The short answer is that when Mitch McConnell and the Senate Republican Misleadership put back the Alternative Minimum Tax for Corporations (which they had to do to pay for other bribes to their caucus) they didn’t lower the rate and it remains at 20%, exactly the same as the base rate!
What this means for the Multinational Megacorporation Monopolies is they can’t use any of their carefully crafted loopholes and carve outs to reduce their taxes!
Needless to say the very same donors demanding they do this vastly unpopular bill at all are unpleased with their feckless stupidity.
Before I give you some more information about that colossal cock up, here’s some late night musings on the broader subject.
The Laffer Curve from Samantha Bee
America’s Neediest Millionaires from Trevor Noah
Flynn and Taxes from Seth Myers
It’s a little unfocused, the Tax stuff is at the end.
Just Taxes from Stephen Colbert
Here’s how Lewis Black describes “Trickle Down Economics”- “Take a cup. Tape it to your ankle. Now drink 20 beers and piss your pants and tell me how long it takes the cup to fill.”
Reinforcing my main point, which is that there will be at least 2 more votes on the Cut Cut Cut Bill, one in the House, one in the Senate, this piece by Eric Levitz-
The Senate GOP Accidentally Killed Some of Its Donors’ Favorite Tax Breaks
By Eric Levitz, New York Magazine
December 4, 2017
This screwup — like most of the tax plan’s oddest features — was born of a math problem. Due to arcane Senate rules, the Trump tax cuts can only add $1.5 trillion to the deficit over the next decade. Last Thursday, the Senate tax bill already cost about that sum, and then McConnell started making expensive promises to his few holdouts. Susan Collins wanted a $10,000 property tax deduction for Americans in high-tax states; Ron Johnson wanted a 23 percent business-income deduction for the company that his family owns. This left the Senate Majority Leader searching under the tax code’s couch cushions for new sources of revenue.
Eventually, he came upon the corporate alternative minimum tax (AMT). At present, most corporations face a 35 percent (statutory) rate on their income. But by availing themselves of various tax credits and deductions, most companies can get their actual rates down far below that figure. To put a limit on just how far, the corporate AMT prevents companies from paying any less than 20 percent on their profits (or, more precisely, on the profits that they fail to hide overseas).
The GOP had originally intended to abolish the AMT. But on Friday, with the clock running out — and money running short — Senate Republicans put the AMT back into their bill. Unfortunately for McConnell, they forgot to lower the AMT after doing so.
This is a big problem. The Senate bill brings the normal corporate rate down to 20 percent — while leaving the alternative minimum rate at … 20 percent. The legislation would still allow corporations to claim a wide variety of tax credits and deductions — it just renders all them completely worthless. Companies can either take no deductions, and pay a 20 percent rate — or take lots of deductions … and pay a 20 percent rate.
With this blunder, Senate Republicans have achieved the unthinkable: They’ve written a giant corporate tax cut that many of their corporate donors do not like.
McConnell’s mistake has two big implications. First and foremost, it means the Senate will almost certainly have to vote on a tax bill again before one goes into law. Previously, it looked as though Paul Ryan had enough votes in the House to pass the Senate bill as is. This took pressure off the party’s conference committee (the House and Senate leaders tasked with reconciling each chamber’s bills). Worst-case scenario, the House could just rubber-stamp the Senate’s work. Now, that option is deeply undesirable. It remains overwhelmingly likely that Republicans will pass a giant tax cut. But their task is now a bit more difficult.
The second implication is that McConnell is going to need new revenue. In all probability, Republicans are going to drop the alternative-minimum tax rate well below 20 percent. That will put the bill’s price tag over $1.5 trillion.
As it turns out, House Republicans are already making passage difficult. They threatened (but did not follow through on) to vote against appointing members to the Conference Committee.
Then there is this-
House Republicans Already Shooting Down Tax Bill’s Promises
by Andrew Desiderio, Daily Beast
House conservatives are already indicating that they’re prepared to block some of the key legislative promises that Senate Republicans demanded in exchange for their votes on tax reform legislation.
Those promises materialized in the frantic final hours of the tax debate last week, as Senate Majority Leader Mitch McConnell (R-KY) gave Sens. Susan Collins (R-ME) and Jeff Flake (R-AZ) assurances that some of their personal legislative priorities would be dealt with in exchange for their votes.
Collins said she received a promise that the Senate would consider two bipartisan pieces of legislation that would ostensibly mitigate the negative effects that could come from the tax bill’s repeal of Obamacare’s individual mandate. Flake said he received a “firm commitment from Senate Leadership and the administration” to work on a permanent protections for the soon-to-be-ended Obama-era program that shields children of undocumented immigrants.
Both senators ended up voting for the tax bill, giving it the 51 “yes” votes it needed to pass. Within days, however, reality began setting in that those promises might have been flimsy at best.
Moving the Collins and Flake deals through the House was always going to be an uphill climb, with a conservative bloc sharply opposed to both measures, having dubbed DACA a de facto form of amnesty and arguing that the health insurance market stabilization bills that Collins supports are tantamount to a bailout for health insurers and what they view as a broken system. On Monday, those conservatives railed against McConnell for making promises on legislation that they have long opposed.
“We still have the same issues. Nothing has changed in the last two months just because we’re fulfilling our promise on delivering on tax reform,” Rep. Mark Walker (R-N.C.), the chairman of the conservative Republican Study Committee, told The Daily Beast. “I find it problematic to be promising something that the House has shunned from very early on.”
Andrew Desiderio missed the fact that there will have to be another vote by suggesting it was a viable alternative to just pass the Senate Bill (see above) and while he lists several issues he doesn’t include what may be the biggest one of all.
The Senate Bill doesn’t include deductions for State and Local Taxes. For House members voting Yes on a Bill like that would be political suicide and not all Republicans hail from a Dead Red State but they all stand for election in 2018.
And Paul Krugman (who I don’t always agree with) reminds us what the real goal is-
Republicans Are Coming for Your Benefits
by Paul Krugman, The New York Times
DEC. 4, 2017
Republicans don’t care about budget deficits, and never did. They only pretend to care about deficits when one of two things is true: a Democrat is in the White House, and deficit rhetoric can be used to block his agenda, or they see an opportunity to slash social programs that help needy Americans, and can invoke deficits as an excuse. All of this has been obvious for years to anyone paying attention.
So it’s not at all surprising that they were willing to enact a huge tax cut for corporations and the wealthy even though all independent estimates said this would add more than $1 trillion to the national debt. And it was also predictable that they would return to deficit posturing as soon as the deed was done, citing the red ink they themselves produced as a reason to cut social spending.
Yet even the most cynical among us are startled both by how quickly the bait-and-switch is proceeding and by the contempt Republicans are showing for the public’s intelligence.
In fact, the switch began even before the marks swallowed the bait.
During the Senate debate over the Tax Cuts and Jobs Act, Senator Orrin Hatch was challenged over support for the Children’s Health Insurance Program, which covers nine million U.S. children — but whose funding lapsed two months ago, and has not been renewed. Hatch declared his support for the program, but insisted that “the reason CHIP’s having trouble is because we don’t have money anymore” — just before voting for a trillion-and-a-half-dollar tax cut that will deliver the bulk of its benefits to the richest few percent of the population.
He then went on to say, “I have a rough time wanting to spend billions and billions and trillions of dollars to help people who won’t help themselves, won’t lift a finger and expect the federal government to do everything.”
Now, to be fair, there are some people in America who get lots of money they didn’t lift a finger to earn — namely, inheritors of large estates. Strange to say, however, Republican legislation would give these people much more — indeed, billions and billions of dollars — without requiring any additional effort on their part.
The House version of the big tax cut would eliminate the estate tax entirely; the Senate version would double the level of wealth exempted from the tax, to $22.4 million for a couple. How can this be justified if it’s supposedly hard to find money for children’s health care?
Well, Senator Chuck Grassley explained it all last week: “I think not having the estate tax recognizes the people that are investing, as opposed to those that are just spending every darn penny they have, whether it’s on booze or women or movies.”
Hmm. Somehow, I don’t think limiting spending on booze, women, and movies (movies?) is going to be sufficient for the median American household — which had an income of $59,000 last year — to end up with a $22 million estate. And if you think of people who really will benefit from eliminating taxes on inheritance — people like, say, Donald Trump Jr. — one is not immediately struck by the notion that this is a reward for their fathers’ abstemious lifestyles.
The important thing to realize, however, is that the hypocrisy and contempt for the public we’ve seen in the past few days is just the beginning.
It has been widely noted that the tax bills enacted by the House and Senate are remarkably unfriendly to the middle class — in fact, the Senate bill, once fully phased in, would actually raise taxes on a majority of middle-class families. But that observation captures only a small part of what is about to happen to ordinary, hard-working Americans.
For budget deficits are going to soar thanks to Republican legislation — probably by even more than the official scorekeepers say, because the legislation creates so many new loopholes. And offsetting those deficits will require going after the true big-ticket programs, namely Medicare and Social Security.
Oh, they’ll find euphemisms to describe what they’re doing, talking solemnly about the need for “entitlement reform” as an act of fiscal responsibility — while their huge budget-busting tax cut for the rich gets shoved down the memory hole. But whatever words they use to cloak the reality of the situation, Republicans have given their donors what they wanted — and now they’re coming for your benefits.