Davis Statement on the Republican Tax Cut Plan
September 28, 2017
We have finally gotten our first glimpse of the much vaunted and hyped Republican tax cut plan. It’s worse than we expected. This is an audacious tax giveaway to the ultra rich. The tax cut program is based on hype, smoke and mirrors, phony economic models and sheer falsehoods. This is a plan for increasing economic inequality and for strangling the needs of working people. This a a plan for economic disaster for our nation.
The Republican plan calls for eliminating the Alternative Minimum Tax (AMT) designed to prevent the wealthiest tax payers from using their ever evolving schemes of tax loopholes to dodge paying taxes. Without the AMT President Trump would have owed an additional $31 million for his 2005 taxes, the only year we have access to his tax returns.
According to Citizens for Tax Justice (CTJ) corporate tax loopholes have allowed 18 profitable corporations to altogether avoid tax over multiple years. In fact, not only have these corporations not paid tax form 2008 to 2015, some of them received federal tax refunds. The claims that U.S. corporations pay more in taxes than foreign competitors has been debunked. Data from the OECD show that U.S. corporate taxes as a percentage of GDP are 2.2 percent, which is substantially less than the 2.9 percent weighted average among the 34 other OECD countries for which data were available. The Republican tax cuts would slash corporate tax bills, mostly benefitting the tiny fraction of the wealthiest Americans.
The elimination of the estate tax would give a provide a $269 billion tax break to the top 0.2 percent of Americans. According to the nonpartisan Tax Policy Center, only about 5,500 estates in 2017 - out of nearly 3 million estates - would have to pay any taxes. About half of estates subject to the tax would pay an average tax of about 9 percent. That's because for a married couple, about $11 million is exempt from taxation. And a fact check by the Washington Post found that “Only 80 - that's right, 80 - taxable estates would be farms and small businesses.”
For the 20% lowest income Americans it will do nothing and for many middle income Americans there is little hope for tax relief. President Donald Trump's top economic adviser, Gary Cohn, said today that he can't guarantee that taxes won't go up for some middle-class families under the administration's sweeping tax overhaul.
Meanwhile the deficit will soar and will spur demands by deficit hawks to cut social security, medicare, medicaid, education, and other vital programs. I oppose this Republican tax cut plan, I will do all in my power to defeat it, and I will never vote for it.