Yesterday, the House passed its Republican tax plan, while the Senate’s Finance Committee today cleared their version of a tax bill to be looked at by the full Senate. That doesn’t mean the GOP’s tax plan is a done deal, since the House and Senate bills are very different and will have to be reconciled. But this is the one piece of legislation that the GOP is hopeful it can pass during this session. Yet it’s also one with a clear winner and a clear loser. The clear winner? The very rich. The clear loser? Pretty much everybody else.
Here are the biggest goodies the very rich get, under the House plan:
- A big business tax cut: Currently, corporations are supposed to pay a 35% corporate tax. Both bills would reduce that rate to 20%. Keep in mind, currently the effective tax rate, that is, what companies actually pay once it all comes out in the wash, is about 18%. The GOP’s argument is that it will benefit small businesses, which is true. But it’ll also hike the deficit by $1.4 trillion.
- A repeal of the estate tax by 2024: In other words, the very rich can pass on all their money to their kids, like Donald Trump Jr. and Jared Kushner. In the meantime, the deduction will be doubled.
- “Pass-through” income gets a tax cut: To explain, the vast majority of business in the U.S. are built so that their income “passes through” a private individual’s hands, and thus is subject to personal tax law, not corporate tax law. In other words, the people who are already avoiding some taxes get to avoid these taxes even harder. Also … those who believed that the rich pay personal taxes may be surprised.
- A host of other tax loopholes, like for private jets and golf courses: Yes, the Senate wants to make it easier to own a private jet and a tax loophole for golf course owners is preserved. And the children of the rich will get a less espensive ride at private schools.