By TIM ROWDEN
When President Donald Trump and Republican leaders in Congress recently released their new tax plan, a nine-page framework that includes sweeping tax cuts for individuals and businesses, with few details on how the government might pay for them.
AFL-CIO President Richard Trumka minced no words in his response.
“The tax plan Republicans put out is nothing but a con game, and working people are the ones they’re trying to con,” Trumka said. “Here we go again.
“First comes the promise that tax giveaways for the wealthy and big corporations will trickle down to the rest of us.
“Then comes the promise that tax cuts will pay for themselves.
“Then comes the promise that they want to stop offshoring.
“And finally, we find out none of these things is true, and the people responsible for wasting trillions of dollars on tax giveaways to the rich tell us we have no choice but to cut Medicaid, Medicare, Social Security, education and infrastructure,” he said.
“There always seems to be plenty of money for millionaires and big corporations,” Trumka said, “but never enough money to do anything for working people.”
A LITANY OF TERRIBLE PROPOSALS
Here are some of the terrible proposals included in the plan:
• Allowing multinational corporations to pay little to nothing on their offshore profits, which would be a giant tax break for sending jobs overseas and a giant loophole for corporations to avoid paying taxes.
According to the Institute on Taxation and Economic Policy, President Trump and Republican leaders in Congress have proposed a “territorial” tax system, which would allow American corporations to pay no U.S. taxes on most profits they book offshore. This would worsen the already substantial problem of corporate tax avoidance and result in more jobs and investment leaving the United States.
• Eliminating the estate tax, which would benefit only the wealthiest 0.2 percent of estates – those worth more than $5.5 million.
• Eliminating the alternative minimum tax, which helps keep the wealthy from exploiting loopholes to avoid paying taxes.
• Reducing the top individual tax rate from 39.6 percent to 35 percent, which would mainly benefit the rich.
• Reducing the top tax rate for business owners from 39.6 percent to 25 percent, which would mainly benefit Wall Street hedge fund managers, real estate developers and law firms.
• Reducing the corporate tax rate from 35 percent to 20 percent, which would overwhelmingly benefit the rich.
• Increasing the bottom tax bracket from 10 percent to 12 percent.
• Eliminating the tax deduction for state and local taxes, which would punish states that make the kind of investments that boost economic growth for the whole country, as well as hurt the working middle class.
“We already know that Trump and Republican leaders in Congress want working people to pay the price for these tax giveaways to big corporations and the wealthy,” Trumka said.
“We know this because the budgets they have proposed for the coming year include trillions of dollars in cuts to Medicaid, Medicare, Social Security, education, infrastructure and other programs benefiting working people.”
Working people are tired of hearing how tax giveaways for Wall Street billionaires and corporations will supposedly trickle down to the rest of us, Trumka said, adding that a tax plan that actually works for working people would have three overarching principles.
• First, Wall Street, big corporations and the wealthy must pay their fair share of taxes.
• Second, tax reform must raise enough additional revenue now and in the future to create good jobs and make the public investment we need in infrastructure, education, and meeting the needs of children, families, seniors and our communities.
• Third, tax reform must eliminate all tax incentives for corporations to shift jobs and profits offshore.
“Unfortunately, the tax plan unveiled [last week] goes in the exact opposite direction,” Trumka said. “It does not even qualify as ‘tax reform.’ It’s just tax cuts for rich people.”
‘A TOTAL MOCKERY’
Trumka isn’t the only one criticizing the President’s tax plan:
• Senator Ron Wyden (D-OR), the top Democrat on the Senate Finance Committee, called Trump’s plan “a total mockery of the president’s pledge to have tax relief for the working class, not for the wealthy.”
• Richard Fiesta, executive director of the AFL-CIO affiliated Alliance for Retired Americans, said Trump’s biggest beneficiaries would be corporations and individuals making more than $400,000 yearly. It’s “a massive tax cut” for them “on the backs of working Americans and retirees.”
• Frank Clemente, executive director of Americans for Tax Fairness, estimates the tax plan could cost $5 trillion, with most of the tax cuts going to the richest Americans and biggest corporations.
“Tax cuts for millionaires and big corporations will not trickle down to working families and Main Street businesses,” Clemente said. “It will hurt working families much more than it will help.”