The proposed tax reform by the Trump regime is more accurately described as tax deform. There is little that’s positive from the regime’s proposals, and what is positive (such as eliminating the carried interest loophole) seems more as if Donald Trump is trying to get vengeance on a particular group (hedge fund managers in this case) rather than trying to help the general population.
On the carried interest loophole though, it allows obscenely rich hedge fund managers to have their income taxed at rates comparable to what kindergarten teachers are taxed at. It’s another glaring flaw in how the economic system currently works.
The U.S. may also have one of the highest corporate tax rates on paper, at 35 percent, but the effective corporate tax rate is usually considerably lower. The U.S. is actually at the lower end of the corporate tax spectrum compared to similar wealthy industrialized countries.
And eliminating the estate tax is another dangerous proposal. Extremists have used propaganda to rephrase the estate tax as the “death tax,” and the counter to that is to call it the “billionaire’s tax.” The reason the elimination of the estate tax is dangerous though is because the U.S. is already either an oligarchic society or close to being one. From 1977-2007, 60 percent of national income went to the top 1%, and eliminating the estate tax would make the consequences of such a distribution far worse.
The billionaire Koch brothers are well-prepared for the upcoming debate over tax reform, with allies arranging to plant questions at town hall meetings and efforts to orchestrate a grassroots army to demand lower corporate taxes.
A detailed timeline for the Koch strategy was laid out in a recent document prepared by a public relations firm that services the broad network of conservative advocacy groups controlled by the billionaire brothers’ political network. The plan calls for action to take advantage of President Donald Trump’s pledges to reform the tax code. Trump has called for cutting the corporate tax rate by as much as 50 percent, and eliminating the estate tax on inherited wealth, creating a unique opportunity to propose legislation that would benefit business owners such as the Koch brothers.
The strategy memo lays out a five-phase plan for passing a version of tax reform that is favorable to the Koch donor network. The Koch brothers make clear that their ideal tax reform legislation would exclude the idea of an import or carbon tax, while focusing on broad reductions in the corporate tax rate.
Although a portion of the strategy entails traditional lobbying and meetings with influential policymakers, along with paid advertising to pressure lawmakers, the memo also calls for substantial resources to be invested in grassroots advocacy.