vowed to get it right. Right?

Nope.

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To paraphrase ol’ Addison Mitchell McConnell: He had appeared to violate the rule, He was warned. He was given an explanation. Nevertheless, he persisted.

Yep, he steamed right ahead, despite the fact that he knew his tax bill would mean that Berea will have to cut the number of scholarships it gives to poor students and cut the number of poor students educated, just so McConnell and his millionaire and billionaire buddies get a big tax break.

Oh, you’ll get one too.

It will be smaller. Much smaller.

And there will be tax breaks available to the extremely wealthy that aren’t available to you. And the federal deficit will rise, requiring Congress to slash programs that mean a heck of a lot more to you and your families than to the extremely wealthy.

But hey.

No biggie. Right?

Instead of deciding that the Senate would stop the process, rewrite the bill, fix it, do it right, vote on it early next year, McConnell forged ahead.

Part of that was to give President Donald Trump a victory in his first year as president but part of it was likely to get around the problem of a smaller GOP majority in the Senate when Democrat Doug Jones, of Alabama, is sworn in to replace Republican Luther Strange.

And McConnell is nothing if not consistent when it comes to making sure important legislation is acted upon quickly before there is a midterm change in Senate makeup.

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You remember back in 2010, when he demanded that the Senate deal with Obamacare legislation before Republican Scott Brown was seated to replace the late Sen. Ted Kennedy of Massachusetts, don’t you?

Nope?

Oh, yeah. That didn’t happen.

Sorry about that.

OK, so let’s get this straight.

Tax bill hurts Kentucky College. McConnell’s attempted fix violates Senate procedures. He pushes it through anyway because, well, politics.

Now, what to do?

Blame Democrats.

That’s right. And in this case, a Democratic Socialist. Bernie Sanders.

Sure, he’s got a Republican majority in the Senate. Sure, he’s the most powerful man in the Senate. Sure, he’s got a Republican as vice president who would break a tie in the Senate in the case that he lost a couple of votes.

Sure, he used a parliamentary move called “reconciliation” that allowed him to pass  legislation without threat of a filibuster – something that he screamed long and loud about when Democrats used it to pass the Affordable Care Act.

Sure, he voted for it, as did Rep. Andy Barr, the Republican from Lexington who has Berea College in the district. Sure, not a single Democrat in the Senate voted for his tax bill.

But it’s the Democrats’ fault that McConnell’s tax bill is poised to cost Berea College a million dollars a year and force it to cut services to bright kids from the mountains who otherwise won’t have a chance to attend college?

The fact is that McConnell is to blame. He had appeared to violate the rule. He was warned. He was given an explanation. Nevertheless, he persisted.

Joseph Gerth’s column runs on most Sundays and at various times throughout the week. He can be reached at 502-582-4702 or by email at [email protected] Support strong local journalism by subscribing today: www.courier-journal.com/josephg.

Tax Bill Lets Trump and Republicans Feather Their Own Nests

(THIS ARTICLE IS COURTESY OF THE NEW YORK TIMES)

 

Photo

CreditTom Brenner/The New York Times

To understand the cynicism and mendacity underlying the Republican tax bill, look no further than a provision that would benefit President Trump and other property tycoons that is in the final legislation Congress is expected to vote on this week.

The provision would allow people who make money from real estate to take a 20 percent deduction on income they earn through limited liability companies, partnerships and other so-called pass-through entities that do not pay the corporate tax. The beneficiaries would also include members of Congress like Senator Bob Corker, who last week decided he would vote for the bill even though Republican leaders did nothing to address his concerns about an exploding federal deficit.

The biggest winners would be people like Mr. Trump, his family and similarly advantaged developers who make tens or hundreds of millions of dollars every year on swanky office towers and luxurious apartment buildings. An earlier version of the bill passed by the Senate provided a 23 percent deduction but put limits on its use that would prevent wealthy developers from profiting from it. The House version would simply have reduced the rate at which pass-through income is taxed.

Republican leaders and Mr. Corker, who owns a real estate partnership in Tennessee, say the new loophole was not put in place to win over his vote. Mr. Corker has become more important because his party can afford to lose only two votes, and Senator John McCain will be absent because of the aftereffects from his cancer treatment.

Republicans insist, further, that the provision was not “airdropped” — Mr. Corker’s term — into the tax bill during conference committee negotiations, and that its main purpose was to make sure pass-through businesses were not treated unfairly because corporations would be getting a big tax cut to 21 percent, from 35 percent now. Whatever the Republicans’ protestations, this malodorous loophole is further confirmation that congressional leaders are doing everything they can to maximize benefits for the wealthy at the expense of almost everybody else.

As for Mr. Trump, he has been going around saying the tax bill would “cost me a fortune” and his accountants “are going crazy now.” This claim has always been “fake news.” But with the new loophole it has become even more nonsensical. Having done nothing to drain the Washington swamp, the president now luxuriates in its warm waters.

Continue reading the main story

All told, the 20 percent deduction for pass-through income would cost the government $414.5 billion in lost revenue over 10 years, according to Congress’s Joint Committee on Taxation. To put that number into context, it is about 29 times as much as the roughly $14 billion a year that the federal government spends on the Children’s Health Insurance Program, which covers nearly nine million kids from low-income families. Congress let authorization for that program lapse at the end of September.

The tax bill’s generosity toward real estate titans stands in stark contrast to its stinginess toward the average wage earner as well as its very real damage to taxpayers in high-cost states. Average wage earners who would get modest tax cuts in the early years would see them evaporate into thin air after 2025. Homeowners and others in high-cost states like California, New Jersey and New York would see their once-sizable deductions for state and local taxes shrink to a maximum of $10,000 a year, which could in turn reduce home values. Further, the tax bill would permanently change how tax brackets are adjusted for inflation so that more people would be pushed into higher tax brackets over time even if they received only modest raises in salary.

356COMMENTS

Details aside, here in broad numbers is the bill’s impact 10 years from now, according to the Urban-Brookings Tax Policy Center: Nearly 70 percent of families with incomes of between $54,700 and $93,200 a year would pay more in taxes than they would under current law. By contrast, 92 percent of families whose incomes put them in the top 0.1 percent of the country would get a tax cut averaging $206,280.

This bill is bad enough. No less revolting is the dishonest and sneaky way it was written.

THE REPUBLICAN TAX FRAUD AGAINST THE NON TOP 1% RICHEST

(THIS ARTICLE IS COURTESY OF THE WASHINGTON POST)

 

As tax plan gained steam, GOP lost focus on the middle class


A statue of George Washington stands in the Capitol. (Andrew Harrer/Bloomberg)
 December 9 at 7:16 PM
The GOP tax plan on the cusp of becoming law diverges wildly from the promises President Trump and top advisers said they would deliver for the middle class — an evolution that shows how traditional Republican orthodoxy swamped Trump’s distinctive brand of economic populism as it moved through Washington.The bill was supposed to deliver benefits predominantly to average working families, not corporations, with a 35 percent tax cut Trump proposed on the campaign trail as part of the “Middle Class Tax Relief and Simplification Act.”

“The largest tax reductions are for the middle class, who have been forgotten,” Trump said in Gettysburg, Pa., on Oct. 22, 2016.

But the final product is looking much different, the result of a partisan policymaking process that largely took place behind closed doors, faced intense pressure from corporate lobbyists and ultimately fell in line with GOP wish lists.

As top lawmakers from the House and the Senate now rush to complete negotiations to push the tax plan into law, it amounts to a massive corporate tax cut, with uneven — and temporary — benefits for the middle class that could end up increasing taxes for many working families in future years.

 3:19
5 tax issues Republicans need to resolve in conference

Now that the Senate and the House have passed two tax bills, there are some crucial differences they need to resolve in conference.

All told, the plan would cut taxes for businesses by $1 trillion, would cut an additional $100 billion in changes to the estate tax for the wealthy, and spreads the remaining $300 billion over 10 years among all households at every income level.

White House officials defend the tax bill emerging from the House and Senate negotiations, saying it follows through on Trump’s long-held promise of benefits for the middle class through a combination of exempting more income from taxation, expanding a tax credit benefiting families and cutting business taxes in a way that will flow through to workers in the form of higher wages.

“The middle class gets a tremendous benefit,” Trump said Wednesday.

Yet a review of more than 40 public statements that stretch back to the 2016 campaign and interviews with key officials in the White House and Congress shows how Trump and his top advisers have continuously prioritized corporate cuts — even though they have promised that middle-class cuts would be their focus.

Over several months, tax cuts for families were either stymied or scaled back. And corporate benefits only grew, a development that increasingly made some Republicans nervous as they saw the bill’s true impact.

“Fundamentally, the bill has been mislabeled. From a truth-in-advertising standpoint, it would have been a lot simpler if we just acknowledged reality on this bill, which is it’s fundamentally a corporate tax reduction and restructuring bill, period,” said Rep. Mark Sanford (R-S.C.). “I think they were particularly concerned about innuendo and what that might mean, so it was labeled as a middle-class tax cut.”

Big promises

After Trump was elected, his transition advisers faced immediate questions about whether he’d hold true to his promise of a tax cut focused on the middle class.

They could not have been clearer.

“Any reductions we have in upper-income taxes would be offset by less deductions, so there would be no absolute tax cut for the upper class,” Steven Mnuchin, Trump’s national finance chairman and future Treasury secretary, told CNBC.

Sen. Ron Wyden (Ore.), the ranking Democrat on the Senate Finance Committee, dubbed it the “Mnuchin Rule.”

After Trump was sworn in, his top aides immediately began discussions with House and Senate leaders on how to combine his campaign promises with long-held GOP views that cutting taxes for the wealthy and corporations ultimately benefit workers.

Inside the White House, Trump was being urged by his chief strategist, Stephen K. Bannon, a key voice behind the president’s economic populism, to hit the very wealthy.

At a meeting in April, Bannon urged that the Trump tax plan create a new 44 percent tax rate on income above $5 million, said three people briefed on his proposal who weren’t authorized to talk about Oval Office discussions. He argued that this was a way to ensure that the wealthiest Americans didn’t benefit too much from any changes and that working-class Americans could support the proposal.

Bannon “pushed that for several weeks as a way to gather political support for the tax bill. He’s more of a populist, obviously,” said Steve Moore, a conservative economist who helped Trump craft his tax plan during the campaign.

Mnuchin and National Economic Council Director Gary Cohn, both former bankers at Goldman Sachs, argued against the 44 percent tax rate, saying such a high rate would harm investment, pile up costs for small businesses and ultimately hurt growth.

As Trump neared his 100th day in office in late April, he was becoming restless because he didn’t have a concrete tax plan.

So he ordered Cohn and Mnuchin to present a version of the tax plan to the public by April 26. They scrambled to put together a one-page blueprint that called for lowering tax rates on all Americans and exempting more income from federal income taxes. The document said it would “provide tax relief to American families — especially middle-income families.”

But there was no mention of a 44 percent rate. Rather, the document revealed other clues that foreshadowed how the tax plan would take shape. It called for eliminating the estate tax and the alternative-minimum tax and lowering the top income tax rate — changes that would all benefit the wealthy.

As they faced questions about those provisions, White House officials began to walk back the promises about the wealthy not winning in the tax plan.

“What I said is the president’s priority has been not cutting taxes­ for the high end,” Mnuchin said in May at the Peter G. Peterson Foundation’s 2017 Fiscal Summit. “His priority is about creating a middle-income tax cut. So we’ll see where it comes out.”

Abandonment

Just after midnight on July 28, Sen. John McCain (R-Ariz.) shocked the Republican Party by voting to end a GOP effort to repeal the Affordable Care Act (ACA).

The summer had made at least two things painfully clear to Republican leaders.

There was virtually no hope of getting Democrats, even red-state moderate Democrats such as Sen. Joe Donnelly (Ind.) or Sen. Joe Manchin III (W.Va.), on board with the plan. That meant Republicans were going to have to make it on a party-line vote, and, as the ACA experience had reminded them, they had only two votes to spare.

So leaders began to make a priority of what they thought the entire party could rally around: big corporate tax cuts. The idea of reducing tax rates on American businesses had been core to the identity of the Republican Party ever since President Ronald Reagan did it as part of a comprehensive tax overhaul in 1986.

Within the White House, Cohn and Mnuchin were running the show. Bannon, a deeply controversial figure in the administration, had left, a voice for a more populist tax plan exiting with him.

On Sept. 27, the White House and GOP leaders issued another tax blueprint, this one called the “Unified Framework for Fixing Our Broken Tax Code.” It proposed reducing the current seven brackets in the individual tax code to as few as three, dropping the corporate tax rate from 35 percent to 20 percent, and creating a new rate of 25 percent for millions of companies that pass their income through to partners and sole proprietors, changes that could help small businesses but also law firms and professional sports teams.

Nonpartisan tax experts estimated the vast majority of the plan’s benefits would flow to the wealthy. Trump, by contrast, insisted that it would help the average worker.

“Our framework includes our explicit commitment that tax reform will protect low-income and middle-income households, not the wealthy and well-connected,” Trump said on the day of the plan’s release. “They can call me all they want. It’s not going to help. I’m doing the right thing, and it’s not good for me. Believe me.”

His advisers couldn’t say the same.

“When you’re cutting taxes across the board,” Mnuchin told Politico, “it’s very hard not to give tax cuts to the wealthy with tax cuts to the middle class.”

Seeking balance — and failing

Until now, Republicans had the benefit of not explaining how they’d pay for their tax overhaul, which was going to cost trillions of dollars without offsets. Ultimately, Republicans agreed to borrow up to $1.5 trillion to finance the tax cut.

The $1.5 trillion ceiling on borrowing would ultimately force Republicans to make tough trade-offs between helping the middle class on the one hand and the wealthy and corporations on the other.

In writing their bill, House GOP leaders had created a new $300 “family flexibility credit” that could help Americans lower their taxable income. It wasn’t large, but it would be widespread — and an easy way for Republicans to show they were trying to help the middle class.

But the night before they would release the bill, when top tax writer Kevin Brady (R-Tex.) was trying to sort out the tax changes and monitor the performance of his Houston Astros in the final game of the World Series, they made a major change to this provision, according to a person briefed on the changes who was not authorized to discuss private congressional deliberations.

Corporations were concerned their tax cut would last only eight years, a limitation that was necessary to keep the bill under the $1.5 trillion limit. Brady agreed. So in a last-minute decision, Republicans cut the duration of the family tax credit in half — ending it after only five years — to make the corporate tax cut permanent.

In effect, Republicans handed $200 billion from families to corporations. (GOP aides said, however, that the situation was fluid and that they always had hoped to make the corporate rates permanent.)

On Nov. 16, the House passed the tax overhaul, 227 to 205.

Senate doubles down

The Senate would take the principle of Brady’s last-minute move and extend it further by making virtually all of the tax cuts for families and individuals sunset after 2025.

GOP leaders tried to explain this discrepancy by saying they needed to give businesses long-term assurances about the tax environment so they could invest and make plans, but it fed into allegations from Democrats that the package was meant for businesses and the wealthy, not the middle class.

“We had to thread the needle,” Senate Majority Leader Mitch McConnell (R-Ky.) said in an interview. “Why did we make it permanent for corporations? Because they have to make investment decisions.”

Senate Republicans had hoped to pass their tax cut bill on Nov. 30, but there was a last-minute­ insurrection led by Sen. Bob Corker (R-Tenn.), who was concerned about the impact of the bill on the federal deficit.

Corker’s queasiness forced GOP leaders to search elsewhere for assurances that they had the votes to pass it, and that led them into the expensive demands of Sen. Ron Johnson (R-Wis.).

Johnson wanted a significant expansion of “pass through” tax cuts that benefit business owners who pay their taxes through the individual code. Although he and others described the beneficiaries of the pass-through rate as primarily small businesses, nonpartisan tax experts say it mainly benefits the top 1 percent of earners.

Ultimately, Johnson managed to extract an additional $114 billion in tax cuts for these entities out of GOP leaders.

Meanwhile, Republican Sens. Marco Rubio (Fla.), Mike Lee (Utah) and Susan Collins (Maine) were pushing proposals that would expand a child tax credit for working families, offsetting the cost by slightly bumping up the corporate tax rate.

“You’re telling me that if we have a corporate tax rate that goes from 35 percent to 20.94 percent, that [will] hurt growth?” Rubio asked on the Senate floor. “Twenty percent is the most phenomenal thing we’ve ever done for growth, but if you add 0.94 percent to that, it’s a catastrophe? We’re going to lose thousands of jobs? Come on.”

His amendment was voted down 71 to 29, and the bill’s other tax changes were still alluring enough to attract Rubio’s, Lee’s and Collins’s support in the final vote. Only one Republican, Corker, voted against the measure, out of concern that it would drive up the deficit.

A complete picture

GOP leaders are now working to resolve differences between the House and Senate bills, but the broad contours have come into focus.

The legislation would lower taxes for many in the middle class, but mostly temporarily, and fall far short of the 35 percent cut for everyone in the middle class that Trump promised last year.

For example, the nonpartisan Tax Policy Center has estimated that in 2019, a household earning between $50,000 and $75,000 would save $780 a year if the Senate bill’s changes become law. This is essentially an 8.9 percent tax cut.

Beginning in 2023, households that bring in less than $30,000 would all average a tax increase, according to the nonpartisan Joint Committee on Taxation, Congress’s official scorekeepers. And by 2027, all income groups that earn less than $75,000 would see their taxes go up. That’s because although the bill allows all the individual tax code provisions to expire, it retains a less generous method of calculating inflation than are currently in use, which effectively pushes workers into higher tax bracket faster.

Larry Kudlow, who advised Trump during the 2016 campaign and is a big supporter of the tax cuts for businesses, said the changes for individuals and families amounted to a “mishmash.”

Asked if the tax package in aggregate would mean a middle-class tax cut, Edward Kleinbard, a former chief of staff for the Joint Committee on Taxation, said: “That’s delusional or dishonest to say. It’s factually untrue.”

He added, “The only group you can point to that wins year after year and wins in very large magnitude is the very highest incomes.”

White House officials defend the temporary nature of many of the tax cuts, saying they will inevitably be extended by a future president and Congress because they are politically popular. They also say the tax savings for middle-class families would be much larger than outsiders have suggested, particularly when factoring in an expansion of a tax credit for working families.

Still, on Wednesday, for the first time, Trump acknowledged that some Americans may not benefit from the tax package, and he said they would try to make last-minute changes. But he didn’t specify what they might be.

“There are very, very few people that aren’t benefiting by it, but there’s that tiny little sliver, and we’re going to try to take care of even that very small group of people that just through circumstances maybe don’t get the full benefit of what we’re doing,” he said at a meeting with his Cabinet. “But the middle class gets a tremendous benefit, and business, which is jobs, gets a tremendous benefit.”

Erica Werner and Paul Kane contributed to this report.

Republican Tax Plan Is Designed To Raise Working Class Peoples Taxes?

(I GOT THIS LITTLE ARTICLE FROM A GOOD FRIEND OF MINE ON FACEBOOK AND HE GOT IT FROM THE NEWS GROUP ‘LIBERAL EXAMINER’)

 

John Harvey shared Liberal Examiner‘s post.

1 hr · 

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GOP’s New Tax Scheme Revels The Scam At Its Core

(THIS ARTICLE IS COURTESY OF THE WASHINGTON POST)

 

The Plum Line

GOP’s new scheme to save Trump’s tax plan reveals the scam at its core

 November 28 at 10:13 AM

(Jabin Botsford/The Washington Post)

THE MORNING PLUM:

Amid the final push to pass the Senate tax plan, which is at a make-or-break moment today, Republicans have now hatched two separate schemes, each designed to win over a different bloc of undecided senators. But the two maneuvers could contradict each other — and the contradiction would neatly reveal the big scam at the heart of this whole enterprise.

Several deficit-hawk senators, such as Bob Corker (R-Tenn.) and Jeff Flake (R-Ariz.), are demanding that some kind of “trigger” be added to the bill, which would raise taxes later if the plan’s tax cuts end up adding to the deficit. The bill would boost the deficit by $1.4 trillion in the short term. Some Republicans have argued that the spectacular growth unleashed by the plan would offset that, but Corker and company (and many economists) are skeptical; hence the demand for a tax-hike trigger. As of now, how this trigger would work, and whose taxes would go up, are unspecified.

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At the same time, Senate Republicans are currently looking at ways to make the bill more generous to owners of “pass-through” businesses, to win over holdouts Ron Johnson of Wisconsin and Steve Daines of Montana. Research has shown that most pass-through income goes to the top 1 percent: As the New York Times put it, to win them over, Republicans are “increasingly tilting” their plan “to benefit wealthy Americans.”

 2:10
Why the GOP deficit hawks sound a little less hawkish lately

The Washington Post’s Damian Paletta looks at the arguments that Republicans are using to promote their tax overhaul.

But here’s the rub of the matter: As one tax analyst tells me, if Republicans make the plan more generous to the wealthy by doing more for pass-throughs (to win over some senators), this would also add to the deficit (which should drive away the others). And this leads us right back to the con at the heart of this whole affair.

The center of the Senate GOP tax plan is a large permanent cut to the tax rate paid by corporations. These would themselves overwhelmingly benefit the wealthy, because the vast majority of their benefits would go to shareholders and capital. But Republicans face two challenges. The first is to sell this primarily as a middle-class tax cut, so voters accept it. They do this by front-loading a bunch of preferences for the middle class along with cuts to individual rates across the board. The second challenge is to do this while simultaneously making the case that the plan would not balloon the deficit, to hold on to deficit-hawk senators and because if it raises the deficit in the long term, procedural it can’t pass by simple majority with only Republican votes. Republicans address this problem by ending all the middle-class preferences and individual rate cuts after 2025.

But the problem is that the second imperative undermines the first. Because the middle-class benefits must be temporary to avoid busting the long-term deficit, analyses have found that in the long run, it would shower enormous long-term benefits on the rich while the benefits to the middle class fade away and taxes go up later for many less-fortunate earners. The whole point of back-loading the losses on to that latter group later is to prevent the permanent corporate tax cuts from ballooning the long-term deficit, allowing a huge permanent tax cut overwhelmingly benefiting the rich to pass with no Democrats.

The two new maneuvers Republicans are now contemplating both typify and exacerbate this core problem. Senators who want the plan to be more generous to pass-throughs saythey want the small businesses in their ranks (there are some) to get equivalent treatment to wealthy corporations. But Joseph Rosenberg, a senior research associate at the Tax Policy Center, tells me that this itself would add to the deficit.

“Changes that would make the pass-through provision more generous would further increase the cost of the bill and the deficit,” Rosenberg emailed me. What’s more, Rosenberg notes that such a change would likely be something the wealthy in particular can take advantage of, because they’d be more inclined and able to reclassify their income as pass-through. As “taxpayers look for opportunities to take advantage of the tax benefit,” Rosenberg says, this would “disproportionately benefit higher-income households.”

For all of this to go through, consider the most likely way it would happen: The deficit hawks would have to accept a plan that on paper does balloon the deficit in the short term, on the basis of triggers that allow them to claim tax hikes will kick in if growth doesn’t offset that. (Either these triggers remain unspecified, or Republicans will be declaring that some specific groups may be hit with tax hikes later.) Meanwhile, to make conservatives happy, the plan would have to include still more benefits for the rich under the guise of mainly helping small businesses.

All that could very well happen. But if so, it will just underscore how many different ruses are necessary to paper over the basic con at the center of it all: Republicans are giving the wealthy a large permanent tax cut while selling it as mainly a large middle-class tax cut andas something that won’t bust the deficit.

Update: Reporter Steven Dennis points out that Johnson and Daines are proposing to pay for their idea of making the bill more generous to pass-throughs by doing away with some deductions enjoyed by corporations.

But Seth Hanlon, a tax analyst with the Center for American Progress, tells me that we should not presume this offset will prove to be real until we actually see it in the bill and it’s subjected to serious scrutiny. If not, Republicans would have to find the money to pay for this elsewhere, or it would increase the deficit.

Beyond this, the broader point still holds: The underlying problem here has always been that Republicans are trying to push a permanent tax cut that would overwhelmingly benefit the rich, while selling it as primarily a middle-class tax cut and claiming it won’t bust the deficit.

* TAX CHANGES WON’T DO MUCH FOR MIDDLE CLASS: Even as the plan is being changed in ways that will further reward the wealthy, the New York Times reports that Senate GOP leaders aren’t that interested in helping another group of taxpayers:

Mike Lee of Utah and Marco Rubio of Florida, for example, appear to be making little progress in persuading party leaders to expand access to the child tax credit for low-income families, by allowing the credit to be refundable against payroll tax liability. Such a move would allow working parents who do not currently face income tax liability to still benefit from the expanded credit envisioned in the bill.

Per usual, it appears the changes are geared toward winning over conservative holdouts, because Republicans who say they want a less regressive bill can be counted on to vote “yes” in the end.

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