In a way, I'm not sure this is news, in that Republicans shilling for big corporations and the very wealthy is not new but old (and throw in the clutch of Democrats who are willing shills for that scam). But, there it is: the Dave Camp shell game that, at the end of the day, will be a $1.7 trillion tax give away to the very wealthy and corporations.
So, just as most people are scurrying about to try to meet the April 15th tax deadline, the good people at Citizens for Tax Justice dig into Camp's tax overhaul, which would cut the top personal income tax rate to 35 percent and dramatically reduce the corporate tax rate from 35 percent to 25 percent. Allegedly, it's supposed to be "revenue neutral", the buzz word of the day (adopted by many Democrats as well).
Before going to CTJ's analysis, let me remind everyone that there is absolutely no reason--none, zero--to cut corporate taxes, which are soaring:
Corporate profits are at their highest level in at least 85 years. Employee compensation is at the lowest level in 65 years.No matter. Facts aren't required when your sole purpose is to siphon money to your buddies at the country club who write big checks for campaign contributions. Bob McIntyre explains:
The Commerce Department last week estimated that corporations earned $2.1 trillion during 2013, and paid $419 billion in corporate taxes. The after-tax profit of $1.7 trillion amounted to 10 percent of gross domestic product during the year, the first full year it has been that high. In 2012, it was 9.7 percent, itself a record.
Until 2010, the highest level of after-tax profits ever recorded was 9.1 percent, in 1929, the first year that the government began calculating the number.
Before taxes, corporate profits accounted for 12.5 percent of the total economy, tying the previous record that was set in 1942, when World War II pushed up profits for many companies. But in 1942, most of those profits were taxed away. The effective corporate tax rate was nearly 55 percent, in sharp contrast to last year’s figure of under 20 percent.[emphasis added]
As for distributional neutrality, Camp’s personal income tax cuts would be regressive. The Institute on Taxation and Economic Policy ran those tax cuts, fully phased in, through its microsimulation tax model (similar to the JCT’s) and found that, on average, the plan would cut personal income taxes for all income groups except the poorest 20 percent. People in that lowest fifth, however, would pay an average of $185 more a year. Within income groups, the biggest losers under Camp’s personal income tax plan would be single parent families. Two-thirds of those families would face tax increases, averaging $1,100 a year each.The biggest scam, though, is how Camp hides the full effects of his tax cuts and revenues by spreading them over two decades:
The biggest winners are who you’d expect. The top 1 percent would save an average of $18,000 a year in income taxes. The super-super-rich, with incomes of more than $10 million, would save an average of $201,000 a year.[emphasis added]
The truth is that after its first decade, Camp’s tax plan changes dramatically. That’s because Camp front-loads his business revenue raisers and back- loads his business tax cuts. As a result, while his personal income tax cuts will continue to grow in the second decade, his business tax increases will disappear, and in fact will probably turn into tax cuts. As a result, I calculate that his plan turns into a regressive $1.7 trillion net tax cut over its second decade.So, effectively, this is a locked in robbery of the wealth of the country, just one that you don't see as quickly as say George Bush's tax cuts. But, the effect is the same: take from those who create the wealth through hard work and hand it over to the leeches.
Camp is zealous in trying to hide the permanent effects of his tax plan. For example, he slowly phases in his reduction in the corporate tax rate down to 25 percent, which won’t take full effect until 2019.