There’s Bait and Switch in Republicans’ Tax Reform

For years we have heard, from left and right alike, of the need to simplify the confoundingly complex and grotesquely bloated tax code. The Republican resolve born of control of both Congress and the presidency told the party the moment has finally come.

Not quite yet, it turns out. Not simplification. As ever, protests have greeted attempts to eliminate each “loophole”, deduction or exemption whose elimination is needed to pay for the tax rate cuts, with other high-minded goals sidelined. Doing away with state and local taxes as a deduction has riled high-tax states.
Michael Ramirez
Health costs, from insurance to drugs, must already surmount a percentage-of-income hurdle to be deductible; now the proposition is to disallow health expenses altogether. The standard deduction would double, but personal exemptions would be taken away. But nothing tops this: it’s not enough that mortgage interest will be retained as a deductible. Real estate industry lobbyists don’t want you to have that doubled standard deduction. Why? Because less people would itemize, with the result that tax savings from subtracting mortgage interest would become less of an inducement to buy more expensive houses.

the bracket racket

But what happened to simplify? That great and noble goal immediately vanished, lost to the usual Republican mania for cutting taxes again, the seeming core reason for the Party’s existence. We are not hearing any talk about hacking away at complexity. But we forgot, didn’t we, that in the Trump/Republican plan, tax brackets will be “collapsed” from seven to three. When the president unveiled the plan in September, a Wall Street Journal editorial heralded “the party’s blueprint for tax reform”, saying, “The good news is the blueprint would fold seven brackets into three -12%, 25%, 35%”. The New York Postpraised the plan as “the most pro-growth” since Reagan, that collapsing the tax brackets from seven to three would simplify our “messy tax system”. Michigan Republican and now-retired chairman of House Ways and Means, Dave Camp, labored long on a sweeping plan that led off with the same magical three brackets to replace the seven in 2014. The Journal called that “the heart of the plan”. Too many brackets seems to be where all the complexity lies.

What’s going on? Bracket reduction always tops the list of every Republican tax proposal. It’s their show pony for simplification, as if to say, “Those seven brackets are just too mind-boggling, so look what our plan we’ll do. We’ll collapse them to only three!”. The actual complexity of the tax code causes everyone to use software or a preparer like H&R Block, so few have been near a Form 1040 for a couple of decades. So it’s easy to hoodwink the public. They’ll never realize there is no simplification at all in reducing the number of brackets — you still find which one matches your taxable income and make the calculation. Nothing changes.

the swamp

So much for reform, leaving in place and unattended the 70,000-plus page tax code — “10 times the size of the Bible”
says Camp. Americans spend over six billion hours and about $170 billion every year on their returns, says the IRS. The instructions for the primary fill-in form for individuals — Form 1040 — is 106 pages filled with tangles of rules that branch to other rules, worksheets to fill out to see if you qualify for this or are subject to that, references to IRS publications you need to download if your case isn’t covered in 1040’s instructions. And then there are the other forms to fill out — interest and dividends, deductions, capital gains and losses, etc. — each with its own instructions.

That’s what needs simplification. Camp and Rep. Sandy Levin, also of Michigan, had 11 bipartisan working groups tackling different parts of the tax code, coming up with proposals to condense overlaps and throw out excess baggage (15 different tax breaks just for education, for example). What became of all that effort?

the rich need incentives

The reduction from 39.6% to 35% is branded by the Left as a tax cut for the rich, who instead should pay their “fair share”. Fair is for them always an increase, never a decrease. The Right argues that the higher the tax, the greater the disincentive to work. Conservatives are fond of this rule because it justifies tax cuts. It comes from economists, for whom the inviolable rule is, if something goes down, something else must go up — and vice versa. If you lower taxes on the wealthy, they will rise up, work harder, start businesses, grow the economy.

In the real world populated by non-economists, the notion seems silly. If taxes are raised on someone earning millions, does he or she really begin to neglect the job, come in later every morning, take Friday’s off, let the company go to hell because the take-home dollars have declined? That says only money motivates people.

Marcus Ryu, a Silicon Valley entrepreneur who started in 2001 what became a $5 billion company, said in a New York Times op-ed that, among the many reasons for starting a company, he had never heard anyone say “I would have started a company, but tax rates were too high, but then George W. Bush cut tax rates, so I did”. That’s akin to Warren Buffet’s well-known comment that “I have yet to see [anyone] shy away from a sensible investment because of the tax rate on the potential gain”.

Those three rates — the 12%, 25%, 35% — are the same as in the one-page plan that Donald Trump rushed to deliver in April so he could claim action on taxes before his 100 days were up. Yet, given all that time, Republicans have not figured out to what level of income each of those rates apply, so the effect on revenues and costs and each year’s deficit cannot be assessed. Put more bluntly, they have deliberately not come forth with those levels to make sure the Congressional Budget Office (CBO) and various groups such as the Tax Policy Center cannot make 10-year projections.

White House oracles

That frees the administration to make claims that may prove false, another likely bait and switch in the making. On “Good Morning America”, Gary Cohn, Trump’s chief economic adviser, proclaimed, “Wealthy Americans are not getting a tax cut”. When still a nominee for Treasury Secretary, Steven Mnuchin pledged,

“Any reductions we have in upper-income taxes will be offset by less deductions, so that there will be no absolute tax cut for the upper class”.

This October he is still saying, “The objective of the president is that rich people don’t get tax cuts”.

But in addition to the reduction to 35%, the Republican plan would repeal the 3.8% surcharge on investment income, as well as the alternative minimum tax, which will be a huge windfall for wealthy taxpayers such as Trump himself, as explained in “A Bespoke Tax Plan for the Trump Family“. Repeal of the inheritance tax is also on the blueprint, although that may be dropped as too obvious a giveaway to the rich.

As for Mnuchin’s deductions, the plan would keep the mortgage interest and charity deductions, and jettison the others on Schedule A. But one of the key deductions intended for the chopping block and needed to pay for tax cuts is state and local taxes (given the acronym SALT). Those on the right enjoyed that one, because at least it does the most damage to filers in the big blue states, New York and California. But cancelling that deduction is drawing fire from other states; many have significant SALT levies as seen in this list. Add to that, property taxes. Removing those taxes for those who itemize their deductions hurts the middle class and, it could be said, augurs the odious prospect of paying taxes on taxes, on income never received.

So that has left Mnuchin repealing his guarantee, what had been called the “Mnuchin Rule”, now saying, “It’s very hard not to give tax cuts to the wealthy”.

forget frugality

Senate Republicans have passed a budget that allows them a deficit of $1.5 trillion over the next 10 years. That’s drawn a lot of comment: The party that for the last six years demanded of Obama that the cost of every proposal be matched by savings elsewhere, has thrown that precept aside and is happy to spend with abandon on its own policies.

Passing a budget is a prerequisite called for by the Senate’s own rule that allows passage of tax bills by 51 votes rather than face a Democratic filibuster requiring 60. The rule says the budget cannot end in a deficit after those 10 years. But the Trump-Republican plan looks (with those income brackets levels guessed at) likely to produce deficits of $2.6 trillion or so over the coming decade, according to the Tax Policy Institute, with similar estimates by other think tanks. So the budget that erases the deficit by 10 years out is a sham.

down is up

But that troubles Republicans not at all. Since economist Arthur Laffer drew a diagram on a napkin at a D.C. restaurant — a yarn we relate in “Have Republicans Finally Abandoned the Laffer Curve?” — Republicans have had a magical incantation that makes deficits disappear, albeit in their imagination. They tell us that tax cuts lead to a growing economy that yields enough new tax revenue to fill the revenue hole the tax cuts have dug. Tax cuts pay for themselves! There has never been an instance where this has proven true, yet it is taken as a given. A Journal editorial says, flat out, “The revenue hole would be filled by faster economic growth”, so CBO’s estimate can be ignored because they underestimate such “feedback”. And not just filled. “This plan will cut down the deficits by a trillion dollars”, said Mnuchin.

Reagan cut taxes, but revenues plunged and he had to raise taxes part way back. Clinton raised tax rates and the economy soared until the dot.com plunge in 2000. Bush cut taxes but the economy limped along and improvement only came later. Obama’s tax increases were in his second term, and that’s when the economy did best. A correlation between tax cuts and amped up revenue is lacking. North Carolina politicians claim the miracle just happened there, which awaits validation by someone other than a Republican from North Carolina, but their claim is offset by Kansas, where tax cuts led to huge revenue losses necessitating drastic cuts in public services.

The French economist Thomas Picketty — noted for the stir his book caused for showing the troubling reason why inequality has been increasing — together with colleagues at Harvard and the University of California, Berkeley, analyzed tax cuts from 1970 to the years before the 2008 financial collapse in a number of industrialized countries. They found no meaningful correlation to growth. For those on the right who claim tax cuts are needed to spur growth, why are going unnoticed the records set every other day by stock indexes that reflect corporate profits, by unemployment at an extreme low, and by a million or so jobs going begging? Where is this growth going to come from to pay for their tax plan? Hasn’t it already happened in one of the longest — at eight years plus — recoveries ever? And with the economy surging ahead and so much needing to be done, such as repairing the nation’s infrastructure, why do we need these tax cuts? Simplification, please.

Does Trump Want Iran to Become Another North Korea?

It was one of his campaign promises — to get rid of “one of the worst negotiated deals of any kind that I have ever seen”. Itching to end it, but having acquiesced twice in the past, the president has this time decertified the nuclear stand down agreement with Iran. When did Donald Trump’s “base” ever ask for this promise, as well as the long list of hostile actions he will now have the U.S. take against the Islamic Republic?

His national security team has strongly recommended that he keep the U.S. in the
accord. In a statement in September, over 80 disarmament experts urged him to honor the U.S. pledge, calling the agreement a “net plus for international nuclear nonproliferation”. The IAEA (International Atomic Energy Agency) nuclear inspectors on site in Iran declared that their latest inspections found no breach of the agreement, no grounds for decertification. All five partner nations that negotiated the deal along with the U.S. — Britain, China, France, Germany and Russia — do not want to renegotiate what is working.

But Donald Trump will have none of it. After all, isn’t the JCPOA (Joint Comprehensive Plan of Action) another of Barack Obama’s successes on Trump’s demotion list? Based on nothing, no violations, he said as he grudgingly recertified a second time back in July, “If it was up to me I would have had them noncompliant 180 days ago”. The president now complains, “They are not living up to the spirit of the agreement. I can tell you that”. There was no “spirit of the agreement”. The JCPOA is an arms control agreement, nothing more.

In accepting the pact with Iran, Congress passed legislation that requires the president to recertify every 90 days that Iran continues to be in compliance with the agreement. Upon decertification, Congress has 60 days to decide whether to restore the sanctions — the suspension of which was the quid pro quo for Iran’s taking a number of steps to halt its nuclear program. Trump can claim that by decertifying he has done his part to fulfill his pledge to the voters who never asked for this, but he has made it clear that if Congress does not reimpose sanctions, he will cancel U.S. participation in the accord outright.

The protocol imposed restrictions on Iran to halt their development of a nuclear bomb at a point where experts believed success was only months away. The agreement only postpones their achieving that goal. It hobbles the effort for 10 years — 15 for some aspects. It does not end it. It buys time during which the Obama administration — notably the president himself and then-Secretary of State John Kerry — wistfully thought a more moderate regime might take hold in Iran.

The accord does not stop Iran’s other adventuring. The troublesome nation has continued to advance its missile program. It has supported terrorist organizations, backed the Houti rebellion in Yemen. Its militias have been fighting ISIS in Iraq, which it has turned into a dependent state, reliant on Iran for all its needs other than oil, its stores stocked with goods made in Iran. It has always supported Bashar al-Assad in the Syrian civil war, the
From The Economist
country being a pathway to Lebanon, where Iran funds and provides a formidable arsenal of weapons and rockets to Hezbollah, which is surely building toward another far more powerful attack on Israel. Thus has Iran laid down a virtual easement of control all the way to the Mediterranean.

The deal’s detractors presume Iran is cheating. The accord allowed Iran to refuse access to its major Parchin military complex, which gave rise to the suspicion that nuclear work continues there. The agreement mothballed two-thirds of the country’s 19,000 centrifuges, leaving behind only older, less capable models, but allowed continued research and development of centrifuges still more advanced than those sitting in storage. Ambassador Haley has said that Iran is guilty of “multiple violations” of the JCPOA, but with no basis in fact. (It is in violation of U.N. resolution 2231 that calls upon Iran to forgo work on “ballistic missiles designed to be capable of delivering nuclear weapons”. Does she know the difference?) Former ambassador to the U.N., John Bolton, in a Wall Street Journal op-ed, warns that, “Even U.S. intelligence could be in the dark if Iran is renting a uranium enrichment facility under a North Korean mountain”.

Those opposed to the deal have been particularly incensed by its calling for the return to Iran of their own funds frozen by the West when the shah was overthrown in the revolution of 1979. When the agreement was signed, the total was spoken of as from $100 billion to $150 billion, with the fear that this will fund the country becoming the hegemon of the region and potentially making it invulnerable to sanctions. However, the amount looks to be far less. The Washington Free Beacon, which, as a far right group, has an interest in painting the worst case, comes up with only $33.6 billion that had been transferred as of a year ago. Given his views, it is unlikely that President Trump has authorized any transfers since.

Those calling for renegotiation ask why the original agreement didn’t rein in all of Iran’s provocations, but that was never on the table, and was certainly never offered. The accord never contemplated going any further than being an arms control agreement limited to nuclear weapons. When Donald Trump called the deal “an embarrassment” in July, he had evidently lost sight of that limitation. The U.S. wanted the deal, wanted to stop Iran’s onrushing development of a weapon, and to get that result had to make concessions. Iran had 19,000 centrifuges spinning when the talks began and an enriched stockpile already in hand. The “breakout” time — how soon they could further enrich enough to make a bomb — was estimated at a mere 2-3 months. That’s what the JCPOA put a halt to. And today, Iran has indicated that, if sanctions are restored, they will pick up where they left off.

Iran’s extracurricular mischief must be dealt with separately — blacklisting companies with Revolutionary Guard ownership (reportedly 20% of the valuation of the Tehran stock exchange), sanctions on companies and individuals involved with Iran’s missile program, and Mr. Trump just announced those steps as part of his decertification address. But it makes no sense to cancel the one restraint already in place, doubling the Iranian problem by creating a second intractable nuclear aspirant to deal with.

Forgotten is how difficult it was to arrive at a deal. The talks took a grudging 20 months, punctuated by disputes and walkouts and needing repeated deadline extensions as negotiators fought over final terms and language. The Iranian negotiators showed an unyielding resolve to hold out unless one after another concession was granted. The concern on our side of the table was that they would quit the talks.

The other concern was that, absent a deal, there were signs the sanctions would soon fall apart. Both Britain’s and Germany’s ambassador to the U.S. had warned that the sanctions would probably erode were the pact to fail. Former CIA director James Woolsey thought “the sanctions regime is slipping; the world is tired of these sanctions”.

Which tells us that if the U.S. Congress goes along with Trump’s decertification and votes to restore the sanctions, the five partner nations will not follow suit. They are already prospering, cutting deals with and selling goods to Iran. There will be no appetite to cancel this new opportunity and “snap back” the sanctions, which is what had been threatened should Iran cheat. Iran knows this, knows that Trump will find himself odd man out, as with so much else at home and abroad.

Iran has already said renegotiation would mean that every concession Iran made would be back on the table. Iran’s Foreign Minister Javad Zarif asks, “Are you prepared to return to us 10 tons of enriched uranium”, the nuclear fuel Iran shipped to Russia as part of the agreement, about 98% of what it had produced? Iran President Hassan Rouhani shut the door more firmly:

“There’s absolutely no returning to negotiations. This deal is not something anyone can touch. It’s like a building. If you pull one brick the entire structure will collapse”.

Mattis said in his confirmation hearing in January that “when America gives her word, we have to live up to it”, but we now have Ambassador Haley saying about decertification at the U.N.:

“This is about U.S. national security. This is not about European security. This is not about anyone else.”

That left the five nations that laboriously worked out the Iran accord alongside us stunned.

The North Koreans have already seen Trump abandon TPP (Trans-Pacific Partnership), the 12-nation alliance for trade, and drop out of the Paris Accord, in which virtually all the nations of the world vow to cut carbon emissions, so withdrawing from the JCPOA tells the North Koreans what they already know: the U.S. cannot be trusted.

Trump’s answer to it all is expressing a desire to increase the U.S. nuclear arsenal tenfold in violation of the rest of our arms control agreements.

Another Reason Hillary Lost: Trump Had a Secret Weapon

The weapon was and is a 41-year-old bearded Kansan who towers over 6’2″ Donald Trump named Brad Parscale. When interviewed by Lesley Stahl on CBS’s “60 Minutes” in early October,
Parscale with the President
some of the techniques he divulged about his work as digital director of the Trump campaign had the seasoned Ms Stahl reacting with “Whoa, wait a minute!” and “You’re kidding”.

Working out of his house in San Antonio, he says he was eating a ham and cheese omelet at IHOP in 2010 when he got an e-mail entirely out of the blue — Could he please call the Trump organization. Jared Kushner needed a website for the real estate business. Work continued for the family. Then in 2015 he was told, “Donald Trump is thinking of running for president. We need a website in 2 days”. He was low bidder at $1500 and won. By the end of the campaign he had a hundred employees, was running data collection, advertising, and digital fund raising and $94 million passed through his company, much of paying for ads, says Stahl.

and his weapon?

“I understood early that Facebook was how Donald Trump was going to win”. Barack Obama used Facebook in 2012 but its stepped up technology had since become more precise in differentiating people by their natures and preferences. “Facebook now lets you go to places possibly that you’d never go with TV ads, Parscale said. “Now I can find 15 people in the Florida Panhandle that I would never buy a TV commercial for.” To learn how to find those individuals, Facebook staff “were embedded inside our offices” at Trump headquarters. That was the revelation that brought “Whoa, wait a minute!” from Stahl.

“They were embedded in your campaign?”

“Google employees and Twitter employees. They were there multiple days a week three-four days a week, two days a week, five days…”.

“What were they doing inside…?”

“Helping teach us how to use their platform. I asked each one of them by e-mail, I want to know every single secret, button, click, technology you have. I want to know everything you would tell Hillary’s campaign plus some, and I want your people here to teach me how to use it”.

Lesley asked how did Parscale know they weren’t Trojan horses?

“Cause I’d ask them to be Republicans and I would talk to them”.

“You only wanted Republicans”.

“I wanted people who supported Donald Trump from their companies”.

“And that’s what you got?”

“Yeah. They already have divisions set up that way. They already have groups in their political divisions that are Republicans and Democrats”.

“You’re kidding”.

Apparently not.

and Hillary?

Lesley then asked whether there were social media company embeds in Hillary Clinton’s campaign.

“I heard they didn’t accept any of their offers”.

“They offered an embed and they said ‘no'”?

“That’s what I’ve heard”.

People in the Clinton campaign confirmed to “60 Minutes” that the offer was made and turned down.

microtargeting

Parscale’s operation accordingly sent out to Facebook users hundreds of thousands of individualized ads, the differences generated programmatically and tailored to individual likes and dislikes. “Average day, 50 60 thousand ads”. Parscale’s words tumble forth rapid-fire, often interrupting each other. “Changing language, words, colors. Changing things because certain people like a green button better than a blue button”.

Stahl was rather incredulous at that one.

“So let’s say I like a green button. How do you know I like a green button”.

“Because I gave you red, blue buttons and you never click on ’em. What it is is what can make people react? What catches their attention. Remember, there’s so much noise on your phone. Or on your desktop. What is it that makes it go ‘pfff”, I’m goin’ stop and look?”

In the wake of the loss to Obama, the Republican National Committee had developed a giant database to identify the issues voters care about. One reason Parscale thinks Trump won was an issue the database exposed but the Clinton campaign missed: infrastructure.

“It was voters in the rust belt that cared about their roads being rebuilt, their highways, their bridges. They felt like the world was crumbling, so I started making ads that would show the bridge crumbling”.

He showed three ads — one on tax simplification, the second on making childcare costs tax deductible, the third that expanded energy production would create half a million jobs — and made the point that targeting has become so granular that three next door neighbors could each have gotten a different one of the three.

The ads carried a donate button, evidently in the color the person liked best. In addition to votes, his ads pulled in $240 million in small amount donations.

Parscale is now working on Trump’s 2020 campaign.

A Bespoke Tax Plan for the Trump Family

“It’s not good for me, believe me”, said Donald Trump about the tax plan developed by him and a group of six from the Senate, the House and his administration. From a president infamous for inventing his own reality, this claim dwarfs all that came before. When he said in January, “We are going to be cutting taxes massively”, it turns out he meant his own.

what they meant by simplification

To begin, the plan would eliminate the Alternative Minimum Tax (AMT). That is a second way of calculating taxes required of the wealthy to prevent their huge deductions from wiping out any obligation to pay taxes. Proof enough of how this will hugely benefit the rich is Trump’s own tax return of 2005 leaked to the media. He had written off more than $100 million in business failings, mostly paper losses that the White House described as “large-scale depreciation for construction”, that led to taxes of only $5 million of his declared income of $150 million when the primary method of computation was used. But the AMT requires high earners to test whether they owe
more via its secondary method. Its worksheet backs out deductions and computes taxes on a formula that had Trump pay $38 million instead of $5 million. It is not hard to see why Trump and the wealthy in general want to get rid of the AMT. Trump plans to serve himself and others in his bracket this enormous windfall.

rates at random

Corporate taxes will be its own subject and one for intense debate over the coming months. For now, we’ll look only at what the basic tax rate change would do for Donald Trump.

Without any “scoring” by the Congressional Budget Office to determine what will happen to the deficit and national debt, the Trump plan calls for reducing the corporate tax rate from 35% to 20% (trump wanted 15%). That rate pertains to standalone “C” corporations. But something like 95% of all businesses are set up as “pass-throughs” — partnerships, S-corporations, limited liability companies — whose profit or loss results flow through onto their owners’ personal tax returns where they are taxed at the personal rates. While that rate can be as high as 39.6% (more, with the Obamacare surcharge), the usual case fits into a tax bracket less than the 35% rate for independent corporations, which is why owners have set up their businesses in this form.

But with the corporate rate dropping to 20%, pass-through owners would find themselves stranded, still paying personal rates that are now higher than 20%. So the Trump plan says that’s not fair, pass-through businesses should get a lower rate, too. How about no more than than 25%?

Which happens to be very helpful to Donald Trump. A March letter to the president from law firm Morgan Lewis tells us

“…you hold interests as the sole or principal owner in more than 500 separate entities…Because you operate these businesses almost exclusively through sole proprietorships, S corporations, and/or partnerships, your personal federal income tax returns reflect income that is earned by these entities…

Fortune magazine estimates that the 25% rate will slash the taxes on profits from Trump’s myriad of enterprises by a third. How much that would be in dollars, we don’t know, but the question is a major reason why he refuses to make public his tax returns. Given his claim that he is a multi-billionaire, it’s fair to say that Trump is giving his enthusiastic blessing to a tax feature that will pay him many millions yearly.

More alarming than even his self-serving, we can expect a stampede of high-earners — lawyers, doctors, lobbyists, and yes, real estate developers — to re-engineer their businesses so as to classify as business profits the money formerly passing through as personal wage income subject to the higher tax rates for individuals. The Wall Street Journal acknowledges in an editorial that avoiding

“this will require some finesse, as tax writers must develop guardrails that prevent lawyers of hedge-fund operators from dumping wages into pass-throughs and paying less than salary folks.”

So easily said but how is that to be audited when a vast new echelon emerges to fudge their tax returns and in the process further widen the gap between the ordinary citizen and an upper stratum of society accorded ever more lavish concessions.

death not taxes

The biggest of all bonuses Trump hopes to pay himself is the complete elimination of the estate tax. It is as if he had run for the presidency only as a maneuver to transfer his claimed billions in assets to his children without their paying a dime in taxes.

Killing the estate tax is the age old dream of Republicans, who are obsessed with having to pay what they call “death taxes”. Whenever the subject arises, we hear the bleats from politicians about the good people of America “having to sell the family farm” to pay the taxes. And in this go ’round Mike Pence would not disappoint. There he was in a speech promoting the tax overhaul at the end of September lamenting the plight of dairy farmer Hank Choate, who “says he needs a tax cut so he can keep the family farm when we repeal death taxes, once and for all.”

Note that Choate did not say he is selling the farm; Pence probably had difficulty finding an actual victim. Pence’s problem is that the non-partisan Tax Policy Center estimates only 50 entities will pay estate taxes in 2017, and that includes small businesses, not just the folkloric farms of the Republican myth.
About 0.4% of the family farms that passed into estates in 2016 had to pay estate taxes. And the average rate to be paid by the 50 is estimated by the Center to be only 6%.

Why so low? Because tax law already allows the transfer of the first $5,450,000 free for an individual (and twice that for a married couple). The average value of those 50 entities is projected to exceed that threshold by a small enough taxable amount that the tax is expected to be only to 6% of the total value of the transfer.

Republicans successfully float that melodrama every time, causing the distraction you just read to explain it away. It serves to obscure the far bigger point that every dollar of labor, of day to day work, is taxed. Why should the gains enjoyed by those whose assets have appreciated in value by the time of their death not be taxed at all? The other Republican refrain is “why should I be taxed twice”, another ruse to confuse because, first, there’s that whopping free allowance and, second, they are not being taxed twice as only the gains on asset values beyond that threshold are taxed. Democrats should counter keenings about the family farm with their own flagrant example: how about the wealthy art collector who bought years ago, sold for a profit in millions, and on a huge windfall of passive income would pay no taxes at all according to the Trump and gang of six plan.

to be determined

After so much time it is extraordinary that the Trump plan was a mere nine pages, with very little specifics, and no indication of what it will cost in lost revenue to the government. Republicans were supposedly the party of fiscal restraint but that has proven to be only to restrain Democrat desires during the Obama presidency. Now that they are in power, they have unhesitatingly voted for a budget resolution that okays a $1.5 trillion deficit over the next 10 years. Budget watchdogs think the Trump tax plan could cost several times that. This page will make it a continuing topic.

Wrangling over tax “reform” will be the hotly contested subject for weeks to come. But first we need the specifics. But all the while during the process, we should bear in mind that we tax payers seem to exist to make the Trump family far richer.

It Doesn’t Take Absolute Power to Corrupt Absolutely

Tom Price: Out
How does the average citizen grasp the workings of the mind of Tom Price, the disgraced and now former Secretary of Health and Human Services? How many transformations would we have to undergo in order to reach a state of mind so corrupted with self-importance as to think oneself deserving of private jets and military transports just to ferry oneself about to this or that meeting at exorbitant cost to the nation?

One doesn’t charter a private jet unconsciously. Nor decide that military personnel and aircraft should be commandeered instead of booking a commercial flight. It takes a belief that one has gone beyond the rest of us and is entitled to our payment of tribute — in this case, our taxes. In contrast, Kathleen Sebelius and Sylvia Matthews Burwell, the two secretaries of HHS under Barack Obama,
flew commercially while in the continental United States during their combined eight years.

Yet in the brief span of seven and a half months, Price ran up a tab that might be as high as $1 million, accordingly to reporting from Politico, whose investigative reporter, Rachana Pradhan, broke the story by a stakeout watching Price come and go on private aircraft at Dulles. Price has offered to repay “his share” which he seems to think is only only $52,000. Spokespersons say he has, but no proof has been forthcoming.

Politico‘s first story said that in the single week before their September 20th salvo, Price took private jets for five flights. HHS press people told the White House that this would be a one-day media story, said Politico‘s Dan Diamond. “They didn’t realize how much we had”. When the further revelations poured forth about Price, the White House said they felt ambushed. That in effect admitted they knew nothing of what would quickly be exposed about the spending abuses of first Price and then several others. It said the Trump White House exerts no control over its own cabinet and its conduct, even though use of military transport can only be authorized by the White House.

Another secretary being questioned is Treasury Secretary Steven Mnuchin for taking a government plane with his wife to Fort Knox, Kentucky, for a meeting that just happened to be in the path of the solar eclipse in August. A department statement said, of course, this hundred year event did not factor into the travel plan.

Worth an estimated $300 million, Mnuchin had earlier nevertheless requested a military jet for himself and wife Louise Linton’s honeymoon this summer for their honeymoon. They had a “concern for maintaining a secure method of communication,” according to ABC News. That one was at least denied. A spokesman said a U.S. Air Force jet typically costs around $25,000 an hour to operate which, for a trip to France, Italy, and Scotland, would have run up quite a tab.

Newly under scrutiny is Scott Pruitt, who heads the Environmental Protection Agency. Pruitt’s behavior in general is odd. Doors to his floor at EPA headquarters are frequently locked, reported the New York Times, and employees need an escort to gain access. He is accompanied by armed guards, presumably out of paranoia given his mission to dismantle the agency once he has reversed its policies. Those meeting with Pruitt are told to leave cellphones behind and are not permitted to take notes. The Times‘ August article said he often goes to other rooms to make phone calls, and a more recent report says he has remedied that by having the EPA spend $25,000 of our money on a soundproof communications booth in his office. Peculiar enough, but in addition, Pruitt wanted custom modifications to prevent any data leaks or eavesdropping. That tripled the cost.

The EPA’s inspector general has begun a probe into Pruitt’s frequent travel to his home state of Oklahoma. Pruitt is not a Congress member, needful of connecting to the constituency he or she represents. He is a cabinet secretary running an agency of thousands of employees in Washington D.C. What’s with Oklahoma? And who is paying? As that state’s attorney general, Pruitt was in thick with the oil and gas industry, suing the agency he now runs 14 times to force regulatory changes in its favor (see full treatment in “Is Global Warming Causing Extreme Weather? Not in Trump World“). Might the IG discover that they are paying for these flights?

Interior Secretary Ryan Zinke has been found to have used charter flights as well, one of them to his home town in Montana. More later.

Veterans Affairs chief David Shulkin is being looked at to see who paid for what during a 10-day European swing with his wife this July.

The Politico exposé has spurred the House Oversight and Government Reform committee to request travel records from the White House and 24 federal departments and agencies.

chutzpah

The most notorious of Price’s five trips that week was from D.C. to Philadelphia, just 135 miles away. Spokespersons from agencies recite vapid evasions such as this one, covering for Price:

“As part of the HHS mission to enhance and protect the health and well-being of the American people, Secretary Price travels on occasion outside Washington to meet face to face with the American people to hear their thoughts and concerns firsthand. When commercial aircraft cannot reasonably accommodate travel requirements, charter aircraft can be used for official travel.”

That last sentence is the standard line, delivered by others being looked at as well. The expectation is that no one will check. Politico noted that,

Price’s charter left Dulles at 8:27 a.m., and a United Airlines flight departed for Philadelphia at 8:22 a.m.

D.C. to Philly is a trip better covered city-center to city-center by train or car at nominal cost. Instead, Price sent us a bill for about $25,000, according to Ultimate Jet Charters.

A week into its story, Politico detonated the 500-pound bomb that Price had ordered up military aircraft and crews for flights that likely cost $500,000 — flights to Geneva, Berlin, Beijing, Tokyo and elsewhere, his wife often aboard. A White House official confirmed that President Trump’s staff approved the flights. When Trump chastises Price’s extravagance, it is at his White House’s own mismanagement.

Price, a surgeon who had switched to politics and become the Budget Committee chairman in the House, made his name as an ardent opponent of government spending and waste. Extraordinarily, considering the agency he heads, be endorsed the Trump budget’s cut of $6 billion from the National Institutes of Health in March, and an 18% cut to HHS itself.

Alarms did go off during his confirmation hearing when he was questioned with some intensity about stock trades in healthcare companies while serving on a House panel that oversaw Obamacare and other health matters. Price yielded not at all to questions about timing and implications of insider trading, and even evinced an attitude of entitlement, of offense that he should be questioned on his private investing.

Price had disappointed Trump on other counts. He was named HHS secretary on the strength of his having developed a complete Obamacare replacement plan, but once in that office he did little to push for passage of the two bills put forth by the House. He pretty much vanished from view at the time, off instead on a three-nation trip in May to Africa and Europe.

On overseas trips he helped himself to military aircrafts and crews, reported Politico as more of what they had found tumbled forth in the days after their first story. They found overseas military flights that had probably cost about $400,000. A senior Treasury official told ABC News that use of military planes was usually reserved for cabinet members whose jobs deal directly with national security.

The web publication recorded the Price had taken at least 26 flights on private charter planes at taxpayers’ expense since early May. Price seemed obtuse to why he faced criticism for outlandish spending, calling it politically motivated. “There are folks who want to see this president fail…who want to see this administration fail…but that’s not dissuading us at all.”

the others

Zinke and his wife took military planes to Norway, the need for which not even the Interior Department website troubles to explain. He chartered two planes out and back between St. Croix to St. Thomas in the U.S. Virgin Islands to attend the centennial of the Danish government turning the islands over to the United States, claiming that nothing else was available.

The bigger fuss was not persuasive. A charter from Las Vegas to the northwest tip of Montana was labeled by the media as a trip to Zinke’s hometown; they jumped on his having spent the night at his home in Whitefish. But he was there to speak at the Western Governors’ Association’s annual meeting in Kalispell the next morning. The flight left Vegas at 8:30 p.m. PST and landed in Kalispell around 1:30 a.m., which sounds like alternatives were indeed not available.

Another clamor that may be overboard is Shulkin’s 10-day European trip. He was there for meetings with Danish and British officials about veterans’ health issues, and if he took advantage to tack on vacation days, paying his and his wife’s way, what’s the harm, as long as the touring wasn’t the real reason for the trip.

Burwell, who served as HHS secretary for the final 2½ years of the Obama administration, used a military jet for travel to Havana, Cuba, according to former HHS aides. She took her husband. Two former aides said she had reimbursed the government for his cost. Did Burwell use military planes on other trips overseas? No response to requests for comment. Two former aides said her husband accompanied her on the trip to Cuba and reimbursed the government for the costs of the trip. But HHS’ current spokeswoman undercut that by stating, “It’s our understanding that previous secretaries have never reimbursed for spousal travel”. But she cast doubt on her veracity telling a reporter that Tom Price reimbursed the agency for the cost of his wife’s trip abroad, but would not say when he did so.

the most entitled

The worst offender? Donald Trump. The president and his family are ringing up travel costs at a pace that far outstrips previous presidents. One of Trumps’ most important campaign imagery was his pledge to “drain the swamp” of cronyism and corruption, but his administration is rife with it, starting at the top with Trump’s own multiple conflicts, at the very minimum the Mar a Lago initiations doubled to $200,000, the memberships at his golf clubs, and the money pouring into the Trump International Hotel in D.C. — all honey pots for those looking to curry favor with the president. Add to that his choice of several Goldman Sachs alumni as advisers and the richest cabinet in history by far.

And, of course, there are Trump’s own luxurious travel habits at taxpayer expense, his weekends to Mar a Lago and the Bedminster club in New Jersey. Trump is on track to spend more money on travel in 2017 than Obama spent in eight years combined. (And yet Fox News was as late as July this year still nattering about Obama’s travel costs). Trump had called Obama an “habitual vacationer” in a 2011 tweet.

The website Trump Golf Count has spotted the president on the links 36 times by the end of September, and he has visited the courses his company owns 60 times since inauguration. The Secret Service is running out of money and is losing agents fed up with the heavy overtime demands of covering a president who won’t stay put.

A government report in 2013 tallied the cost of an Obama golf outing at $3.6 million. Salon makes the point that if that cost is applied to Trump, he has cost taxpayers $180 million.

On the Friday afternoon of Price’s dismissal, the president expressed his displeasure saying, “I’m not happy, okay? I can tell you, I’m not happy” as he stepped away for yet another costly flight to a weekend away from Washington.