Tag Archives: individual

4 Ways Trump’s Tax Plan Will Make the Trumps Even Richer

Mother Jones

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President Donald Trump revealed an outline of his big tax reform plan on Wednesday. It’s light on specifics and even lighter on details about how the administration might pay for what it describes as the “biggest tax cut” in US history. But one thing is perfectly clear: Trump and his family could save billions of dollars. Here are four ways Trump’s tax proposals would help people named Trump.

1. Eliminating the Estate Tax

The estate tax, which applies to wealth that deceased people pass on to their heirs, only affects the richest of the richest—roughly 0.2 percent of Americans. Individuals worth at least $5.45 million (or married couples worth at least $10.9 million) will owe estate taxes after their deaths. Currently, assets in excess of this $5.45 million exemption are taxed at 40 percent. President Donald Trump claims to be worth $10 billion, so his heirs could save billions if the estate tax disappears.

2. Eliminating the Alternative Minimum Tax

The alternative minimum tax requires certain taxpayers to calculate how much tax they owe twice—once using the regular income tax rules and again under AMT rules. Originally, the AMT was structured to prevent wealthy people from abusing the system by avoiding paying their fair share of taxes. We don’t know much about Trump’s taxes, but his 2005 returns, which were obtained by MSNBC, indicate the he earned $153 million that year. Without the AMT, Trump apparently would have paid just $7 million in taxes, according to the New York Times—a tax rate less than 5 percent. But the AMT forced him to pony up an additional $31 million that year, raising his tax rate to about 25 percent. Asked at a Wednesday press briefing how eliminating the AMT would impact Trump’s tax liability, Secretary of the Treasury Steven Mnuchin dodged the question and abruptly ended the briefing.

3. Slashing Tax Rates for Pass-Through Corporations

Many businesses are structured as pass-through companies, meaning that rather than filing taxes as corporations, they “pay taxes through the personal income tax code,” as the Times explains. Trump wants to cut the rate for pass-throughs (as well as for corporations) to just 15 percent, which will certainly enrich anyone named Trump. Since the Trump Organization is a collection of pass-throughs, the organization itself isn’t subject to income tax. Instead, the owners are taxed individually. So Trump and his children would only have to pay 15 percent on their earnings from the family organization in taxes, much lower than the current top rate of 39.6 percent.

4. Lowering the Individual Income Tax Rate

Trump wants to eliminate several tax brackets and lower the top individual tax rate from 39.6 percent to 35 percent. Under the new plan, there will be three tax brackets: 10 percent, 25 percent, and 35 percent. That could be a huge giveaway to the Trumps and other wealthy Americans who make millions of dollars each year.

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4 Ways Trump’s Tax Plan Will Make the Trumps Even Richer

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Please Stop Getting the “Muslim Ban” Wrong

Mother Jones

Ruthann Robson says this today about President Trump’s immigration order:

Moreover, the EO itself does address religion. In its subsection on resuming refugee claims, which the EO suspends for 120 days, it instructs the government to “prioritize refugee claims made by individuals on the basis of religious-based persecution, provided that the religion of the individual is a minority religion in the individual’s country of nationality.” In the seven nations covered by the EO, the majority religion is Islam. Thus, unless the government considers different sects of Islam as minority religions, only non-Muslims would be eligible for a claim of religious-based persecution.

I’ve seen this formulation over and over, but it’s wrong. The “religious persecution” clause applies to refugees, who have been banned worldwide. This clause affects Muslims and non-Muslims about equally.

The travel ban applies to any visa holder, and is restricted to seven Muslim-majority countries. There’s a good case to be made that this ban is not truly based on nationality but is instead effectively aimed at Muslims, but the religious persecution clause doesn’t apply and has nothing to do with it.

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Please Stop Getting the “Muslim Ban” Wrong

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Obamacare Repeal Is Doomed

Mother Jones

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The current hotness in Republican circles is “repeal and delay.” That is, they want to pass legislation that repeals Obamacare in, say, 2019, but doesn’t replace it with anything. Then they can spend the next couple of years figuring out what should take its place. There’s only one problem with this:

Republicans. Can’t. Repeal. Obamacare.

Oh, they can repeal big parts of it. Anything related to the budget, like taxes and subsidies, can be repealed via the Senate procedure called reconciliation, which needs only 51 votes to pass. But all the other parts can be filibustered, and it takes 60 votes to overcome a filibuster. Republicans don’t have 60 votes in the Senate.1

This leaves quite a few elements of Obamacare that can’t be repealed via reconciliation, but I think Democrats should focus on one: pre-existing conditions. This is the provision of Obamacare that bans insurers from turning down customers or charging them extra for coverage, no matter what kind of pre-existing conditions they have. I tell the whole story here, but there are several reasons this is the best provision to focus on:

It’s an easy thing to understand.
It’s very popular.
Republicans say they favor keeping it.
Donald Trump says he favors keeping it.
It’s not a minor regulation. It is absolutely essential to any health care plan.
It’s fairly easy to explain why repealing Obamacare but leaving in place the pre-existing conditions ban2 would destroy the individual insurance market and leave tens of millions of people with no way to buy insurance.

The last point is the most important. Take me. I’m currently being kept alive by about $100,000 worth of prescriptions drugs each year. If I can go to any insurer and demand that they cover me for $10,000, that’s a certain loss of $90,000. If millions of people like me do this, insurance companies will lose billions. In the employer market, which covers people who work for large companies, this is workable because insurers have lots and lots of healthy, profitable people at each company to make up these losses. In the individual market—after you’ve repealed the individual mandate and the subsidies—they don’t. They will bear huge losses and they know it.

What this means is not just that Obamacare would collapse. It means the entire individual market would collapse. Every insurance company in America would simply stop selling individual policies. It would be political suicide to make this happen, and this means that Democrats have tremendous leverage if they’re willing to use it. It all depends on how well they play their hand.

The current Republican hope is that they can repeal parts of Obamacare, and then hold Democrats hostage: vote for our replacement plan or else the individual insurance market dies. There’s no reason Democrats should do anything but laugh at this. Republicans now control all three branches of government. They’ve been lying to their base about Obamacare repeal for years. Now the chickens have come home to roost, and they’re responsible for whatever happens next. If the Democratic Party is even marginally competent, they can make this stick.

Plenty of Republicans already know this. Some have only recently figured it out. Some are still probably living in denial. It doesn’t matter. Pre-existing conditions is the hammer Democrats can use to either save Obamacare or else demand that any replacement be equally generous. They just have to use it.

1Of course, Republicans do have the alternative of either (a) getting rid of the filibuster or (b) firing the Senate parliamentarian and hiring one who will let them do anything they want. If they do either of those things, then they can repeal all of Obamacare and replace it with anything they want. I don’t think they’ll do either one, but your mileage may vary on this question.

2Just for the record, it’s worth noting that Republicans can’t modify the pre-existing conditions ban either. Democrats can filibuster that too.

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Obamacare Repeal Is Doomed

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