The Trump tax plan doesn’t add up

The Trump tax plan doesn’t add up

President Donald Trump’s plan for deep corporate tax cuts could reduce federal revenue by $7 trillion over the next two decades, according to the nonpartisan Tax Policy Center.

Number of the Day

4,411,390 - Number of American citizens living in U.S. territories and the District of Columbia, meaning they have no representation in Congress. Except for D.C. residents, they can’t vote in presidential elections and don’t pay federal income tax. (Source: The Washington Post)

President Donald Trump’s plan for deep corporate tax cuts could reduce federal revenue by $7 trillion over the next two decades, according to the nonpartisan Tax Policy Center. While some of that could be offset by higher taxes on some individual taxpayers, it still is almost certain to substantially increase the budget deficit. And that, in turn, means the tax cuts would have to be temporary because of Senate rules that require deficit-increasing tax cuts come with an expiration date. The New York Times’ Alan Rappeport reports:

For now, those responsible for selling the tax plan are staying vague about how they will fit the tax cuts into a $1.5 trillion hole. Instead they are largely taking issue with projections that say the cuts would expand the deficit and disproportionately benefit the rich. “What’s missing from that — and it’s not being hidden, it just doesn’t exist yet — are things like details on the deductions, details on the brackets,” Mick Mulvaney, director of the Office of Management and Budget, said on CNN’s “State of the Union” on Sunday. “It is impossible to sit down and say, this will be the impact on this wage earner or this family at this particular time.”

A vague plan devoid of details means a massive payday for lobbyists, who could reap $1 billion as they fight on behalf of various corporate interests to preserve endangered tax breaks. The Times’ Kenneth P. Vogel:

The spike in tax-related lobbying is already well underway, prompted by Mr. Trump’s campaign-trail pledge that fundamentally overhauling the tax code would be one of his top priorities in the White House. Companies and trade associations have submitted nearly 450 filings to lobby on tax issues from the beginning of the year through the end of last week, compared with fewer than 265 filings for all of 2016, according to congressional lobbying disclosures.

One deduction that could be on the chopping block could disproportionately affect Louisiana. The personal casualty loss deduction lets homeowners and small businesses deduct losses from natural disasters that aren’t reimbursed by insurance. The Advocate’s David J. Mitchell:

Homeowners can claim the unreimbursed loss through an amended return for the prior tax year, said Micah Stewart, tax director for LaPorte CPAs and Business Advisors. Stewart said homeowners and small businesses can file as soon as they are able after a disaster and don’t have to wait until the latest year’s income tax returns are due. “That helps a lot of taxpayers, including small businesses, to get cash in their hands to help at trying to move forward,” Stewart said.

 

A budget silver lining
With the state closing in on a decade of revenue shortfalls, the AP’s Melinda Deslatte notes a silver lining: Tax-averse legislators are applying much more scrutiny to areas of the budget that had previously received little attention.

House Republicans have pushed for reviews of the multimillion-dollar contracts that agencies have. The Senate’s tax committee spent months combing through the tax breaks on the books. And lawmakers in both chambers have embarked on a study of the pots of money previous Legislatures have locked away and protected from cuts. This month’s meeting of the joint House and Senate budget committee was a prime example of the digging from lawmakers into Louisiana’s income and spending. The committee received a lengthy, new report showing where agencies have socked away money in bank accounts that roll over from year to year, never reverting back to the Treasury for general use. “It’s surprising that we really haven’t focused on that like we should, because it is a lot of money,” said Sen. Francis Thompson, a Democrat from Delhi.

 

Sen. Cassidy’s unhealthy choices
With the Senate’s effort to repeal the Affordable Care Act finally on the political back-burner, where it belongs, Nola.com/The Times-Picayune columnist Tim Morris takes stock of the winners and losers. He writes that the satirical news site the Onion pretty much got it right in assessing the failed Cassidy-Graham bill.

Even worse, Cassidy couldn’t dispute that Louisiana would lose federal financing under his bill. He suggested that states thinking they need more money should raise their own taxes to pay for it. … It made you wonder whether Cassidy’s Louisiana colleague, Sen. John Kennedy, shouldn’t announce that he would “rather drink weed killer” than vote for Cassidy-Graham just to show that one of our senators was looking out for the best interest of the state.

The Advocate’s editorial board says it’s up to Democrats in Congress to emerge from the wreckage of Cassidy-Graham with ideas to strengthen the ACA.

And in fairness, Democrats have been working with the GOP’s Lamar Alexander, of Tennessee, on a bill yet to emerge from Alexander’s health committee that would deal with some of Obamacare’s problems. Under Senate rules, Cassidy noted earlier this summer, those provisions could not be part of his own bill. Alexander, and Cassidy, earlier demonstrated their willingness to work outside party lines on the mental health issues in health care. Why not make that a model for a fix to problems with Obamacare?

 

No right to sue
A growing number of American workers – nearly 60 million – are subject to mandatory arbitration agreements, meaning they don’t have the right to sue their employers for things like discrimination or other mistreatment. As the Economic Policy Institute documents in a new report, the trend is especially prevalent among large employers.

This study finds that since the early 2000s, the share of workers subject to mandatory arbitration has more than doubled and now exceeds 55 percent. This trend has weakened the position of workers whose rights are violated, barring access to the courts for all types of legal claims, including those based on Title VII of the Civil Rights Act, the Americans with Disabilities Act, the Family and Medical Leave Act, and the Fair Labor Standards Act. In October 2017, the Supreme Court will hear a set of consolidated cases challenging the inclusion of class action waivers in arbitration agreements. Class action waivers bar employees from participating in class action lawsuits to address widespread violations of workers’ rights in a workplace. The Court will rule on whether class action waivers are a violation of the National Labor Relations Act; their decision could have wide-reaching implications for workers’ rights going forward.

 

Number of the Day

4,411,390 – Number of American citizens living in U.S. territories and the District of Columbia, meaning they have no representation in Congress. Except for D.C. residents, they can’t vote in presidential elections and don’t pay federal income tax. (Source: The Washington Post)