In the last instance, Individual-1 is about making money, whether self-dealing or more tax giveaways to the wealthy. Nothing else matters.
Also like George W. Bush, Trump has governed like a bog-standard conservative, with only tax cuts and deregulation to show for his first few years. Only one major piece of legislation is likely to get Trump’s signature in his entire first term: the 2017 Tax Cuts and Jobs Act.
The effects of those cuts were predictable. According to a report by the Institute on Taxation and Economic Policy, two-thirds of those cuts have gone to the top 20 percent of earners. The richest 1 percent are currently reaping more benefits than the bottom 60 percent of Americans. By 2025, those tax cuts will balloon to $10.6 trillion, with some $2 trillion flowing to the wealthiest 1 percent of Americans. The San Francisco Fed and others have published studies showing that there’s no indication that any of this will grow the economy at all.
Massive tax giveaways to the rich are a time-honored Republican tradition. Combined, the Bush and Trump administrations have teamed up to produce two decades of massive tax breaks for the rich. From 2001 through 2018, changes to the federal tax code have reduced revenue by $5.1 trillion. Sixty-five percent of the savings has gone to the richest fifth of Americans, with 22 percent of it going exclusively to the top 1 percent.
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An investigation in The New York Times last week provided the first sweeping review of the provision, which was (rather incredibly) conceived of by Sean Parker, founder of Napster and early investor in Facebook. Perhaps predictably, billions in untaxed investment profits have been diverted into everything from luxury hotels to college towns to storage facilities, many of which have been dubiously classified as low-income areas and have created exceedingly few jobs.
The provision allows investors to defer capital gains taxes on that original money for up to seven years. So large untaxed sums are free to generate further large, totally tax-free winnings before any comparatively scant tax bill ever comes due. And after ten years, the investor can sell their stake in the investment without owing any taxes on the profits. According to one estimate, that compound incentive structure could increase an investor’s return by a startling 70 percent.
Paul Krugman has since called opportunity zones a “fiasco.” But the program’s impact—effectively allowing investors to circumvent capital gains tax by laundering that money through luxury high-rises—fits comfortably with the GOP’s new signature campaign to erode the capital gains tax.
prospect.org/...
This stunt is sure to bring victory