The Treasury Department is reportedly “gutting” the Tax Cuts and Jobs Act (TCJA) of 2017 in a manner that will “disproportionately benefit” the One Percent.
Existing loopholes in the law, a lobbying blitz by big corporations and banks, and Treasury carveouts have resulted in a situation where “many leading American and foreign companies will owe little or nothing in new taxes on offshore profits,” and hundreds of billions of dollars in tax revenue will not be collected, the New York Times reported on Monday:
Through a series of obscure regulations, the Treasury carved out exceptions to the law that mean many leading American and foreign companies will owe little or nothing in new taxes on offshore profits, according to a review of the Treasury’s rules, government lobbying records, and interviews with federal policymakers and tax experts. Companies were effectively let off the hook for tens if not hundreds of billions of taxes that they would have been required to pay.
University of Houston tax law Prof. Bret Wells told the Times that Secretary Steven Mnuchin’s Treasury Department is “gutting” the law and that it is “the wealthiest people in the world” who will largely benefit.
Companies are projected to continue sending billions overseas in order to avoid taxation, deepening the deficit. The TCJA, regarded by many as the 45th president’s biggest and most consequential legislative win so far, has otherwise had serious consequences for Trump’s predecessor’s signature law.
A federal appellate court ruled in December that Obamacare’s individual mandate is unconstitutional because “it can no longer be read as a tax, and there is no other constitutional provision that justifies this exercise of congressional power.” The TCJA got rid of the penalty associated with not having healthcare.
On April 15, 2019, Secretary Mnuchin declared victory: “The Tax Cuts and Jobs Act Is Working.”
“Americans just finished filing their taxes for 2018. And this is the first year that the benefits of the Tax Cuts and Jobs Act (TCJA) have been improving the lives of our citizens. In fact, we are pleased to report that we have experienced a year of more jobs, bigger paychecks, increased business investment and lower tax liability,” Mnuchin wrote. “Lower tax rates, higher standard deductions and larger child tax credits have benefited most Americans.”
The White House, 10 days ago, credited the TCJA for continuing to boost the economy, two years after the president signed the bill into law.
“TCJA’s pro-growth reforms of individual and corporate taxes were the largest tax cut in United States history,” the Council of Economic Advisers said in a press release. “Additionally, since TCJA’s passage, United States multinational enterprises have repatriated $1 trillion in past overseas earnings that were previously invested abroad.”
“While the full benefits of TCJA are yet to be realized, economic data show that the law has already improved the United States economy and Americans’ standard of living,” the Council concluded.
[Image via Alex Wong/Getty Images]
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