Corporate Taxes

Right and Left React to the Republican Push to Cut Taxes

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From the Left

Photo

Senator Chuck Schumer and Gov. Andrew M. Cuomo of New York held a news conference opposing the Republican tax plan in Selkirk, N.Y., on Monday. Credit Nathaniel Brooks for The New York Times

Morris Pearl in Democracy Journal:

“While the Trump tax plan is a long, complex series of changes to the tax code, the elimination of the federal estate tax ranks high among the most egregious ideas.”

Mr. Pearl is the chairman of the Patriotic Millionaires, an organization of wealthy individuals worried about economic inequality. He defends the estate tax, which the Trump administration is seeking to revoke in its plan. “Were every child to be able to succeed in this country regardless of their family circumstances, perhaps concern over concentrating wealth would be unfounded,” he writes. “That is unfortunately not the case.” Read more »

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Justin Miller in American Prospect:

“Quietly, Republicans are also pushing a territorial taxation provision that would make it far easier for multinational corporations to avoid paying even a new 20 percent rate by providing further incentive to stash profits in offshore tax havens.”

Mr. Miller argues that a provision in the Republican tax plan will encourage corporations to shift their profits to overseas tax havens. Republicans want to move to a territorial system that mirrors how much of the world structures its corporate taxes — a system that does not tax foreign profits at all. However, Mr. Miller says he is unconvinced that Republicans will install adequate protections against corporations storing their profits in offshore tax shelters. If they were serious about this, he writes, they would “simply end the deferral of corporations’ foreign profits and tax them annually like domestic profit.” Read more »

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Helaine Olen in The Washington Post:

“It’s already hard enough to make the American system of saving for retirement more difficult, confusing or disadvantageous for lower- and middle-income savers. But Republicans just might be on the verge of accomplishing this — all in an effort to game the budget process.”

Even though President Trump said on Twitter that there would be no changes to 401(k) plans, Ms. Olen explains, the issue is not as resolved as he would have you believe. On Wednesday, there were reports that the retirement savings plans were still up for negotiation. Ms. Olen argues that the problem is not just Mr. Trump’s shifting positions on the retirement accounts, but, more broadly, how willing Republicans are to toy with retirement plans “all in an effort to game the budget process.” Read more »

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Finally, From the Center

Veronique de Rugy in Reason:

“The good news is that there’s a debate in Washington about how to make the tax code less destructive. The bad news is that lawmakers will be able to achieve much less than they otherwise could because of bad policy priorities.”

Ms. de Rugy, writing for the libertarian Reason, accuses Republicans of being fiscally irresponsible with their tax plan. She says she worries that “failing to restrain spending today while cutting taxes means that taxes will have to go up in the future to pay for larger deficits.” She adds that while it may be politically expedient, giving the middle class a large tax cut is counterproductive: “There’s very little economic growth to be expected from reducing the marginal tax rates on middle-income earners.” Read more »

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Justin Fox in Bloomberg:

“I figure this is as good a time as any to run through what’s wrong with the 401(k), or at least what’s wrong with having made it a centerpiece of our country’s retirement savings system.”

Mr. Fox explains why the 401(k) tax break should not be “untouchable,” even if it is politically popular. Millions of taxpayers benefit from the plan, he writes, but far more get nothing from it. “If the idea is to actually reduce the tax deductions for retirement savings, not just shift them across time,” he argues, “it’s maybe not so crazy.” Read more »

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Josh Barro in Business Insider:

“If you’re going to give a tax break for business income, you have to clearly define what’s a business and what’s just work. That’s surprisingly hard.”

Mr. Barro applauds the Republican goal of simplifying the tax code. However, he notes, one provision in the plan will complicate a lot of people’s taxes. The preferential tax rates for so-called pass-through businesses, which allow owners to be taxed on the income from their business, can be abused, or worse, put business owners at a disadvantage. The solution? “Don’t enact the tax preference in the first place.” Read more »

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Wendy Pettit

Wendy Pettit is a writer for NYT and writes for other publications on her spare time. She lives in Chicago with her husband and her dog Zuko.

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