A recent New York Times headline blared “Republicans Wary of Donald Trump’s Populist Tone on Taxes.”
On the one hand, this development is hilarious because he’s slamming a huge wedge into the Republican Party. On the other hand, oddly enough some (though not all!) of these tax proposals are pretty legit, at least in theory.
He has threatened to increase taxes on the compensation of hedge fund managers. And he has vowed to change laws that allow American companies to benefit from cheaper tax rates by using mergers to base their operations outside the United States.
“The one problem I have with the flat tax is that rich people are paying the same as people that are making very little money,” Mr. Trump said. “And I think there should be a graduation of some kind.”
Implementing his “ideas” is of course another matter, and he would undoubtedly do that wrong if he were actually to become president.
Previously on AFD on this topic:
– Op-Ed (for The Globalist) | Pfizer: Tax havens or bust!
– Treasury Dept acts to discourage tax avoidance mergers
– Are Trump’s bankruptcies worse than other business law manipulations?
From a 2013 Baltimore Sun piece, “Cut tax breaks, not food stamps”, how U.S. executives can save more in taxes in a single dinner than poor families can receive in food stamp money in a month:
Imagine that the tab for dinner and drinks for 10 executives comes to $1,600. Current tax law allows companies to deduct half of the cost of business meals — in this case, $800. With a corporate tax rate of 35 percent, each dollar of deductions yields 35 cents of tax savings — so that $800 deduction saves $280 in taxes. This means one dinner for 10 people provides more public food assistance than the $279 an average household receives in food stamps for the whole month.
But somehow we can’t possibly afford such programs.
h/t Wonkblog: “The rich get government handouts just like the poor. Here are 10 of them.”
I suspect I’m going to have a lot more to say on this particular topic of tax savings that cost more than social program expenditures in future posts and episodes of the radio show. Particularly after I started reading through various Corporation for Enterprise Development (CFED) reports on tax subsidies to the wealthy, including their 2014 report “Redeploying $540 Billion in Federal Spending to Help All Americans Save, Invest, and Build Wealth” (PDF – updated link). Spoiler alert: Hundreds of billions of dollars in revenue is lost each year to Federal tax credit programs disproportionately (and needlessly) benefiting wealthy households.
The Lion King is the story of a trickle-down economics proponent succeeding in politics because he looks more presidential.
On day two of Hillary Clinton’s campaign through Iowa, she made an effort to distance herself from some of the Wall Street crowd she used to represent (and drew a lot of financial support from) as a US Senator from New York. Reuters:
“There is something wrong when hedge fund managers pay lower tax rates than nurses or the truckers that I saw on I-80 as I was driving here over the last two days,” Clinton said, perched on a stiff metal chair in the automotive shop of a community college.
Some hedge fund managers and private equity firm partners, among the wealthiest financiers on Wall Street, benefit from a tax code loophole that lets them pay the capital gains tax rate, which is lower than the ordinary tax rate, on large portions of their incomes.
Clinton also repeated her concerns, first voiced on Sunday, that chief executives make 300 times more than the average worker, and sympathized with students discussing the high cost of a college education.
The United States has the highest executive pay packages in the world, and the already large disparity between CEO compensation and salaries of the average American worker has exploded since 1980 (although the gap peaked in 2000).
The Globalist itemizes the facts in “CEOs and the Rest of Us”:
1. On average, the CEOs of large U.S. companies received $12.3 million in compensation in 2012, based on an analysis of S&P 500 companies.
2. Given that the average American worker earned $34,645 in 2012, the typical U.S. CEO earns 354 times what the average worker does.
5. A worker at the U.S. minimum wage would have to work 813 hours — or 20 weeks — to earn an hour’s worth of CEO pay.
9. The CEOs of the 100 largest companies in the United Kingdom earned an average of just under $3.8 million in 2012. That is 84 times the average British worker’s compensation of $44,743.
10. Britain’s CEO-to-worker wage ratio today is almost exactly the same as the one in the United States in 1990 — more than two decades ago.
11. At that time, U.S. CEOs earned “only” 85 times the average U.S. worker’s wage.
Vermont Senator Bernie Sanders, a democratic socialist, has been speaking in Iowa on these issues as well for many months, as he decides whether or not to run against Clinton for the Democratic presidential nomination. Another likely contender, Maryland Gov. Martin O’Malley, also called recently for stronger regulations on Wall Street.
Whether it comes from a Democrat or a Labour member, I’m always glad to hear someone vocally explain what distinguishes a mainstream left-leaning party from the alternatives, after so many years of “triangulation” and wishy-washy hedging.
Here’s an excerpt from Glasgow City Council Leader Gordon Matheson’s column in the Daily Record jokingly headlined “The Labour Party is up to its old tricks – standing up for working families”
Have you noticed that the Labour Party is up to its old tricks? I’m delighted to say it’s true. We’re making the wealthiest pay a bit more to help those who need support. And we’re holding the powerful to account to secure a fairer deal for the ordinary citizen and working families. That, after all, is what distinguishes Labour from the other political parties.
Policies to help young people and tax wealthier citizens to pay for progressive programs benefiting the working class are described and detailed thereafter. He also questions the leftist credentials of the Scottish National Party (SNP) in light of their tax policies, which he says don’t favor redistribution. (Since they’re independence focused, I think most of the SNP’s funding plans derive from using North Sea oil royalties or tax revenues extracted from England to fund projects in Scotland, which is its own kind of redistribution, I suppose.)
It would be nice to hear more Democrats arguing non-defensively (like Matheson for Labour) about helping “ordinary citizen and working families” get “a fairer deal” via taxes on the wealthiest, i.e. those who can comfortably afford it.
Anti-tax Massachusetts Governor Charlie Baker says tax-revenue-starved MBTA’s service during these massive storms — wherein ancient equipment has been breaking down at the mechanical level from all the record-breaking snow and ice — has been “not acceptable.”
He’s just proposed $40 million in cuts to state transportation (not to mention his legacy role in under-funding transportation since the 1990s) but also has the audacity to complain about the functionality of the state’s transportation …. It’s amazing how refusing to properly fund government services keeps them from performing effectively.
Pictured: MBTA Orange Line platform at Green station, early afternoon on Monday February 9, 2015.
Topics: Big Ideas – Cash transfers for poverty; Nigerian politics; US state legislatures. People: Bill, Nate, Sasha. Produced: December 1st, 2014.
– Big Ideas: Are cash transfers more effective on poverty than “workfare” and tax cuts?
– Is Nigeria’s ruling PDP feeling threatened in the upcoming elections? Are Boko Haram attacks widening?
– What should we expect from US state legislatures after heavy Republican wins in 2014?
Episode 109 (53 min)
– AFD: “Social inclusion, anti-poverty policy are great for the economy!”
– The Globalist: “Bolivia: Where Socialism Appears to Work”
– AFD: “Weirdly, tax cuts don’t solve poverty, finds UN in New Zealand”
– AFD: “Indonesia debuts world’s largest cash transfer program ever”
– AFD: “Report: Tear gas used in Nigeria parliament”
– AFD: “Nigeria government raids opposition offices”
– AFD: “Kano: Boko Haram strikes Nigeria’s 2nd largest city”
– African Arguments: “Nigeria Forum – What Happens When Oil Prices Fall?”
– AFD: “Beyond the Senate: The 2014 state losses”
– Al Jazeera America: “The Democratic comeback plan”
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