Nobel Prize Winning Economist Krugman - Tax-Cut Santa Is Coming to Town

[TomCADem]

Last edited Mon Dec 25, 2017, 03:34 PM - Edit history (1)

Bottom line is that the tax bill was designed to make the rich, including Donald Trump, much richer with a wealth of opportunities to avoid paying taxes. Of course, when Trump starts his wars, I am sure he will use them to cut benefits, because it is the patriotic thing to do to support our troops.

https://www.nytimes.com/2017/12/21/opinion/tax-cut-santa.html

The centerpiece of the legislation is a huge tax cut for corporations. Republicans claim that this tax cut will be passed on to workers in the form of higher wages, but most independent studies conclude that even in the long run only between one-fifth and one-quarter of the tax cut will trickle down to workers. And the fraction will be much lower in the short run — say, the next few years. So this is basically a tax cut for shareholders.

And who are these shareholders? About a third of the total benefits will go to foreigners. Among U.S. residents, while many people have some stock in their retirement accounts, those amounts are generally small. Even including indirect holdings through mutual funds, the top 1 percent of domestic households owns 40 percent of stocks, the bottom 80 percent just 7 percent. So when Tax-Cut Santa comes to town, it’s definitely good to be rich.

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You see, the second most important piece of this tax bill, after the corporate tax giveaway, is a drastic tax cut for business owners, who will end up paying much less in taxes than people with the same income who work as someone else’s employee.

It’s hard to come up with any good rationale for this move, which will discriminate among taxpayers in a way that bears no relationship to any coherent policy goal. It will, however, offer a big financial windfall to a number of elected officials, especially Donald Trump.

[marybourg]

1. Repeal and Replace. nt

[Zambero]

2. Whatever Bad Santa giveth he will in fact taketh away

Except of course for the corporate cuts which are permanent. The vast majority of us are trickled and/or tricked down upon.

[progree]

3. So the top quintile owns 93% of stocks, leaving 7% for the other 4 quintiles

Even including indirect holdings through mutual funds, the top 1 percent of domestic households owns 40 percent of stocks, the bottom 80 percent just 7 percent.

I bet the next quintile owns damn near all of that remaining 7%.