Raise your hand if you thought the Trump tax plan would favor the middle class and the poor.
I see no hands.
Democrats in the House and Senate can fulminate all they want, and the responsible media – and you know who they are – can put banner headlines about economic inequality on their sites and publications, but in the end, cutting taxes for the upper class will always be the GOP’s number one priority.
What’s different this time around is that the deficit hawks who haunted President Obama for his supposed wasteful spending that saved the auto industry and basically the entire economy are…silent. Actually, they’ve defended the multi-trillion black hole that TrumpTax will blow in the deficit, with the otherworldly assumption that economic growth will pay for the tax cuts.
It will not. Yes, economic growth will likely rise in the first few months after the cuts are passed, but at some point the Federal Reserve, with or without Janet Yellin, will raise interest rates enough to cool off the resultant inflation. That will result in some more fulminating from the president who knows less about actual economics than he does about health insurance.
This assumes that the bill is passed as presented today, which also is not going to happen. There are too many moving parts and too many corporate interests that stand to lose for the law to stand. The home building industry is concerned about the mortgage interest deduction. People like me who live in states where state and local taxes are high will put pressure on legislators to put back the deduction for those taxes. The new proposed 25% tax rate for pass through entities could result in many people listing themselves as pass through entities, which would mean they’d pay a lower tax rate.
And, of course, there are other parts of the proposal (still only 9 pages long) that will come out soon that will benefit other groups. Tax bills run into the thousands of pages. I can’t wait to see who gets the breaks and who gets the shaft.
The real impact, though, will mean the most when the bill is written and the true measure of what each group in this country will get out of it is measured in pizzas.
That’s right, pizzas, as in, “the average person will see a $1,600 tax cut, which comes out to $31 per week, or about 2 pizzas.” Right now, the average middle class worker will get about a $660 tax break per year which comes out to $12.70 per week, which is…one pizza. Are you ready to create a multi-trillion dollar addition to the deficit for your pizza? If we need to, we can pool our money together and add pepperoni. Or an anchovy. After the bill passes in its final form, I would not be surprised to see the middle class share fall from a whole pie to slices. And not fat Sicilian slices either.
No matter how you slice it, though, it ain’t gonna to be much for the voters who thought Donald Trump was on their side or that the swamp would be drained. This bill is already fueling the lobbyists who are anticipating a windfall. And the president will still not show us his tax return, so any of his claims that tax reform will not help him are specious at best.
But this is par for the course for our golfing executive. You know: the one who’s currently blaming Puerto Rico for its devastation.