The average net worth for members of Congress exceeds $1 million. The GOP side of this millionaires’ convention wants the American people to embrace a new tax plan designed specifically to make millionaires happy while offering crumbs to the middle class. Americans should treat their sales pitch like it came from a used car salesman offering a great deal on a low-mileage car recently arrived from a flood zone.
The $1.5 trillion GOP tax plan is clearly weighted to benefit the wealthy, all under the unproven assumption that the windfall will eventually trickle down to everyone else. The widening income disparity between the top 1 percent of Americans versus the rest of us should show that wealth-sharing doesn’t work that way. Consider the outcry whenever there’s a movement to boost the nation’s paltry minimum wage.
For Americans trying to figure out whether the GOP tax plan is something they can support, here are some items worth closer inspection:
— Estate taxes. Currently, dead millionaires may pass up to $5.5 million of their holdings tax-free to their heirs, and twice as much for a spouse. The new tax plan would increase it to $11 million. Inheritances are like lottery winnings. The heir has done nothing to earn this money, only to have been lucky at birth. Inheritances are income and should be taxed as such.
— Corporate taxes. Two-thirds of the benefits from this plan will go to ease the corporate tax burden. President Donald Trump erroneously says that America is the most heavily taxed country in the world. In truth, we rank 31st. America does have higher corporate taxes, but Congress also offers extensive deductions and exclusions to reduce the effective corporate rate. If U.S. corporations were willing to give up all special tax breaks, a reduction might be warranted. But there’s nothing in this tax plan to suggest those breaks are going away.
— Individual deductions. The plan would eliminate deductions for state and local tax payments and limit mortgage deductions. When the GOP talks about how much you’ll gain with this plan, consider how much more you’ll be losing.
— Debt. Recall all the times during the last decade when Republicans pounded the table and protested the enormous debt being passed to future generations with Obamacare and President Barack Obama’s economic-stabilization program. Well, the GOP plan will cost $1.5 trillion, and the payment plan is dubious. The offsets being mentioned are programs and tax breaks that you probably have benefited from in the past, but will now disappear.
Ask how much you’ll be asked to sacrifice so millionaires can enjoy tax-free inheritances and corporations can pocket more profits. A used-car salesman beckons with a shiny item just arrived from Houston. Beware. Your best interests are not foremost in his mind.