Tax Reform Candor
"But we really could do more without the government requiring it. We could emphasize mentoring, strategic business planning, university managed incubators, angel and mezzanine financing, and marketing networks to accelerate middle class economic growth. This is the sweet spot for the Silicon Valley and the Research Triangle. It could be like an Economic Peace Corps. This is a strategy that could work for America."
U. S. Treasury Secretary Steve Mnuchin recently said that it will be hard to avoid tax cuts for the rich with President Trump's tax proposal. Specifically, it is said Trump's 'greatest tax cut ever for the middle class, not Trump' would actually result in the 1% wealthiest getting 80% tax cut. Even Trump's lies cannot change that.
It is amazing how clueless so many of Trump's appointees, like Mnuchin, are about our government. Then putting aside the ethics violations of so many of the members of his Cabinet, it is amazing how the government swamp of corruption has grown so in just 9 months. Trump's Tax Plan is described in the Capitol as the all time "honey pot" for the lobbyists.
Let's look at why the President's Tax Proposal makes almost no sense to most of us.
1. The wealthy pay most of the taxes today, although their percentage is sometimes low to nothing, because they are the people who put the budget hemorraghing tax loopholes in law.
2. The 2015 average individual income tax was $9,655 based on a gross income of $71,258. That is a tax rate of approximately 15%.
3. An across the board the tax cut of say 5% would save that average tax payer $482. For the wealthy with an income of say $1 million, the savings would be $50,000. That is a big difference.
4. But Trump's real target of the super wealthy is the Estate Tax, which is 18-40% above a threshold of $5.5 million. They argue that it is a "Death Tax" because they pay taxes twice on that money--when they earn it and when they die. That of course assumes that they paid taxes in the beginning, and didn't exploit the tax loopholes (that many of those same people put in place). This is where lying Trump tries to bamboozle us with the reference to the farmers and small businesses bearing the brunt of the tax. For the record, I have always opposed the Inheritance or Estate Tax as long as all of us pay some reasonable level of taxes, in the 15-30% range. A flat tax might hold promise if the loopholes were addressed first. I do not oppose trying to minimize our tax payments within the law.
5. At one point in the Washington discussion, a sliding tax reduction with more percentage savings for the poor was proposed, but that was scrapped when Wall Street got wind of it.
6. Many charge that President Obama and the liberal Democrats just want to mandate wealth redistribution through the tax code, and that is arguably just the government becoming Robin Hood--taking from the rich and giving to the poor. I have argued that is a bad solution and suggest economic incentives, described below, as the alternative to grow middle class opportunities for building wealth.
7. What most of us do agree on is that it should be a goal of all Americans to strive to increase their standing and wealth to the extent they can and will. Our capitalistic society provides that opportunity to all, but it is not automatic. Education, opportunities, discrimination, timing, and determination, among others, all come into play to make it happen or not. Americans have often bootstrapped those with less, through generous charitable support, which has historically distributed the wealth somewhat. But we really could do more, without the government requiring it. We could emphasize mentoring, angel financing, strategic business planning, university managed incubators, and marketing networks to accelerate middle class economic growth. This is the sweet spot for the Silicon Valley and the Research Triangle. It could be like an Economic Peace Corps. This is a strategy that could work for America.
It is this latter work that is ignored by Trump and his zillionaire Cabinet members, trying to manipulate the Tax Code. This why Secretary Mnuchin finds it is hard to avoid tax cuts for the rich in Trump's so called Tax Reform.
PS: Mr. President, IRS audits usually last a couple of months. It has been almost 2 years since you promised to release your taxes. Our interest is to find if your have a financial connection to our enemy Russia. You wouldn't want to break a promise to the American people, would you sir?
#USTreasurySecretarySteveMnuchin #PresidentTrump #EstateTax #DeathTax #WallStreet