Tuesday, September 29, 2015

Jeb Admits Tax Plan will make Richer Richer

More proof that Jeb Bush may care not so much for this country as he does for the very rich. Besides gutting government regulations, he also wants to cut taxes — the standard Republican mantra, (just like his brother George), so no surprises there. But why would Jeb lie about his tax plan on a Sunday when the Pope was still in town?

Jeb! defended his tax plan on Fox News Sunday after he was slammed for giving lopsided tax breaks to the wealthy. He told Chris Wallace: “The simple fact is 1 percent of people pay 40 percent of all the taxes. So of course, tax cuts for everybody is going to generate more for people that are paying a lot more. I mean that’s just the way it is.”

Watch the 3-minute YouTube clip below; and listen very carefully to the words he chooses and how he uses them — especially towards the end (You can watch the full interview at Fox News here.)

Normally a typical politician (when they don't accidentally tell the truth) will deny, deflect, discredit, exaggerate, embellish, obfuscate and lie. But Jeb Bush had accidentally told the truth. In Jeb Speak he had said: "Of course the rich will get richer ... that's just the way it is." (That's just the way it is, since the Earth and Heavens were first created.)

Jeb Bush didn't mention that the reason why 1 percent of the people who pay 40 percent of the taxes is because they are also raking in 40 percent of all the income too (when taxation is supposed to "progressive"). As a "percentage" of all their income, the poor actually pay more in taxes. So why didn't Jeb Bush also mention that? Maybe it's because, just like Mitt Romney, he's also afraid the poor will want more "free stuff".

Jeb Bush also neglected to mention (BTW: all his omissions are the same as lies) that the very top 0.1 percent and the very top 0.01 percent (the top 1 percent of the top 1 percent) are the ones who actually rake in most of that income — and that they are the only ones that (progressive) Democrats want to raise taxes on (maybe by taxing capital gains income from investments the same way as regular wages are taxed for labor — and maybe by having the top 1 percent pay Social Security taxes on 100% of their income, the same way as 90% of all other wage earners currently do.)

Here's what Jeb didn't tell us about that one percent:

According to Jeb Bush, the top 1 percent pays 40% of the tax, but they have also been extracting and hoarding most of the income — and have been, for the past 40 years.

The top1 percent - the top 0.1 Percent - the top 0.01 percent

Like all Republicans, besides cutting the capital gains tax rate for the top 0.01 percent, Jeb Bush also wants to lower the corporate tax rate (on businesses that generate most of the capital gains) — even though many major U.S. corporations (under the current tax law with write-offs and deductions) only pay about half the current statutory tax rate — and that doesn't include those that pay no tax at all. The "effective" tax rate that corporations pay, executives use as "selling points" in their annual reports to justify huge pay raises for themselves, figuring: "Since we don't have to pay the government, let's pay ourselves instead!"

So far US corporations have already stashed $3.8 trillion — and that's AFTER paying themselves and other shareholders. But wasn't more economic growth, higher profits and less taxes supposed to "trickle-down" and create more jobs and raise wages — instead of just producing huge and wasteful cash hoards? And that doesn't include all the cash hidden away in offshore tax havens — or other assets such as art, jewelry or real estate (also know as SWAG investments).

One hundred million dollars in $100 bills fits nicely onto a standard-sized pallet. The image below shows what $1 trillion in cash would look like with those pallets stacked two-high next to a football field. Now multiply that by 4 — and that is the current corporate cash hoard. U.S. corporations have not been spending on hiring people and raising worker's wages — so less taxes and/or lower tax rates proposed by Republicans will only grow this cash hoard much larger. And that's exactly what Jeb Bush wants to do.

$1 trillion

Many people are blaming the Great Recession for the current economy, where CEOs are raking in millions of dollars every year as stocks and profits soar, while everyone else is struggling. But the decline of the working-class has been going on for decades. Jeb Bush (and all the other Republicans, including many "moderate" Democrats) just want more of the same.

productivity vs. wages

Yesterday Donald Trump also unveiled his tax plan. From CNN:

"One of the biggest beneficiaries appears to be families that draw the smallest paychecks. Individuals that make less than $25,000 (and $50,000 for married couples) would pay no income taxes under Trump's plan ... However, the proposal would also be a boon for the wealthiest Americans like Trump."

In a war of numbers on GDP with Jeb Bush, Trump also claims his plan will boost the economy by 6%compared to Jeb's claim of 4%. In the real world, Q2 GDP was recently revised to 3.9%, but where were the wage increases? Just "growth" alone and tax cuts won't create jobs or raise wages. For a good examination of "growth and taxes", read this great post at Mark Thoma's blog: "The Growth Fairy".

Here's more from The Atlantic about Trump's tax plan:

"The top marginal income rate would drop to 25 percent from nearly 40 percent, middle-income earners would pay 10 or 20 percent, and anyone earning less than $25,000 a year ($50,000 for married couples) would pay no income tax at all. Trump would scrap the marriage penalty, the estate tax, and the alternative minimum tax. Businesses would pay no more than 15 percent of their income to the government."

Currently the "statutory" corporate tax rate is 35%, and Trumps wants it to be 15%. And Trump also wants a one-time repatriation of offshore corporate profits taxed at 10% — which we already know will only be redistributed to shareholders, rather than for reinvestment in the U.S. for domestic hiring and wage increases. (Read Robert Reich's Why we must end upward pre-distributions to the rich).

And Trump, just like all Republicans, wants to eliminate the tax on inheritances (a.k.a. The Death Tax, even though dead people don't pay taxes). A married couple can already leave the first $10 million tax-free to their children (so maybe Trump wants his entire $10 billion fortune to go to his daughter Ivanka tax-free.) From the IRS:

"Most relatively simple estates (cash, publicly traded securities, small amounts of other easily valued assets, and no special deductions or elections, or jointly held property) do not require the filing of an estate tax return. A filing is required for estates with combined gross assets and prior taxable gifts exceeding $5,430,000 [per parent] in 2015."

Last night a pundit on Sean Hannity (Fox News) said "a lot of people" would be happy about a repeal of the estate tax; but 99.8 percent of all estates already owe no estate tax at all. It's mostly the multi-billionaires on the Forbes 400 list who would benefit from repealing this tax (e.g. Bill Gates, Warren Buffett, the Wal-Mart heirs, the Koch brothers, Donald Trump, etc.)

But even the estate tax is sometimes avoided with other loopholes — such as the step-up in basis at death for capital gains taxes and perpetual dynasty trust funds. If there is a loophole, an army of tax attorneys will find it. And if there isn't a loophole, the rich will lobby Congress for one.

Trump previously mentioned eliminating the "carried interest" loophole for hedge fund managers, but a New York Times article also says "Trump Plan is Tax Cut for the Rich, Even Hedge Fund Managers". And little if anything was specifically mentioned about the "capital gains tax" in Trump's plan.

But basically, all GOP tax plans are the same — they are just worded and sold differently. They are all about tax cuts to force cuts in government spending (a.k.a. Starving the Beast) — and working people, the poor, the unemployed, the disabled and the elderly are the "beasts" that the Republicans want to starve with their "feed the rich, starve the poor" economic policies.

The typical tax strategy that most politicians usually employ is to throw a few crumbs to the middle-class and poor to pacify them — to keep them from uprising and revolting against the plutocrats; but while also giving the biggest tax breaks to the most wealthy plutocrats (similar to other bait-and-switch or Three Card Monte schemes — it's all smoke and mirrors).

Bill Clinton, after praising both his wife and Bernie Sanders for laying out their own detailed and positive policy positions, recently told CNN that he thinks Donald Trump could win the GOP presidential nomination. So no matter what Republican wins their primary, they will cut taxes for the rich if they ever become President.

Hillary Clinton "talks" about raising taxes on the rich, but Bernie Sanders definitely would — but he could only do this if he also had a Congress packed with progressive Democrats. So even if Bernie Sanders became our next President, it's extremely unlikely that the rich would ever have to pay one penny MORE in tax than they already do today.

On the other hand, with the current Congress, if any Republican becomes President in 2016, they will most definitely cut taxes for the very rich (while also cutting government programs) — and then they'll promise everyone else that they will also get a bigger slice of the pie. But they've been telling us this fairy tale for the past 40 years.

Recently in a speech about racial injustice at the Edward M. Kennedy Institute, Senator Elizabeth Warren noted:

"Republicans’ trickle-down economic theory arrived. Just as this country was taking the first steps toward economic justice, the Republicans pushed a theory that meant helping the richest people and the most powerful corporations get richer and more powerful. I’ll just do one statistic on this: From 1980 to 2012, GDP continued to rise, but how much of the income growth went to the 90% of America—everyone outside the top 10%—black, white, Latino? None. Zero. Nothing. 100% of all the new income produced in this country over the past 30 years has gone to the top ten percent."

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