The TrumpShaker Top Two
November 5, 2017 – National Love Your Red Hair Day – Day 362 P.E
One for You, One Million for Me
The House Republicans released their long-awaited tax plan, “The Tax Cuts and Jobs (and Cotton Candy for Everyone) Act” this week. The plan would accomplish three things: transfer wealth, cut government support, and check off items on Republicans’ wish list for Santa.Wealth Transfer
The Republican tax plan is designed to transfer wealth from the lower and middle class to the very rich and from blue states to red states.
- The plan would slash the corporate tax rate from 35% to 20%.
- Multinational corporations would be taxed on only 10% of their global earnings.
- The Alternative Minimum Tax (AMT) would be eliminated. The AMT forced Trump to pay $31 million extra in taxes in 2005 (the last year for which we’ve seen Trump’s tax returns).
- There plan does not eliminate the carried interest loophole, which allows hedge fund managers and private equity execs to be taxed at low capital gain rates, rather than income tax rates. During the campaign, Trump had promised to close this loophole.
- “Pass-through” income from certain types of businesses, such as partnerships and S corporations, would be taxed at 25%, rather than the top income level of 39.6%. The Center on Budget and Policy Priorities estimates that 80% of this tax cut would benefit those with household incomes over $1 million as high-earners would reclassify their wage and salary income as pass-through income.
- The plan would end the estate tax, which is a tax of 40% on wealth transferred from one generation the next. However, the tax only affects the very rich as it taxes estates of over $5.49 million for individuals and $10.98 million for married couples.
- The tax plan would not amend the “step-up basis” rule for inheritances. This means that say Trump paid $20 million for stock that is now worth $100 million. If Trump were to sell the stock, he would have to pay capital gains tax on $80 million. Under the Republican tax plan, Trump can now bequeath this $100 million in stock to
Tiffany (who am I kidding?)Ivanka, there would be no estate tax on that transfer AND the basis of those stocks for Ivanka would now be $100 million. This means she could sell the stocks on the day she inherits them and not pay any capital gains tax on it.
- The plan eliminates the deduction for state taxes, caps the deduction for property taxes at $10,000, and caps the mortgage deduction at $500,000. This penalizes residents of states with high state and local taxes and high real estate prices. I’m looking at you California, New York, New Jersey, and Connecticut. Republicans argue that by providing these deductions, all other states are subsidizing residents of those few states. That argument would be more persuasive if all of the strongly affected states were not already net-contributors to the federal government, i.e., California sends D.C. more money than it gets back.
Cuts Government Support
Republicans need to at least make an attempt to cover the cost of cutting taxes for the rich. To do so, they are targeting dozens of small deductions utilized often by those less fortunate. However, even after eliminating all the deductions, the Republican tax plan still increases the national debt by $1.5 trillion over the next decade. This is actually a feature, not a bug, of the Republican plan as a huge debt in a few years will give Republicans another opportunity to cut social programs when they magically transform back into deficit hawks when the clock strikes midnight at the inauguration of a Democratic president.
- The plan would eliminate the adoption credit. Yes, the same party that is having a hearing to outlaw abortions after 6 weeks, also is pushing to make it more difficult to adopt. According to the Joint Committee on Taxation, repealing the adoption tax credit would save a little more than one-third the cost of an aircraft carrier.
- It would tax the value of tuition forgiveness for PhD students. As a former PhD student, who was pulling in a cool $12,500/year as a TA, I can tell you that making PhD students pay taxes on tuition forgiveness (i.e., income they do not actually receive) will cripple academia. This is likely the point since 58% of Republicans say that colleges and universities have a negative effect on the country.
- The plan would end deductions for biotech companies to run clinical tests for treatments of rare diseases. Without the deductions, it will not make sense financially for firms to try to treat diseases with a small market.
- Taxpayers suffering from a federally declared disaster or “any sudden, unexpected, or unusual event” would no longer be allowed to deduct uninsured losses. Republicans politicians carved out those suffering from the last hurricanes in Houston, Florida, and Puerto Rico. However, I think those may not be the last three disasters we suffer.
- The lauded (by Republicans) estimated tax savings in this plan of $1,182 for a family of four earning $59,000 disappears completely by 2024 and would eventually become a tax increase for that same family compared to current regulations.
- Non-profits, such as universities, hospitals, churches, and charter schools, would no longer be allowed to issue tax-exempt bonds, dramatically raising their borrowing costs.
- The bill would terminate the medical expense deduction, which is used primarily by senior citizens, especially those in nursing homes.
Checks Off the Republicans’ Christmas Wish List
- Included in the tax bill is permission to open up the Arctic National Wildlife Refuge to drilling.
- Although it’s not in the bill yet, Republicans are considering eliminating individual mandate, which is a tax on people who do not get health insurance, as part of the tax bill. Eliminating the individual mandate would completely disrupt the Affordable Care Act markets.
- Republicans are attempting to sneak in a definition of personhood as a fetus through 529 college savings account regulations. The bill states that “nothing shall prevent an unborn child from being treated as a designated beneficiary or an individual.” The bill then defines “unborn child” as a “child in utero . . . a member of the species homo sapiens, at any stage of development, who is carried in the womb.’’ 529 accounts already allow expectant parents to open an account in their own names and then transfer it to the child when s/he is born. The purpose of this new language is simply to have fetuses receive federal benefits.
Odds of Passage
Passing this tax bill is the top priority for the Republicans. If they cannot pass a tax reform bill when controlling the House, Senate, and Presidency, then they really cannot pass any meaningful legislation. However, it will not be an easy path. Like with health care reform, Republicans made the decision to not include any Democrats in the writing of the legislation, meaning they have little margin for error. In the House, Republicans from New York and New Jersey are coming out strongly against the elimination of the state and local tax deduction. In the Senate, where Republicans can only lose two votes, Rand Paul (R-KY) and Bob Corker (R-TN) are speaking out against the increase in the debt. Susan Collins (R-ME) is not happy about the repeal of the estate tax. John McCain (R-AZ) is insisting, as he did with health care, that the Senate pass a tax plan through regular order, meaning doing crazy things like having public hearings on it – which are not currently planned.
The initial reaction from the public has been negative. A Washington Post-ABC News poll shows 50% opposing and 33% supporting the plan. Further, trade organizations representing homebuilders, realtors, and small business have all already come out against the bill. Like health care, Republicans have staked their reputation on it and will do anything they can to pass tax reform. Like health care, it will take your voice to defeat it.
As The Tяump Turns to . . . Indictments
After months of Trump dismissing Russia as a fraud and the lack of movement in the investigation driving Trump’s critics crazy, Special Counsel Robert Mueller’s team of untouchables issued their first set of indictments.Charges were filed against former Trump campaign chairman and international man of mystery (he has three different U.S. passports!) Paul Manafort, Manafort’s associate Rick Gates, and former Trump foreign policy adviser George “how dare you besmirch the good name of Webster’s dad” Papadopoulos.The charges against Manafort and Gates revolve primarily around money laundering and while very serious, seem, at the moment, tangential to the Trump campaign’s collusion with Russia. Papadopoulos, on the other hand, is at the center of the connection between Trump and Russia. Papadopoulos had extensive talks with Russian government representatives, including one who told him they had “thousands of emails” with “dirt” on Hillary Clinton. This was back in April 2016, before anyone knew of the stolen emails from the DNC or Clinton campaign chairman John Podesta. Papadopoulos claims he told senior Trump campaign officials about these ongoing meetings with the Russians in order to facilitate meetings between Trump and the Russians. Most importantly, the reason we know all of this is because Papadopoulos took a plea deal weeks ago and has been providing information to Mueller as part of that deal. In other words, he flipped.These indictments are just the tip of the iceberg in the vodka, with rumors abounding of indictments for former National Security Advisor Michael Flynn and his son. Let’s take a look at how the cast of characters responded to Mueller’s first move:
- White House Press Secretary Sarah Huckabee Sanders – “Today’s announcement has nothing to do with the President, has nothing to do with the President’s campaign or campaign activity. The real collusion scandal, as we have said several times before, has everything to do with the Clinton campaign, Fusion GPS, and Russia.”
- Former Trump campaign advisor Michael Caputo – George Papadopoulos was a volunteer “coffee boy”. Caputo didn’t address why Trump listed Papadopoulos as a foreign policy advisor to The Washington Post, called him an “excellent guy”, and included him in national security policy meetings.
- State media outlet Fox News – As the indictment news broke, Fox & Friends dove into the most pressing issue of our times: the new cheeseburger emoji and why it shows cheese below the patty rather than on top.
- Failed steak salesman Donald Trump – When asked about a meeting on March 31, 2016 in which Papadopoulos told Trump, future Attorney General Jefferson Beauregard Sessions III, and other members of the Trump national security advisory team, “that he had connections that could help arrange a meeting between then-candidate Trump and President Putin,” Trump said, “It was a very unimportant meeting. It took place a long time ago. I don’t remember much about it.” You may recall that just last week Trump said he had, “one of the greatest memories of all time.”
- Senator Al Franken (D-MN) – Attorney General Jefferson Beauregard Sessions III has testified to Congress multiple times that he was not aware of any connection between Russia and the Trump campaign. Just last month, Senator Franken asked him, “You don’t believe that surrogates from the Trump campaign had communications with the Russians? Is that what you’re saying?” Sessions replied, “I did not, and I’m not aware of anyone else that did, and I don’t believe it happened.” In light of Papadopoulos’s released testimony, Franken said, “I don’t think [Sessions] told me the truth. I think that on different occasions he either has a terrible memory or he is deliberately not telling me the truth.”
“Coffe Boy” George Papadopolous (the young man with a fivehead on the left side of table) at a national security meeting with then-candidate Trump and then-Senator Jefferson Beauregard Sessions III on March 31, 2016.
The TrumpShaker of the Week
Don’t Need Your (Version of the) Civil War – The man we all foolishly tricked ourselves into believing was the adult in the room, Chief of Staff John Kelly, claimed this week that, “The lack of an ability to compromise led to the Civil War.” In fact, there were many compromises since the founding of the nation – The 3/5 Compromise, The Missouri Compromise, The Kansas-Nebraska Act – that allowed the evil institution of slavery to continue. All of that compromise was still not enough for the Southern states that wanted to expand slavery. Even after the Civil War there was further compromise. Lincoln allowed Confederate states back into the United States if just 10% of the state’s voters pledged allegiance to the U.S. That compromise and many more to come allowed white supremacy to run the South for another 100 years. John Kelly is wrong, there was too much compromise with slavery and continues to be too much compromise with bigotry in the United States.
Diversity of Reactions – This week tragedy struck Manhattan when an ISIS-inspired terrorist drove a truck along a bike path, killing 8 and injuring 11. Trump’s reaction to the first domestic attack tied to an international terror organization during his presidency varied dramatically from reactions in similar circumstance of his predecessors. Rather than try to bring the country together, he lashed out at Chuck Schumer, the Democratic senator from the state that was just attacked. He blamed Schumer for the visa lottery program that Schumer helped sponsor 30 years ago (and that George H.W. Bush signed) which the terrorist used to come to the United States years ago. Immediately after the attack, Trump tried to use the terrorist’s immigrant status for political gain, calling for an end to the diversity-lottery programand elimination of the ability of immigrants to apply for green cards for other family. These reactions from Trump also stand in stark contrast to his response following Charlottesville when he waited two days to say anything (“It takes a little while to get the facts. So I don’t want to go quickly and just make a statement for the sake of making a political statement. I want to know the facts.”) and Las Vegas (“Perhaps [a discussion on gun control) will come, not for now.”).
Hear No Incompetence – More than a month after Hurricane Maria, 18% of Puerto Ricans are still without water and 66% without electricity. This week, House Republicans cancelled at the last minute ahearing with FEMA Director Brock Long and San Juan mayor Carmen Yulin Cruz. The hearing has not been rescheduled.
Eternal Judgment – Even if Mueller runs Trump out of town tomorrow, the Trump presidency has already guaranteed a long legacy. The Senate has switched into overdrive to approve Trump’s judicial nominees to lifetime appointments. Just last week, the Senate confirmed four circuit judges (one step below the Supreme Court) and one district judge. These justices are at the top of the right wing’s wish list, including for example, newly confirmed Amy Barrett (former Scalia clerk) who called Roe v. Wade an “erroneous decision.”
While ideologues, at least those judges were qualified. Trump’s latest nominee for the U.S. Court of Appeals is Leonard Grasz. Grasz received a unanimous (14 votes to 0!) rating of “not qualified” from the American Bar Association. I actually think the official designation is “Sub-Wapnerian”. He’s the first Circuit Court nominee since 2006 to receive a unanimous “not qualified” designation and that person withdrew his nomination. In case you want to dismiss the ABA as biased, 40 of 42 Trump’s nominees have been rated “qualified” or “highly qualified”.
Will Get Fooled Again – Meet the new election, same as the old election. It’s almost one year since we fell through the looking glass and elected an unqualified, insecure, narcissist, racist, recreational golfer as President. Well, based on the upcoming elections, it looks like we’ve learned almost nothing from that experience. Republicans continue to rally around budding theocrat Alabama Senate candidate Roy Moore, who this week suggested that the federal judge who stopped Trump’s proposed ban on transgender people in the military should be impeached. In Virginia, the Republican candidate is running a campaign based on fear of immigrants and protecting confederate statues. This is in the same state where just a couple of months ago someone was killed by white supremacists during a rally to protect confederate statues. Also, in Virginia, automated “bots” on Twitter are being used to create narrativesalong race lines and a reporter was violently arrested while covering the campaign.
Rather than join together to stop this poison, Democrats are instead scoring own goals. Earlier this week, for some reason (that reason being to sell books), former DNC chairwoman Donna Brazile released an excerpt from her upcoming book that relaunched the narrative that Hillary stole the nomination. Senator Elizabeth Warren then amplified that message by agreeing that the DNC “rigged” the nomination for Hillary. Bringing these issues up a week before the election was a completely self-destructive thing to do. Also, as with all Hillary scandals, what really happened was much more nuanced and not as advertised. The DNC has serious problems to be addressed, but it should fall way down the list of issues Democrats should be publicly fighting about. The infighting is killing Democrats’ chances on the local level as well. In Virginia, a progressive group, Democracy for America, made a big show this week of stopping direct aid to the Democrat gubernatorial candidate Ralph Northam after he said he would oppose sanctuary cities. Instead DFA said it would concentrate on down ballot candidates. While it was busy cutting off its nose, the DFA didn’t realize or care that doing this may depress turnout for Northam, hurting down ballot candidates this year AND that if Republican Ed Gillespie wins then Republicans will be in control of redistricting after the 2020 census – making winning future seats in Virginia for progressives much more difficult. As Charles Pierce writes, “The Democratic party is finding a way to f*ck this up.”
The Chevron Chastity Belt – Showing more chutzpah than a 1950’s cigarette ad exec, Secretary of Energy Rick Perry tried to make the case that fossil fuels help stop sexual assault in Africa by literally shining lights “on those types of acts.” That is why, of course, there are no assaults in Las Vegas. I’m looking forward though to Perry next bringing back Electra Woman and Dyna Girl as fossil fuel super heroes.
Scientists Need Not Apply – EPA Head Scott “The Once-ler” Pruitt banned scientist who receive grants from the EPA from serving on the EPA’s science advisory panels. In other words, the EPA has decided they don’t need the advice from the country’s best scientists. While dismissing leading scientists, The Once-ler is replacing them with an executive at a company that incinerates waste, a consultant to the oil and chemical industries, the vice president for research at Phillips 66, and a vice president at North Dakota Petroleum Council. Leading this pollutant posse are a UC Irvine professor who said that, “Modern air is a little too clean for optimum health,” and a Texas toxicologist who said in regards to smog, “I haven’t seen the data that says lowering ozone will produce a health benefit. In fact, I’ve seen data that shows it might have a negative health benefit.” I hope they join forces with Rick Perry so they can burn everything to stop sexual assault while toughening up our lungs.
I’ve Got Good News That’s Bad News – Speaking of the EPA, there was some good(?) news this week in that the Trump Administration apparently did not influence the release of the National Climate Assessment. The bad news is that the report says that we’re screwed unless we start taking action immediately. Oh, I forgot, I also have tragic news; the Trump Administration confirmed it will promote coal and natural gas at the upcoming UN climate conference.
No More Immaculate Conceptions – Earlier this year, the Trump Administration weakened the Affordable Care Act requirement that plans cover birth control. Any company can now refuse to cover birth control based on moral or religious objection. The University of Notre Dame has taken advantage of this new flexibility by ending all birth control coverage for faculty, staff, and students.
GOP’s Choice – After letting the Children’s Health Insurance Program, which covers 9 million children, expire over a month ago, Republicans in the House finally passed a bill reauthorizing CHIP. However, since the House Republicans just can’t be happy unless someone is losing insurance, they tacked on a provision to the bill shortening the grace period on overdue premiums from 90 to 30 days. The Center on Budget and Policy Priorities estimates that this may lead to 688,000 people losing health coverage. This bill will likely die in the Senate. The are not enough votes right now for this “make Peter sick to insure Paul” health plan.
Some Birds Aren’t Meant to Be Caged – Last week, I mentioned the tragic story of ICE placing Rosa Maria Hernandez, a 10-year-old girl with cerebral palsy recovering from surgery, in a refugee center away from her family. She has been released!
Thumbs Down for Facebook
Featured Articles of the Week
Let’s all do something to make the world a better place this week. The picture above is of 9-year-old Jacob Thompson. Jacob was diagnosed with Neuroblastoma at age 5 and his time now is very short. He asked for one more Christmas celebration as he will likely not make it until December 25. Please take a moment and send Jacob a card -> Jacob Thompson c/o Maine Medical Center, 22 Bramhall Street, Portland, ME 04102