Monthly Archives: November 2017

What Republicans say when asked why their tax bill benefits the rich most of all

By Jeff Stein

Sen. Cory Gardner (R-Colo.), Sen. John Barrasso (R-Wyo.), Senate Majority Leader Mitch McConnell (R-Ky.), Sen. Roy Blunt (R-Mo.) and Senate Majority Whip John Cornyn (R-Tex.) speak on Capitol Hill. (Carolyn Kaster/AP)

A number of studies have made clear that the tax bill Senate Republicans are trying to pass this week offers some of its biggest rewards to wealthy Americans. The GOP’s Tax Cuts and Jobs Act would cut taxes on wealthy Americans, while raising taxes on those earning between $10,000 and $75,000 over the next decade, according to the Joint Committee on Taxation, Congress’s official scorekeeper. The Tax Policy Center found that everyone outside the top 5 percent of income earners would see a significantly smaller tax cut in both the short term and the long term.

At a time of high inequality, when many of the economy’s rewards have already flowed to the wealthy, critics of the plan say this is an unnecessary gift. The plan “provide large benefits to the wealthy but little or nothing to everyone else,” says the Center on Budget and Policy Priorities, a left-of-center think tank, citing its large corporate tax cut and reduction of the estate tax. An NBC/Wall Street Journal poll from September found that 62 percent of Americans think taxes on the wealthy should go up. Twelve percent think they should go down.

But Senate Republicans say that they are not worried that the bill would disproportionately help the wealthy — at least according to 10 interviews with Republican senators Tuesday. Here’s why:

Sen. James Lankford (R-Okla.): “Obviously, there will be more benefit for people that pay more — if you pay a lot more, and there’s any change for that, then there will be a greater difference on it . . . You have the bottom 50 percent of earners who don’t pay …read more

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Rubio, Lee push plan to raise corporate tax rate, give benefits to poor

By Jeff Stein

Ivanka Trump walks with Sen. Marco Rubio (R-Fla.) after a meeting with other senators on Capitol Hill in June. (Melina Mara/The Washington Post)

The Senate Republican tax plan would leave out millions of the poorest families from expanded child tax credits, but Republican Sens. Marco Rubio (Fla.) and Mike Lee (Utah) are pushing a plan to include those families — and to pay for it by taking some proposed tax breaks away from corporations.

Senate Republicans’ bill in its current form would expand what’s known as the “Child Tax Credit,” boosting it from the current maximum of $1,000 annually per child to $2,000 annually per child.

But that increase is largely limited to families who make enough money to pay income taxes. Families who don’t make enough for income taxes and instead pay only payroll taxes don’t qualify for the full increased credit, instead only getting an additional $75 annually per child than they do under current law.

Rubio and Lee on Wednesday proposed changing the Senate bill to extend more of the new benefit to such families, by lowering the level of income at which the benefit begins to kick in, extending more in new credits families who don’t pay income taxes.

To offset the new tax benefits for the poor, Rubio and Lee’s amendment would raise the bill’s proposed corporate tax rate. The current corporate tax rate is 35 percent, but as written, the Senate bill would drop that to 20 percent. Rubio and Lee proposed instead dropping it to 22 percent.

Rubio and Lee also want to raise revenue by phasing out the new benefit at a lower income level than the bill currently proposes to do.

Under current tax law, CTC’s benefits start declining once families make more than $110,000 annually, but the bill would expand eligibility to some families earning up …read more

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Trump’s Fed chair nominee says Wall Street regulations are ‘tough enough’

By Heather Long

Jerome Powell is President Trump’s nominee for the chairman of the Federal Reserve. (Photo by Drew Angerer/Getty Images)

Jerome “Jay” Powell, President Trump’s nominee to lead the Federal Reserve, told senators Tuesday that he thinks regulations on Wall Street banks are “tough enough,” a remark that made Democrats cringe. Much like a Supreme Court nominee, Powell needs a majority of senators to vote for him to be America’s top economic policymaker. If confirmed, Powell would start in early February.

Both Republicans and Democrats hammered Powell at his confirmation hearing over his plans for regulating Wall Street. Trump and many Republicans campaigned on rolling back regulations on banks, rules that they say are too onerous and are preventing small businesses from getting loans. But Democrats worry that watering down the rules put in place after the 2008-09 financial crisis would trigger another massive meltdown and taxpayer bailout of the financial sector.

“Honestly, senator, I think they are tough enough,” Powell said when Sen. Elizabeth Warren (D-Mass.) pressed him on whether he would like to see any regulations on banks strengthened.

“This worries me,” Warren responded.

[Senate lawmakers strike deal to free dozens of large banks from rigorous post-crisis rules]

Powell, a Republican with a reputation in Washington as a bipartisan consensus builder, has tried to walk a careful line of supporting many of the regulations put in place on banks after the Great Recession, while also signaling his willingness to make the paperwork “more efficient,” especially for smaller banks.

“The banking system is healthy,” Powell said, adding that he believes America no longer has any “too big to fail” banks because of the regulations currently in place, including stress tests. But later in the hearing he acknowledged that “there’s certainly a lot of regulatory burden” and that …read more

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