Thursday, April 27, 2017

That Dastardly, Dreaded, Darth Vader Death Tax!

Mr. Cohn and Mr. Mnuchin stood before the press corps this morning and sung their happy song about President Trump's grand opulent plan (GOP) for "massive" tax cuts for the rich, uh, no wait, for everybody.

Just don't ask me about details. It's all good. Believe me.

Taxes are a lot about math, and big numbers, so I'm not sure, but if I've got this right: Taxes are how the government gets money into it's bank account, the inflow, the income.  And then spending is about how the money goes out of that account. Did I get that right?

If I'm right about that, then they are talking about cutting down on the government in-come.

But, wait: It's all good, because even though we are not going to have as much income from taxes, we actually will have more income from taxes because everyone in the nation will be making so much more money when we unleash the energies of the economic horses with the tax cuts, so the government will actually make more money. 
So, the tax cuts will mean people actually pay more taxes, but they won't mind.
Got that?
Well, they'll pay more taxes because they'll make more money they'll be in higher tax brackets, but that won't bother anyone because there will only be three brackets which is so much simpler than five tax brackets and we all want simplicity.

Actually, wouldn't one tax bracket be even simpler?
So why do we have brackets at all?
Oh, I remember now, it's about making the people who benefit the most from the economy pay more than those who do not.
Brought the highest bracket down to 65% Is that what you want now?

So Mr. Mnuchin said the government would make more money with lower taxes and he said John F. Kennedy, a DEMOCRAT, showed how well this works.
Of course, Professor Google informs me what JFK did was to bring a post World War II tax system from a 90% top bracket down to 65%, as he noted that the idea of that system was to restrain economic growth and consumer demand  during a time of war when there were rations on consumer goods and high  levels of government expenditures. So the historical citation and analogy from the Republicans is, to say the least, a bit problematic.
So everyone wants to know how this will affect his own taxes and someone asked, well what income would be in the lowest 12% bracket and how much do I have to make before I go to the 22% bracket? Those are details. Minutiae, Mr. Mnuchin said. Don't bother Mnuchin with minutiae. We'll let you know. You'll be happy. I promise.

But both Mr. Cohn and Mr. Mnuchin wanted to say the best thing about this new tax plan--well, not really a plan but an outline of wish list items--is it would eliminate the dreaded DEATH TAX. 
When asked whether the Death Tax would be phased out or cut outright, Mr. Cohn said it would be immediately phased out, which is to say it would be suddenly slowly eliminated. Wow, these Republicans have a way with words!
Would you buy a used car from this man?

Mr. Mnuchin added that the death tax is double taxation, that you pay taxes on the money you earn during life and once again at death. And that it wrecks the lives of small farmers who are trying to pass their farms and estates on to their families.

This all seemed very nasty, so I consulted Professor Google who referred me to Chye-Ching Huang from the "Center on Budget and Policy Priorities" who says what Mr. Mnuchin and Cohn are promulgating here is a batch of standard myths (also known as untruths, or lies) about the "death tax" :

1. The "death tax" is not really a death tax since everybody dies but only 2 of 1,000 estates pay any estate tax at all. So if only death and taxes are certain in life, well the tax at death is one tax which is not a certainty, as it  is true for only 0.2% of the population.

2. The double taxation thing is not true because large estates mostly consist of "unrealized" capital gains that have never been taxed and this is the only time and the only way the government has of taxing these gains. "Unrealized gains." Don't you love tax language? Anyway even those estates over $11 million which are taxed are not taxed at the full 50% much of the time.

3. Another myth: The death tax really doesn't add that much to the government's income. It's just a nuisance for the rich folks who have to pay it.

Actually, truth: the number is in the billions. And as a Republican Senator (Everett Dirkson) once noted, a billion here, a billion there and pretty soon you're talking about real money.

4. Another myth: The estate/death tax unfairly punishes success:
Actually, it affects only those most able to pay as any "progressive" tax system does. The rich (most successful) are asked to pay more, from those to whom the most is given. Or, as some would say, those who have taken (seized) the most from the system are asked to pay back some of that.

5. Yet another myth: The small family farms are destroyed, liquidated as families scramble to pay a 50% tax.
 Actually, only a handful of small family-owned farms and businesses owe any estate tax at all, and virtually none have been liquidated to pay the tax.

So, there you have it. The song and dance, and the stubborn truth.
Aw, but the song and dance were so much more fun.

The very best thing about this new fantasy of making taxes painless and fair and only something someone else pays is that the announcement in front of a portrait of Teddy Roosevelt and the bison head and deer buck (the one with antlers)  head on the walls behind the President. 
I thought the stuff heads looked more magisterial and trustworthy than the two  human stiffs standing behind the President.

I liked the Bison head the most. The Bugaboo Steak House used to have a bison head like that on the wall, and periodically, it would turn toward the diners and ask how they liked their meals. 
I took five wrestlers to Bugaboo after a wrestling match and one of these kids was from deep in the inner city, Anacostia in Washington, DC and he was the only Black in the entire place and he was looking pretty uneasy and he had never been to a steakhouse before and when the bison turned to him and asked how he was liking his meal he jumped out of his chair. 
He gathered himself up and sat down and looked around the table at his four team mates who were mercifully understanding about this being a new experience and one of them said, "Feel like you're the Brother from Another Planet, don't you?"
"If that thing says another word to me," the kid said, "You can send my plate out to the car, 'cause that's where I'll be."
Everyone laughed and I guess you can say we all had a bonding moment.
Which is more than I can say about that press conference.

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