Surprise: tax “reform” = tax cuts for rich people

The NYT Editorial sums it up nicely:

This much is clear: The tax “framework” published by Republican leaderson Wednesday would greatly increase the federal deficit, would not turbocharge economic growth and could leave many middle-class families worse off by ending deductions they rely on. It would do little or nothing to improve the lot of the working class, a group President Trump says he is fighting for. It would instead provide a windfall to hedge fund managers, corporate executives, real estate developers and other members of the 1 percent. And can it be just a happy coincidence that Mr. Trump and his family would benefit “bigly” from this plan? …

Under the guise of helping small businesses thrive and thereby creating jobs, the Republicans propose to lower the tax rates paid by people who earn money through private equity firms, partnerships, limited liability companies and other businesses — the very entities that Mr. Trump earns much of his income from. The framework would tax such so-called pass-through income at 25 percent, rather than at ordinary income tax rates. But here’s a depressing truth: The administration’s claims to the contrary, the plan would not help most small businesses, since they already pay less than 25 percent because their incomes put them in lower tax brackets. It would help millionaires, with the 400 richest households saving an average of $5.5 million, according to the Center on Budget and Policy Priorities

It’s hard to predict the economic impact of these skeletal proposals. But most experts agree that they could raise the federal budget deficit by trillions of dollars. As they have so many times in the past, Republicans will surely argue that the cuts would spur growth, and, in some measure, pay for themselves. This is the old supply-side hooey. In fact, over time the increased borrowing for unproductive tax cuts could depress growth by driving up interest rates.

It should also be noted that none of this is real reform.  This is just tax cuts for rich people with a few tweaks.  We could use real reform, bu this sure as hell ain’t it.

Meanwhile, a NYT news article actually pretty boldly points out that Republicans only care about deficits when Democrats are in charge

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About Steve Greene
Professor of Political Science at NC State http://faculty.chass.ncsu.edu/shgreene

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