The Vague Tax Plan
By Adam Davidson
12:40 P.M.
... Under President Trump’s byline, an op-ed in USA Today laid out the tax goal in triumphal, vague language: "We want you to spend your valuable time pursuing your dreams, not trapped in a tax compliance nightmare." There are a few more details in the Treasury Department’s "Unified Framework for Fixing Our Broken Tax Code." The nonpartisan Tax Policy Center found that the plan would cut federal revenue by trillions of dollars, and that “those with the very highest incomes would receive the biggest tax cuts.” A change to the tax code would begin in the House Ways and Means Committee, whose chairman, Kevin Brady, promises passage by early December. Passage will likely be far more challenging in the Senate, where a two-vote majority means that a bill cannot alienate moderates or hard-line conservatives, and that every wavering Republican can bargain for huge benefits for favored constituents and supporters ...
The Trump Administration’s Unified Framework has .. only eight pages ... filled with short-term giveaways, special time-limited gifts for corporations. It will allow large companies that have kept billions in savings overseas to repatriate that money to the U.S. with a special tax holiday. Most economists disdain this sort of short-term solution because it incentivizes the richest companies to do precisely the opposite of what average citizens would want ...
... The Unified Framework would create a special tax status for an oddly specific sort of company: a foreign firm in which an American company has a ten-per-cent or greater ownership share. Investors in such companies can fully write off their dividends. If this is confusing, that’s precisely the point. It’s the sort of complex tax engineering that will pay off for a small minority while most of the population remains oblivious. It will likely encourage Americans rich enough to conduct tax optimization to put far more of their investments in overseas companies with minority American ownership, which will allow them to receive their dividends tax-free, saving the wealthiest millions ...
During past tax-reform efforts, the final result has almost always favored politics over economic optimality, ignored logic, and favored the powerful. But in past American efforts .. there was at least an effort, especially in the early days, to assess and address what the best minds know ... There is none of that today ...
https://www.newyorker.com/news/news-desk/the-ignorance-of-trumps-vague-tax-plan
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