From the President – 7-12 – Weekly Update

It took a while, but the dueling letters” by the wealthy to either tax them more or figure out better ways to create wealth opportunities for others has just gotten another response. 

 

While it will come as no surprise as to where the Washington Post editorial board might fall on this debate, they began with a bit of a shocker by saying that a “wealth tax isn’t the best way to tax the rich.” 

 

But ‘let’s not get carried away. The reasons they state for not liking a wealth tax are mainly administrative and practical, since all the European countries that tried it failed. 

 

No they have a better and much simpler idea: “”repeal those provisions of the 2017 tax law that restored favored treatment to large estates; to reduce the favorable treatment of capital gains in general; and to eliminate the huge break for profits on the sale of stock by people who inherit it from rich benefactors.”” Not exactly on our side about taxing success!

 

What I found interesting in their short proclamation was they ‘didn’t reach for even more. The corporate tax rate – which was permanently dropped 14 percentage points by the Tax Cuts and Jobs Act (TCJA) raises a significant amount of money if it could roll back. 

 

For every percentage point they move it up, they can bring roughly $100 billion into the coffers to help pay for the large number of “free” items that we all know ‘aren’t really free!

 

If “saner” minds can hopefully talk progressive policymakers down off the ledge of a wealth tax, we know there are more direct threats to the Estate tax than just an editorial screed. As we reported earlier, the House Ways & Means Committee has already approved a bill to rollback the doubling of the Estate Tax exemption included in the TCJA. 

 

We ‘don’t expect that vehicle to see legislative action anymore as we believe it was just a “marker” for the House Democrats to outline their tax priorities in any tax extenders final package. 

 

However, it ‘doesn’t end there!

 

Just this week a Senator proposed hiking the estate tax to benefit Social Security. Senator Chris Van Hollen (D-MD) introduced a bill, the Strengthen Social Security by Taxing Dynastic Wealth Act, which would return the estate tax exemption to 2009 levels, and also raise the top estate and gift tax rate to 45% from 40%.  

 

“I can think of no better way to use that revenue than to strengthen Social Security,” Mr. Van Hollen said in a statement.

 

 

Sadly, we believe more is to come. We are hearing that the House Democrats want to address the State and Local Tax Deduction (SALT). As you may recall, the TCJA limited the SALT deduction to $10,000, and the limit is not indexed for inflation. Previously, taxpayers could have deducted from taxable income all their state and local property tax as well as either their income or sales taxes. 

 

This provision mostly hurt “blue” states like New York, New Jersey, California, Connecticut and Maryland where the high state and local taxes were ignored as they could just be credited to an individual’s federal tax liability. We ‘don’t yet know exactly what changes are being envisioned by the House (full repeal, raising the $10k limit, etc.) but we do know that they have penciled in “taxes on the wealthy” to pay for what is ostensibly a give back to the wealthy since more than 96 percent of the people impacted by SALT are those in the top 20 percent of the income distribution (those making $150,000 or more in 2018). 

 

We will continue to oppose these measure and work to educate policymakers on the ill-advised attacks on the successful, but we need your help to make that happen!

Forbes takes a deeper look at the consequences of a couple recent Supreme Court tax rulings in North Carolina v. Kaestner and Minnesota v. Fielding. 

CAMPAIGN TRAIL

BIDEN: Former vice president Joe Biden took advantage of a loophole in the tax code that Barack Obama tried to plug. The Wall Street Journal’s Richard Rubin reports: “Mr. Biden and his wife, Dr. Jill Biden, routed their book and speech income through S corporations, according to tax returns the couple released this week.

 

They paid income taxes on those profits, but the strategy let the couple avoid the 3.8% self-employment tax they would have paid had they been compensated directly instead of through the S corporations. The tax savings were as much as $500,000, compared to what the Bidens would have owed if paid directly or if the Obama proposal had become law.”

 

 

SANDERS: ‘NO, MINUS ONE’: Haim Saban, the billionaire Democratic donor, spoke with The Hollywood Reporter ‘s Tatiana Siegel about which presidential candidate he might back. “‘We love all 23 candidates,’ Haim says, then pauses. ‘No, minus one.

 

I profoundly dislike Bernie Sanders , and you can write it. I don’t give a hoot. He’s a communist under the cover of being a socialist. He thinks that every billionaire is a crook. He calls us ‘the billionaire class.’ And he attacks us indiscriminately. ‘It’s the billionaire class, the bad guys.

 

‘ This is how communists think. So, 22 are great. One is a disaster zone.’” 

 

In an op-ed for The Post, Bernie Sanders writes that racial equality can be met by attacking the wealth gap: “Example after example shows that corporate exploitation disproportionately affects black people. Black Americans lost 40 percent of their wealth in the 2009 housing crisis, and were the target of predatory lenders.

 

Black Americans are more likely than white Americans to be paid a minimum wage salary, and black Americans stand to benefit disproportionately from a $15 an hour federal minimum wage. … The racial wealth gap lingers in part because the politicians who could close it are funded by the very corporate donors who continue to benefit from it.

 

Gross inequality persists largely unchallenged despite the United States’ massive wealth because myths about racial inferiority and the ‘undeserving poor’ justify the worst effects of unfettered capitalism. As long as corporations can rely on the indifference to black lives as a cover for their exploitation, they will continue to do so.”

 

TRUMP: Billionaire Bernie Marcus to donate majority of fortune, support Trump for re-election.