PER TRUMP: "HEALTHCARE & TAX REFORM WILL BE EASY!.....RIGHT!"

…Americans are paying for Trump never understanding the details of his own plans.

 

Before his healthcare bill died, Trump was still asking his staff, “Is it a good bill?”

 

One writer for the Washington Post wrote about President Trump: “You thought tax reform would be an easy win for Trump Republicans?  Ha Ha!  Oh, it feels good to laugh again.”

 

Yes, it’s true that Donald Trump as usual, did not take the time to fully understand what the American Healthcare Plan offered up by Paul Ryan and company actually did for all Americans.  But even though that was the case, he still worked hard in trying to get it passed.  He kept telling the American public how much better it was than the ACA, (Obamacare), which even his own party knew it was a total lie.

 

The House Freedom Caucus, (AKA the former Tea Party) knew that the Ryan plan wasn’t a good repeal and replacement for the ACA and they voted against it.

 

Even though the Democrats took a year to bring the ACA to a vote, Trump and company tried to get a replacement healthcare bill passed in less than 60 days.  Oh yes, it had been discussed in GOP meetings for some months, but it was never made public for all the Americans that would be affected to understand the plan.  They eventually learned, which health issues would be better, and which would be worse, which was what most of the Ryan bill was for the poor and the elderly.  But Trump never took the time to fully understand how bad the Ryan plan was for his base.

 

After the Obamacare-repeal and replace disaster, President Trump immediately decided to move on to tax reform. He’s now hoping to quickly restore what public faith he had received regarding his leadership, which has so far been stymied by federal judges, the House Freedom Caucus and unfortunately for the president…..the basic math of his plans.

 

As it usually is with Mr. Trump, many of those same problem issues with healthcare, they will also be a problem for his bogus tax plan.

 

As with healthcare, the main issues for tax reform will involve painful trade-offs and there will be a bunch of angry interest groups that will work to obstruct any changes.  That’s not to mention the old procedural rules that relate to the arcane Senate governing rules of the filibuster.

 

However, the biggest hurdle is not about technicalities or political transactions. And for Trump, this is a biggie.  It’s about the substance of his former campaign promises. As with healthcare, the Trump administration has made too many contradictory, and mutually exclusive promises that will be impossible to keep.  Specifically, Trump’s many off-the-wall promises about what’s going to happen to wealthy people’s taxes.

 

“The rich will pay their fair share,” Trump had made this promise to his supporters during the campaign.  Especially when he continually railed against upper-class greed and special-interest tax breaks.

 

Treasury Secretary Steven Mnuchin has since repeatedly pledged that the administration would offer economy-transforming tax cuts for the working class. Any tax-rate cuts for the wealthy, on the other hand, per Mnuchin, would be fully canceled out by closing their deductions, credits and other loopholes.  Basically he says the wealthy will pay the same amount they are paying, maybe more!  “There will be no absolute tax cut for the upper class,” Mnuchin promised.

 

This guarantee, unlike those promises from the other Republicans, the president said he did not plan to cut taxes on the rich.  This was such a bold and unusual Republican promise that it even earned a nickname. At Mnuchin’s confirmation hearings, Sen. Ron Wyden (D-OR) dubbed it the “Mnuchin rule.” In a CNBC interview, Mnuchin actually expressed pride at being the namesake of an official “rule,” blithely remarking that this put him in the company of Paul Volcker and Warren Buffett.  Of course, if you actually look at Trump’s tax plan, you’ll plainly see that this so called “rule” was made to be broken.

 

The written Trump tax plan released last fall, which Mr. Mnuchin helped author, it includes enormous “absolute tax cuts for the rich”, even after accounting for the elimination of deductions and credits. In fact, according to an analysis by the nonpartisan Tax Policy Center, Trump’s plan “would give rich people the biggest tax cuts of any income group.”

 

Regardless of how you slice it, the top 1% of American taxpayers will get the biggest cut in dollar terms, as a percentage of their incomes and as a percentage of total tax cuts. They will receive nearly half the total tax cuts under Trump’s plan, and three-quarters of all the cuts as stated under the House GOP plan.

 

The only semi-concrete example that Trump has offered of how he would force a tiny subset of rich people to pay their “fair share” is his proposal to close the so-called “carried interest” loophole.

 

But that’s the "semi-concrete" example simply because it’s a lie.  And that’s because “carried interest” refers to the part of the client profits that is collected by managers at certain kinds of investment funds such as private equity and venture capital funds.  It’s basically just a performance fee. But under current law, that fee gets taxed at long-term capital gains rates of 20% rather than at the ordinary wage rate of 39.6 %.

Trump has pledged to close this loophole by treating “carried interest” as ordinary income.  Now, don’t get me wrong, this is great, and it is much fairer than the current state of affairs. At least it would be fair if Trump didn’t offer these same taxpayers a much, much more valuable tax cut.

 

If you dig deep, buried down in Trump’s tax plan is a provision allowing owners of pass-through businesses which include sole proprietorships, partnerships and S-corporations to be taxed at a flat rate of 15% rather than the higher, regular individual income-tax rates. The investment fund partnerships that currently benefit from preferential rates on “carried interest” would qualify for this special pass-through 15% rate. 

 

In other words, Trump claim that he’ll “Drain the Swamp” and soak Wall Street is all bogus.  He’s really just allowing investment fund managers to swap one preferential tax rate for another....an even lower one. He’s cutting their taxes, not raising them.

 

So, as it was with his promises about repealing and replacing Obamacare with something better, covering more people and costing less while offering more choices, that was totally bogus.  So too will be his tax plan that will collide with Trump's lack of reality regarding his priorities.

 

I guess some things, and some people, never change.

 

Copyright G.Ater  2017