Sunday, March 27, 2016

Why Either Trump's or Cruz's Tax Plans Would Be the Largest Redistributions to the Rich in History

Former Clinton labor secretary Robert Reich. (photo: Steve Russell/Toronto Star)
Former Clinton labor secretary Robert Reich. (photo: Steve Russell/Toronto Star)

By Robert Reich, Robert Reich's Blog
26 March 16
he tax cuts for the rich proposed by the two leading Republican candidates for the presidency – Donald Trump and Ted Cruz – are larger, as a proportion of the government budget and the total economy, than any tax cuts ever before proposed in history.

Trump and Cruz pretend to be opposed to the Republican establishment, but when it comes to taxes they’re seeking exactly what that Republican establishment wants.
Here are 5 things you need to know about their tax plans:
  1. Trump’s proposed cut would reduce the top tax rate from 39.6 percent to 25 percent – creating a giant windfall for the wealthy (at a time when the wealthy have a larger portion of the nation’s wealth than any time since 1918). According to the Center for Tax Policy, the richest one tenth of one percent of taxpayers (those with incomes over $3.7 million) would get an average tax cut of more than $1.3 million each every year. Middle-income households would get an average tax cut of $2,700.

  2. The Cruz plan would abandon our century-old progressive income tax (whose rates increase as taxpayers’ incomes increase) and instead tax the amount people spend in a year and exclude income from investments. This sort of system would burden lower-income workers who spend almost everything they earn and have few if any investments.

  3. Cruz also proposes a 10 percent flat tax. A flat tax lowers tax rates on the rich and increases taxes for lower-income workers.

  4. The Republican plans also repeal estate and gift taxes – now paid almost entirely by the very wealthy who make big gifts to their heirs and leave them big estates.

  5. These plans would cut federal revenues by as much as $12 trillion over the decade – but neither Trump nor Cruz has said what they’ll do to fill this hole. They both want to increase the military. Which leaves them only two choices: Either explode the national debt, or cut Social Security, Medicare, and assistance to the poor.
Bottom line: If either of these men is elected president, we could see the largest redistribution in American history from the poor and middle-class of America to the rich. This is class warfare with a vengeance.

+35 # tswhiskers 2016-03-26 15:32
So what else is new? By now we Dems all know the basic dogma of the Rep. Party: Cut upper class taxes to almost nothing and take the difference out of the hides of middle and lower class Americans i.e. the Sheriff of Nottingham School of Economics. WE DON'T WANT TO TAX THE ARISTOCRACY; AFTER ALL THEY KEEP US IN POWER. As always one wonders why the blockhead voters in the Rep. Party still haven't figured it out.

+18 # Farafalla 2016-03-26 22:05
This clip is worth sending around.

-11 # economagic 2016-03-27 07:38
Not really. We already know the big picture, and the details -- much less their implications -- are explained in a way that confuses more than it enlightens. If Professor Reich also wrote the mangled title ("either/and") he must have done the whole thing in his sleep! (On the other hand, the title may have been written by the staff, or by Marc Ash himself, all of whom are undoubtedly sleepless over the floundering funding.)

+8 # Velma 2016-03-26 22:54
So vote in your primaries and caucuses for the democrat you prefer but be ready to campaign for and vote for WHICHEVER democrat gets the nomination or this prediction of a Cruz or Trump term will come true.

+3 # tclose 2016-03-27 09:10
Agreed - Dems cannot afford to let purity be the enemy of stopping these bastards.

As usual, Prof Reich boils down the economics to the bottom line. Let that motivate us to do what needs to be done, come November.
+4 # kyzipster 2016-03-27 07:34
The GOP's so called "Fair Tax" is their Holy Grail. People who insist there's no difference between the two parties aren't acknowledging the facts. Quite a few red states have eliminated the state income tax entirely, shifting more of the tax burden to working people and the poor. There's a movement to accomplish this at the federal level.

Of course our media is obsessed with Trump's sensationalism and Sanders' socialism, unconcerned about the extremism of the conservative agenda.

+2 # Marshalldoc 2016-03-27 09:08
Wanna see real 'class warfare'? Elect either of these neoliberal reprobates, allow Congress to pass those tax cuts, let the results bake a year or so and... Bingo! Class Warfare. With luck left-wing, socialists will win; but by no means guaranteed.
+3 # Astoriapepe 2016-03-27 09:58
Class warfare already is running, and since the Reagan administration, the oligarchs are winning. The disappearance of the Middle Class, and the impoverishment of the Working Class (manufacturing jobs going abroad and service jobs not providing a living income) are the results of the economic policies carried out by both republican and democratic administrations .

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