The Republican Tax Plan: D- Territory

Let's Make Things Worse

Ok, let's jot down a few reactions to the Republican Tax Plan:

* Cuts the corporate tax rate from 35% to 20%.  This is their top priority, but because U.S. corporations already have a record $1.84 trillion in cash to spend on investment, giving them more won't so much spur investment as mean higher dividends to shareholders.  And because foreigners own 35% of the U.S. stock market, about a third of this cut will go to foreigners.  F+

 * Caps the mortgage interest deduction at $500,000.  As Kevin Drum has shown, this change would hurt Blue states more than Red.  This will probably doom their entire plan, since homebuilders have an outsized voice in Washington.  If it weren't for the differences in housing markets, this would actually be a fairly welcome change, as it would affect those who probably don't need the break.  For sure it should apply to second homes.  B-

 * Eliminates the State and Local Tax Deduction.  Drum's link (above) shows this is another attack on Blue states, though if it had a fairly high cut off, those who could afford it would be the only ones affected.  C

 * Wipes out Student Loan Deduction.  While we're still on the above link, Drum shows a similar pattern for those taking out student loans--more college degrees in Blue states.  This seems petty, unproductive and would likely tick off many voters.  F

 * Increases the Child Tax Credit by $600.  Seems sensible, though Drum shows this helps Red states more than Blue.  With life spans likely to grow rapidly in the near future (at least for healthy people), one could argue that we have enough humans on the planet; or..., that more workers are needed to support all our retirees--or are robots supposed to step in?  C

 * Ends the Medical Expenditures Deduction.  Following Drum's above linked article, we see this actually hurts Red states most.  It was probably included to congratulate healthy people.  F

 * Removes Alimony Deduction.  This would be a huge hit for those divorced.  Drum thinks this might be a sop to the Religious Right.  C-

 * The end of deductions for Adoptions, Gambling Losses, Tax Preparation, and Moving Expenses.  These seem to be the equivalent of coins in the pocket, though I don't have any great objections, except for Adoptions.  C-

 * Upends the Electric Vehicle and Renewable Energy Incentives.  This is crazy, given climate change.  F

 * Changes to Business Taxes that directly benefit our current president.  Anyone voting for this plan should expect to be considered an enabler of unethical behavior, at the least.  F

 * Killing the Estate Tax.  This alone would likely save the eventual Trump estate hundreds of millions.  F

 * Socking the treasury with another $1.5 trillion in debt over ten years.  With low unemployment, we should be saving for a rainy day, not spending the next generation's money for them.  Tax cuts were famously tried by the Republicans 15 years ago, and resulted in no economic bounce.  Why would the same thing supercharge the economy this time?  It wouldn't.  F

So, to recap: B (1), C (4), F (7).  Put this thing out of its misery.