It is repugnant that Trump (and Romney and other billionaires) claim it is “patriotic” to pay minimal or zero taxes (paying zero taxes, Trump declared at the Hofstra presidential debate “makes me smart”).
By a wide majority, Americans see paying taxes as their civic responsibility to fund defense, education, infrastructure, research (the list goes on and on).
It is obscene that because Trump, defying decades of tradition, refuses to release his tax returns, Americans don’t know how much influence foreign actors (from Russia, Turkey, China, India, Dubai) including national banks, oligarchs and criminals have on Trump, his cabinet and “inner circle” of advisers; how Trump is personally enriched by policies inflicted on others, from reversing climate action, greenlighting the Keystone pipeline, sanctions on Russia, trade agreements, travel bans, and even bombing Syria (he made money on stocks in companies that build the bombs at $1 million apiece).
Trump, still smarting from the health care fiasco, now promises to turn to tax “reform” — by which he means to fulfill every Republicans’ wet dream of rolling back taxes on the wealthiest and corporations, ending estate taxes and the Alternative Minimum Tax (by which Trump had to pay 24 percent on $150 million in income in 2015, instead of the 3 percent he would have paid for using tax dodges available to him and few others) — effectively redistributing wealth even more to the top 1% than it has shifted after the Bush tax cuts. Another long-time obsession: getting rid of the estate tax, dubbed the “death tax”, which only impacts 70,000 of the wealthiest families, like the Kochs, the Mercers, the Trumps.
The main “reform” being pushed by Republicans is to change from a progressive income tax system to a regressive, flat income tax — removing the only tax credits that enable people to ascend into the middle class–sugaring it over by saying the flat tax would be only 10 or 15 percent.
Sounds great? But this only benefits the wealthy. Think of it this way: 10 percent of a $50,000 income for a family of four leaves just $45,000 to live on; 10 percent of $5 million income leaves $4.5 million to live on.
Trump’s plan (which Hillary Clinton called “trickle-down economics on steroids”) would add more than $10 trillion to the national debt over 10 years, while cutting out the necessary investments federal government should be making to grow the economy, improve lives, and enable more people to achieve their American Dream.
It is important, though, to correct myths which drive the tax “reform” debate, starting with the fact that Americans don’t pay the highest taxes in the world.
In fact, on a list of the 34 wealthiest countries, the USA ranks 31st in total taxes paid compared to Gross Domestic Product; 17th in corporate tax revenue as a percentage of GDP (2.6 percent), and 19th in terms of tax revenue per capita, $14,204 (right at the median of $14,923).
Indeed, the Big Lie is that the rich (or corporations for that matter) pay anything like their “nominal” tax rate, but rather, pay a fraction of what middle-class and working class Americans pay.
What is needed is not just tax reform, but fair tax reform.
So, we are told that we have to slash federal spending on programs that benefit ordinary Americans, and cut Medicare and Social Security benefits or raise the age for eligibility — so that the richest 1 percent and corporations can get lower taxes.
Policies so far presented by the Trump/Ryan administration would cut Medicare by $449 billion and Medicaid by $1 trillion.
But the solution is actually simple if there is the will: raise the income cap for paying in, which has been done dozens of times over the decades.
A billionaire today pays the same amount of money into Social Security as someone who makes $118,500 a year, the cap on taxable income.
Raising the cap to $250,000, as Sen. Bernie Sanders has proposed, “would not only extend the solvency of Social Security for the next 50 years, but also bring in enough revenue to expand benefits by an average of $65 a month; increase cost-of-living-adjustments; and lift more seniors out of poverty by increasing the minimum benefits paid to low-income seniors.”
What if you raised the cap to $1 million? I’ll bet you could reduce the payroll tax from 7.65 percent (15 percent for self-employed) down to, say, 3 or 4 percent.
Isn’t that the kind of trickle down economics that would really stimulate economic growth and jobs, with a circularly virtuous effect?
Trump and the Republicans have been salivating over cutting the corporate tax rate from 35 percent to 10 or 15 percent — even though many profitable corporations don’t pay a dime now because it is so easy for them to offshore capital.
“Right now, multinational corporations owe more than $750 billion in U.S. taxes on $2.6 trillion in profits stashed offshore,” stated Frank Clemente, executive director, Americans for Tax Fairness. “They’re skirting their patriotic duty to enrich their high-paid CEOs and wealthy shareholders.”
Tax fairness would eliminate these loopholes and tax shelter schemes. Companies that move headquarters offshore to evade taxes should lose their ability to bid for federal contracts, have to repay whatever tax incentives they were given, and should have to compensate government for services incurred on their behalf.
Americans do not mind paying taxes, as long as they have confidence that they paying their fair share and getting fair value for their tax dollars.
There are marches and protests scheduled for April 15 in Washington D.C., 148 cities and five countries.
