Deficits don't matter any more; tax cuts for the rich do | Arkansas Blog

Friday, October 20, 2017

Deficits don't matter any more; tax cuts for the rich do

Posted By on Fri, Oct 20, 2017 at 7:42 AM

click to enlarge HECKUVA DEAL: Sen. Mitch McConnell thiinks the budget resolution was great, not to mention the tax cuts to come.
  • HECKUVA DEAL: Sen. Mitch McConnell thiinks the budget resolution was great, not to mention the tax cuts to come.
Remember when the crushing federal deficit was a primary point of Republican campaign attack?

That was then.

The Senate yesterday in a remarkable piece of hurry up procedural subterfuge endorsed a budget outline that, the Washington Post notes,  "opens the door to expanding the federal deficit by $1.5 trillion over 10 years."

One point five trillion.

The vote was a procedural step to allow passage of a tax-cut bill by a simple majority and thus bypass a filibuster. The tax cuts — though the precise plan is largely secretive so far — are expected to be a windfall to the wealthy and add to the deficit. Republicans promise never-delivered trickledown. They also insist that tax cuts for the wealthy won't go into plutocrats' pockets but will be poured into the pockets of working stiffs in higher pay. Uh huh.

Two Arkansas-related elements: The chances apparently are increasing of the loss of a deduction of state income and property taxes on itemized income tax returns. This will punish Arkansas taxpayers who itemize (about one in every four according to the Tax Foundation) because — thanks to politicians beginning with Winthrop Rockefeller — we have a meaningful state income tax. This change is meant mostly to hammer blue states like California, New York and New Jersey.

Also coming is the holy grail of Republican tax-cutting — elimination of the estate tax.  Recent surveys show a huge number of people still think —- wholly in error — that most estates are subject to taxation. Only a tiny handful are — those worth more than $10 million when a spouse is a survivor.

In 2016, a total of 5,400 estates, or .2 percent of those nationally, had any estate taxes to pay. In Arkansas, only 30 families owed taxes on inherited wealth in 2016. THIRTY. Sen. Bernie Sanders has estimated, by the way, that the estate tax removal would be a $53 billion windfall to the Walton family, beneficiaries of wealth created by ancestors and largely untaxed to date because it's in the form of appreciated stock received virtually free. They have enjoyed a preferential income tax treatment on billions in the dividend on the stock, too.

I know. Arkansas Republican politicians will still call the estate tax a deadly peril to the family farm, though no farm has ever been lost to the estate tax and a farm of sufficient value to incur an estate tax is no 40-acre pea patch.

PS: The budget outline to pay for the new deficit and tax cuts for the wealthy includes a $1.5 trillion cut in Medicare and Medicaid.

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