Speaking of the undeserving super rich, did you catch Donald Trump Jr.’s tweet the other day about Halloween candy?
He meant to make a point about the evils of socialism, but he made a better point about what’s wrong with the new House Republican tax plan.
In a tweet on Tuesday, Trump Jr. posted a photo of his daughter Chloe and wrote: “I’m going to take half of Chloe’s candy tonight & give it to some kid who sat at home. It’s never to early to teach her about socialism.”
As you might imagine, the backlash online was immediate. Nothing is quite so annoying as an entitled rich boy lecturing the rest of us about hard work. Our favorite response came from J.K. Rowling, the creator of Harry Potter, who tweeted back: “Fill her bucket with old candy left by her great-grandfather, then explain that she has more because she’s smarter than all the other kids.”
A spirit of unearned entitlement runs all through the House Republican tax plan. It would give a giant tax cut to corporations that have failed to significantly raise workers’ salaries and benefits in decades while rewarding shareholders and top executives with generous dividends and stock options.
It would pad the income of the ultra-rich by eliminating the alternative minimum tax, which assures that wealthy people who claim lots of deductions pay at least something in taxes.
It would allow billionaires to pass along to their kids every last dollar of their great wealth — unearned candy in the Halloween bag — by eliminating the estate tax.
The heart and soul of the Republican tax plan is a cut in taxes on corporate profits to 20 percent, from 35 percent. The argument is that businesses will invest the savings and grow and pay their workers more in salaries, bonuses and benefits.
If this were mostly true, wouldn’t that be terrific? But it is heavily untrue. And if the real truth is that most of the new corporate revenue would be showered on CEOs, shareholders and other investors —35 percent of whom are foreigners — why should the rest of us get on board?
The dangerous truth for our democracy, though critics dismiss such talk as “class warfare,” is that the wealth and income gaps in the United States have been growing since the late 1970s, with the richest 1 percent of Americans now owning 40 percent of the nation’s wealth. Any new tax plan that fails to build in ways to narrow this gap should be treated as dead on arrival.
We believe in merit. We believe that people who work hard and smart and long should make more money than people who don’t. More power to them. But to pretend that 1 percent of Americans have come to own fully 40 percent of our nation’s wealth through sheer merit is absurd. And to pretend that the bottom 80 percent of Americans are so lazy and unproductive as to deserve just 7 percent of the nation’s wealth, which is the sad reality, is offensive.
Last year, the average CEO of a large American firm was paid 271 times more than the average worker, including wages and stock options, according to the Economic Policy Institute. That worked out to $15.6 million per CEO. In contrast, the average CEO in 1978 was paid only 30 times more than the average worker. And in 1965, the pay gap was even smaller — just 20 to 1.
“Exorbitant CEO pay means that the fruits of economic growth are not going to ordinary workers, since the higher CEO pay does not reflect correspondingly higher output,” warns the Economic Policy Institute.
We pride ourselves that America’s free-market economy rewards merit. But increasingly it does not. Our tax laws undermine our meritocracy, allowing for a greater concentration of the nation’s wealth into ever fewer hands. Twenty people, according to Forbes magazine, now own as much wealth as half of all Americans.
Nothing in the House Republican tax plan addresses this assault on the merit principle. It rewards big business over small business, and the wealthy over the middle-class. It would double the standard tax deduction for individuals and married couples, but wipe out many of the other deductions and credits they now enjoy. The deduction for state and local income taxes would be eliminated. The property tax deduction — of huge importance to many Chicago-area homeowners — would be capped at $10,000.
Meanwhile, the one direct tax tool designed to keep the United States from devolving into a self-satisfied aristocracy of inherited wealth — the estate tax — would apply only to estates of more than $11 million, rather than the current $5.5 million, and would be eliminated completely in six years.
Chloe would get all the candy, whether or not she works a day in her life.
For most of the rest of us, the House Republican tax plan is a lot more a trick than a treat.
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