This Thanksgiving, a Feast for the Super-Rich and Scraps for the Rest of Us
As Americans gather for Thanksgiving, we can only hope that the richest among us have the good graces to give thanks for the bounty they expect to receive in a few days thanks to how Donald Trump and the Republican leaders on Capitol Hill conned millions of voters.
The plutocrats should set aside a moment to thank all the voters suckered by the Trumpian promise to drain the swamp. What Trump really meant was to drain the pockets of Americans who make less than $500,000 a year so the richest of the rich can have more.
Dueling tax bills are being debated in Congress, with a vote likely by Dec. 8. House and Senate bills have differences, for sure, but they share the same basic feature: huge tax savings for big business and the rich, while more than half of Americans may see their income taxes rise between now and the end of 2027.
As for the official government version of events, businesses would reap 59.2% of the tax savings under the Senate bill. The Congressional Joint Committee on Taxation estimates corporate income taxes will drop by $837 billion over the next 10 years.
Every dollar of the tax savings would come from either cutting government services or adding to the federal debt. Remember when candidate Trump denounced our federal debt as much too large and said he would shrink it? And then there was his suggestion that Uncle Sam, following Trump’s lead, should walk away from our debts.
The other 40.8% of the Senate tax savings would go to individuals. But don’t think that means you will see your federal taxes fall by 40%. If your family makes $50,000 a year, figure you will save, at most, a buck a day, which is a small fraction of 1% of your total income.
Should you be married with more than two children or if you count your mother, father or other relatives as a dependent, then your federal income taxes will likely go up, not down.
More than half of the $577 billion in individual tax savings comes from a fiscal chimera or, if you prefer a nicer image, a fiscal unicorn. Eliminating the requirement that all Americans buy health insurance or pay a penalty—a very Republican idea prior to 2009—would save just shy of $300 billion.
But there’s nothing saved, just a tax accounting gimmick. The reason Republicans originally proposed mandatory health insurance is that all of us eventually need healthcare and those who lack health insurance end up getting their bills paid by the rest of us one way or another. So, what the Senate tax bill really does is shift this expense out of the income tax account and add it to the ledger of bad debts that must be picked up by society through other means, such as higher medical costs for everyone else, increased local taxes or reduced profits at commercial hospitals.
That leaves just $280 billion to split among 325 million Americans over 10 years.
Depending on whose analysis you rely on, the $1 million-and-up income class, roughly one taxpayer in 300, will get from 38% to a majority of the tax savings.
Measured as a percentage of their income, the million-dollar to multi-billion-dollar annual income group will on average see a 3.2% increase in their after-tax income.
Those making $100,000 to $200,000, itself a rarified territory, will see their after-tax income grow by 0.6%, that’s $1,200 for someone at the top end of the group.
The near-poor, making $30,000 to $40,000, will save perhaps 0.2% of their meager incomes. If your family makes $36,500 annually, your tax savings will come to roughly 20-cents every day.
If you make $12 million a year, figure your after-tax income will rise by at least $360,000 annually under either bill. That’s about one grand a day.
Looked at another way, for each $1 the near poor will save, the family making $12 million-a-year will save $5,000.
As for everyone who makes less than $1million a year, perhaps we should give thanks, too. After all, Congress could pass a bill that exempts the super-rich from taxes entirely. That would be perfectly legal.
It might even be politically doable given the gullibility of tens of millions of American voters who thought Trump was their economic savior and still don’t get that he is their economic predator.
Featured image: From Rich Kids of Instagram