Okay, so the Republican high command has met in yet another series of secret meetings outside of what American hero John McCain calls “regular order” in the legislative process. They’ve cooked up a tax reform plan that many analysts, upon reflection, are calling a boon for the very rich. Is anyone really surprised? Not only that, is anyone really surprised that the secret Republican tax reform bill would eliminate the hated Alternative Minimum Tax or “AMT?” Unlike the failed attempt to “repeal and replace” thus robbing about 24 million Americans of their basic health care, the new so-called tax reform is what the late Milton Berle would have called for, namely “A chicken in every pot.” Though they insist that people will keep more of their tax money under the plan, it really isn’t so, especially in New York. Upon announcing the plan, the White House and the Republicans immediately employed their tried and true Propaganda 101 techniques by repeating their false assertions over and over again. Already analysts are pointing out that Donald Trump will personally make out like a bandit under this bill but we’ll never really know because we haven’t seen his tax returns.
Quite correctly, many people are pointing out that the really big hit here is on the deduction of state and local taxes from an individual’s income tax. Here’s how it works: up to now, you could lower your tax liability by deducting your state and local taxes from your income. In some states with high state income taxes, that offers huge relief to the already beleaguered taxpayer and has always been central to tax relief. Here’s what is particularly Trumpian and Republican about the proposed legislation — it hits the Blue (Democratic) States like New York, Massachusetts and California the hardest. Of course, this is one more example of Donald Trump sticking it to his enemies who may have voted for Hillary Clinton in the presidential election. In other words, he is getting even with those states that didn’t support him. In New York, Governor Andrew Cuomo has stated that the dedication of these taxes is critical to the well-being of the state and that their elimination could bankrupt the state. He states outright that the Trump plan would cost New York taxpayers $17.5 billion dollars. As a result of the change, he says, New York taxpayers, on average, will have to pay $5,300 more in federal taxes. That’s incredible.
We all know that one of the reasons why Trump and his right wing colleagues called for repealing and replacing Obamacare was that they needed the money to pay for this so-called tax reform that would benefit the higher income people at the expense of the little people. Those are the same little people that Trump preached to in order to win his improbable election. Now he’s figuring out another way to do it.
Even people like Republican Congressman John Faso from New York’s 19th Congressional District seem to have learned a little lesson from the ill-fated repeal and replace act. In contrast to his unpopular position on Obamacare, Faso now says he can’t support the president on the elimination of state and local tax deductions. Covering his bets, Faso says that he wouldn’t be “inclined” to vote for a tax bill that scrapped state and local deductions. Perhaps bowing to the inevitable hue and cry, Faso says that New Yorkers should not have to pay taxes twice, once to the state and localities and then to the federal government.
So will Trump and his people back off and change their mind on SALT (state and local tax deductions)? If they think the bill will fail, they might and damn the consequences of not having enough money to pay for things. Trump needs a victory and will not be all that responsible in paying for it. This is make or break stuff for Trump. Let’s just see how far he gets with it.