The Congressional GOP Tax Scam

The tax scam is absolutely horrendous. U.S. citizens, call or contact Congress if you are able. The Capitol Switchboard number is 202-224-3121.

Just as “bombshell” revelations where being made public late Friday morning about President Donald Trump’s former national security advisor Michael Flynn, Senate Majority Mitch McConnell told reporters just before noon—following a “complete shit show” of legislative maneuvering on Thursday night—that Republicans finally “have the votes” to pass their widely decried tax overhaul bill.

As numerous critics have warned, the GOP plan would exacerbate already historically high levels of economic inequality by giving enormous tax cuts to corporations and the richest individuals while increasing the tax burden on millions of low-income and middle class families in order to pave the way for massive cuts in future social spending, including a premeditating assualt on education, Medicare, Medicaid, and Social Security.

U.S. Data Mostly Disproves Notion of Capital Flight Following Higher Taxes on the Rich

Some of the strongest arguments for higher taxes on the richest people in the country are how there’s been an enormous upward redistribution of income over the last four decades, how there’s a strong majority of public support for higher taxes, and how there’s an immoral economic landscape for the lower classes that contains — among other defects — a child poverty rate over 20 percent. The situation of inequality has become absurd enough that there are even groups such as Patriotic Millionaires that are supporting higher taxes on rich people.

In the classic Ayn Rand novel Atlas Shrugged, the rich go “on strike” – withdrawing their services and disappearing from society in protest against taxes and regulation. Weary of carrying an ungrateful world on their shoulders, business leaders and other top income earners finally shrug, and leave the world without them.

The book’s metaphor inspires political rhetoric to this day: if you tax the rich, they will leave. Variations on the threat are issued by well-off individuals all over the world – not least in the United States, where each state sets its own tax policies, and periodic warnings are issued that taxes on the rich will lead to millionaire migration to more obliging US states.

When Oregon voters passed a millionaire tax at the start of this decade, for example, the state’s richest resident, Nike CEO Phil Knight, warned the tax would set off a “death spiral … in which thousands of our most successful residents will leave”. As California considered similar taxes, policymakers cautioned “nothing is more mobile than a millionaire and his money”. In New Jersey, governor Chris Christie simply stated: “Ladies and Gentlemen, if you tax them, they will leave.”

But does this rhetoric stand up to statistical scrutiny? To better understand elite migration across state lines, I analysed tax return data from every million-dollar income-earner in the United States. The dataset includes 3.7 million top-earning individuals, who collectively filed more than 45 million tax returns over more than a dozen years – showing where millionaires live and where they move to.

And it turns out that place still matters for the rich – much more so than we might think.

Only about 2.4% of US-based millionaires change their state of residence in a given year. Interstate migration is actually more common among the US middle class, and almost twice as common among its poorest residents, who have an annual interstate migration rate of 4.5%.

[…]

The Forbes list of the world’s billionaires offers an international look at elite migration, and takes us higher up the food chain to the greatest corners of wealth.

Analysis of this list shows most of the world’s billionaires – about 84% – still live in their country of birth. And among those who do live abroad, most moved to their current country of residence long before they became wealthy – either as children with their parents, or as students going abroad to study (and then staying).

Only about 5% of world billionaires moved abroad after they became successful. These individuals readily fit the stereotype of a “transnational capitalist class” – unplugged from their nation state, travelling the world for some combination of tax avoidance and cosmopolitan lifestyle.

[…]

Millionaire tax revenues could be used to invest in things that matter to young people starting out: education, infrastructure, public services, urban amenities, quality of life. And this would help to attract and retain a pipeline of future top-earners, creating a virtuous tax circle.

Group of Over 400 Millionaires and Billionaires Tell U.S. Congress to Raise Taxes on Them Instead of Cutting Them

Cutting important public services for tax cuts has long been the twisted plan of congressional Republicans. Higher taxes on large corporations and the wealthy comes in at 70 percent support in the U.S. for a reason.

More than 400 American millionaires and billionaires are sending a letter to Congress this week urging Republican lawmakers not to cut their taxes.

The wealthy Americans — including doctors, lawyers, entrepreneurs and chief executives — say the GOP is making a mistake by reducing taxes on the richest families at a time when the nation’s debt is high and inequality is back at the worst level since the 1920s.

The letter calls on Congress not to pass any tax bill that “further exacerbates inequality” and adds to the debt. Instead of petitioning tax cuts for the wealthy, the letter tells Congress to raise taxes on rich people like them. It is being released publicly this week, as Republicans debate legislation that would add $1.5 trillion to the debt to pay for widespread tax cuts for businesses and individuals.

GOP Continues to Wage Class Warfare With Inhumane Tax Bill

The worst Republican congress in history seems to have little shame.

“Soaking broke-ass grad students to pay for a private jet subsidy. All-out class war on the 99 percent.”

That was how one commentator described a pair of provisions buried in the GOP tax plan that passed the House on Thursday and is likely headed to the Senate floor for a vote as early as next week.

One provision—crammed in the middle of the latest version of the so-called “Tax Cuts and Jobs Act”—would provide a windfall to the wealthy few who own or lease private planes by exempting them from certain taxes related to “maintenance and support,” “the hiring and training of pilots and crew,” and “administrative services such as scheduling, flight planning, weather forecasting, obtaining insurance, and establishing and complying with safety standards.”

Graduate students, however, would not fare so well if the GOP plan becomes law.

As CNBC reports, “[s]ome programs provide graduate students with a modest stipend for food and housing. For instance, Ryan Hill, a fourth-year Ph.D. student at MIT, receives a $30,000 living stipend and a tuition waiver allowing him to forego paying $50,000 in tuition. He currently pays taxes on his $30,000 stipend, but under the proposed House tax bill, his tuition waiver would also be taxed—meaning he would be taxed as if he was earning $80,000 a year.”

In total, the House GOP tax plan would raise taxes by 400 percent on many graduate students, the Harvard Crimson estimated.

Such a tax on students who are already drowning in loan debt “would be devastating,” Samantha Hernandez, legislative director of the National Association of Graduate-Professional Students, told Wired“I monitor all legislation at the state and federal levels that could affect graduate and professional students, and this is just—this would have the greatest negative impact of anything I’ve seen.”

Historian Nick Kapur pointed to his own experience as a PhD student and described the proposed tax hike as “the height of Republican insanity.”

The $1.5 trillion cut is also back.

On Capitol Hill, Republican lawmakers are moving closer to pass a sweeping $1.5 trillion tax cut that largely benefits the wealthy and the nation’s largest corporations. The House passed its version of the bill on Thursday by a vote of 227 to 205. Thirteen Republicans joined Democrats in opposing the legislation. The massive tax cut was approved without the House holding a single hearing. Hours later, the Senate Finance Committee approved its own version of the bill, but it is unclear if the Republicans have enough votes for it to pass the full Senate. One of the biggest beneficiaries of the tax bill may be President Donald Trump’s own family. An NBCNews analysis based on his 2005 tax return found Trump would personally save $20 million under the House bill, while his heirs could save $1.1 billion. Meanwhile, the Senate plan will actually result in higher taxes for workers who earn less than $75,000 by 2027, according to a new analysis by the Congress Joint Committee on Taxation.

Canadian Oil Giants Taxed Billions Less in Canada Than Abroad

A major source of lost revenue that could be used to fund conversions to clean, renewable energy. Apparently there’s also a $3.3 billion annual subsidy to the fossil fuel industry too, which is another absurd example of corporate welfare. Why should the public support corporate entities that significantly harm the environment?

Canada taxes its oil and gas companies at a fraction of the rate they are taxed abroad, including by countries ranked among the world’s most corrupt, according to an analysis of public data by the Guardian.

The low rate that oil companies pay in Canada represents billions of dollars in potential revenue lost, which an industry expert who looked at the data says is a worrying sign that the country may be “a kind of tax haven for our own companies.”

The countries where oil companies paid higher rates of taxes, royalties and fees per barrel in 2016 include Nigeria, Indonesia, Ivory Coast and the UK.

“I think it will come as a surprise to most Canadians, including a lot of politicians, that Canada is giving oil companies a cut-rate deal relative to other countries,” said Keith Stewart, an energy analyst with Greenpeace.

Companies like Chevron Canada paid almost three times as much to Nigeria and almost seven times as much to Indonesia as it did to Canadian, provincial and municipal governments.

Chevron used to run its Nigeria and Indonesia projects out of the U.S., but after allegations that they evaded billions in taxes, their operations were moved to Canada.

[…]

Justin Trudeau’s Liberal government and the provinces also continue to give $3.3 billion in yearly subsidies to fossil fuel producers in the country, despite having pledged to phase them out.

Also, months ago I made posted disturbing facts about Alberta’s oil wells. There’s actually new reporting on methane emissions being worse than previously estimated in Alberta too.

Alberta’s oil and gas industry – Canada’s largest producer of fossil fuel resources – could be emitting 25 to 50% more methane than previously believed, new research has suggested.

The pioneering peer reviewed study, published in Environmental Science & Technology on Tuesday, used airplane surveys to measure methane emissions from oil and gas infrastructure in two regions in Alberta. The results were then compared with industry-reported emissions and estimates of unreported sources of the powerful greenhouse gas, which warm the planet more than 20 times as much as similar volumes of carbon dioxide.

“Our first reaction was ‘Oh my goodness, this is a really big deal,” said Matthew Johnson, a professor at Carleton University in Ottawa and one of the study’s authors. “If we thought it was bad, it’s worse.”

Carried out last autumn, the survey measured the airborne emissions of thousands of oil and gas wells in the regions. Researchers also tracked the amount of ethane to ensure that methane emissions from cattle would not end up in their results.

In one region dominated by heavy oil wells, researchers found that the type of heavy oil recovery used released 3.6 times more methane than previously believed. The technique is used in several other sites across the province, suggesting emissions from these areas are also underestimated.

House of Representatives Approves $1.5 Trillion Cut to Medicare/Medicaid for the Rich

The significant cut to Medicare/Medicaid faces disapproval by the majority of Americans, but — as seen here — most Republicans in Congress serve the wealthy donor class over the general population.

The GOP-controlled House of Representatives on Thursday narrowly passed a Senate-approved budget resolution that moves Republicans one step closer to their ultimate goal of delivering massive tax breaks to the wealthiest Americans and imposing “grotesque” and “heartless” cuts to Medicare, Medicaid, and other life-saving safety net programs.

The final vote tally was 216-212, with 20 Republicans defecting from their party. No Democrats backed the measure.

Frank Clemente, executive director of Americans for Tax Fairness, called the GOP budget an “immoral calamity” in a statement following Thursday’s vote.

“The Republicans in the House have just advanced an immoral tax plan that will have disastrous real-world consequences for many millions of Americans,” Clemente said. “It’s a calamity of their own making, and voters will remember it.”

Despite insistence from President Donald Trump and the GOP that their budget is pro-working class, analysis after analysis has shown that their proposals would in fact raise taxes on many middle class families while sending an enormous windfall—$1.5 trillion over the next decade—to the top one percent.

Meanwhile, notes Vox‘s Dylan Matthews, “the federal welfare state would be rolled back in just about every dimension.”

“All non-Medicare health programs would see a cut of $1.3 trillion, or nearly 30 percent, by 2027,” Matthews adds. “Medicare would be cut too, to the tune of $473 billion. There is $1 trillion over 10 years in mystery cuts to mandatory programs, cuts that would in practice almost certainly hurt programs for the poor.”

Morris Pearl, chair of the Patriotic Millionaires, said in a statement Thursday that “[t]he representatives who just chose the bank accounts of their donors over the health and wellbeing of their constituents should be ashamed.”

“Two hundred sixteen members of the House just voted to hurt millions of vulnerable Americans, including many of their own constituents, just to give millionaires like me a massive, unnecessary tax break,” Pearl added. “The American people don’t want a $1.5 trillion cut to Medicare and Medicaid and they don’t want a huge tax cut for the rich, but wealthy donors do.”

AP Poll:

Most Americans say President Donald Trump’s tax plan would benefit the wealthy and corporations, and less than half believe his message that “massive tax cuts” would help middle-class workers, according to an Associated Press-NORC poll.

[…]

The poll found 69% of adults who have heard at least a little bit about the plan think it would help large corporations. The sentiment was bipartisan, including 70% of Democrats and 69% of Republicans.

Also, 60% said the tax push would bolster the wealthy, with 67% of Democrats and 54% of Republicans viewing it that way.

[…]

The survey found that 56% said they think middle-class households pay too much, while 56% say the same about small businesses. By contrast, 72% say the wealthy and large corporations pay too little in taxes.

In 2016, 73% of Fortune 500 Companies Used Offshore Tax Havens

All of those hundreds of billions of dollars being deprived of productive use for the public, and that because of a few greedy corporate executives no less.

new study reveals the extent to which companies are using tax havens to avoid U.S. taxes and undermines the case for any tax proposal that would allow companies to repatriate their U.S. profits at a special low tax rate.

In 2016, nearly three in four Fortune 500 companies maintained subsidiaries in offshore tax havens, according to “Offshore Shell Games,” an annual study of offshore tax avoidancereleased today by the U.S. PIRG Education Fund and the Institute on Taxation and Economic Policy.  Fortune 500 companies’ offshore cash hoard now totals $2.6 trillion, a sum on which these companies are avoiding up to $752 billion in U.S. taxes.

Corporate tax avoidance is a central part of the current tax reform debate. Republican lawmakers have proposed not only to lower the statutory corporate tax rate, but also to allow corporations to repatriate offshore profits and pay just a fraction of the current statutory 35 percent corporate tax rate.

[…]

“Real tax reform would fix the deferral loophole, not reward companies for using the loophole to avoid taxes year after year,” said Richard Phillips, a senior policy analyst at the Institute on Taxation and Economic Policy. “Lawmakers shouldn’t be discussing how to sweeten the pot and give corporations a huge tax break that amounts to a huge financial reward for engaging in bad corporate behavior.”

The amount that these corporations will help the American public at a low repatriated rate is comparatively insignificant. This experiment was already run in the 2000s, and the corporations used most of the money for stock buybacks and other corporate malfeasance back then. As the same would happen today, it would be a far superior outcome for those profits to be taxed at a rate that’s actually fair and then used for productive investment in the public interest. An infrastructure project would be one of many sensible ideas.

Lower corporate tax rates aren’t going to lead to more productive investment either. The data from the last 7 decades proves that there’s no correlation between higher aggregate corporate profits and investment.

Wonderful-Graph

The effective corporate tax rate in the U.S. is also already about half of the statutory rate too.

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