The richest netted billions of Trump tax cuts they helped write: report

A ProPublica research released Wednesday shows how Republican lawmakers and industry groups have maneuvered to deliver billions in tax cuts in 2017 GOP tax laws that benefited the country’s super-rich, including major political donors.

“The spate of midnight business and last-minute voice insertions has resulted in an enormous redistribution of wealth into the pockets of a select group of families, drawing billions in tax revenues from the state coffers,” write Justin Elliott and Robert Faturechi.

Formally known as The Tax Cuts and Jobs Act, the law was passed at “warp speed” and enacted by President Donald Trump in late 2017, lowering the corporate tax rate and the top rate for individuals. Critics of the law called it GOP tax fraud – a characterization reinforced by later analysis that showed how the tax law revisions brought massive economic gains to the rich and corporations.

Interventions cited in the new coverage include those of Senator Ron Johnson of Wisconsin, a climate science-denying member of the Republican Millionaires Caucus, who tried last year to prevent stimulus payments to economically devastated Americans.

Johnson pushed for a provision to sweeten “the tax break” for so-called pass-through companies, ProPublica reported, citing Treasury Department officials’ emails and calendars. In such companies, the income is “passed on” to the owners of the company and taxed according to individual income tax. They make up the majority of businesses in the United States

The GOP agreed to allow pass-through companies to deduct up to 17.4% of their profits, but Johnson, who threatened to vote no, increased the deduction to as much as 20% – an increase called “tens of millions “May mean additional deductions for an ultra-rich family in a year alone,” the report said.

“Johnson’s last-minute maneuver” to include the provision in the bill, ProPublica reported, “benefited two families more than almost anyone else in the country – both worth billions and both of the senator’s biggest donors.” The coverage points to right-wing billionaires Dick and Liz Uihlein, owners of major packaging company Uline, and another right-wing billionaire, roofing giant Diane Hendricks, who collectively “donated $ 20 million to groups supporting Johnson’s 2016 re-election campaign” .

“The expanded tax break that Johnson enforced earned them $ 215 million in deductions in 2018 alone, which drastically reduced the income they owed tax on,” the investigation found. “At this rate, the cut could bring the Hendricks and Uihleins more than half a billion in tax savings over their eight-year term.”

Other mega-rich households also benefited from this. From ProPublica:

In the first year after Trump signed the bill, only 82 ultra-rich households walked away along with more than $ 1 billion in total savings, an analysis of confidential tax records shows. Both Republican and Democratic magnates saw their tax bills cut by tens of millions, including: media magnate and former Democratic presidential candidate Michael Bloomberg; The Bechtel family, owners of the engineering office of the same name; and the heirs of the late Houston pipeline billionaire Dan Duncan.

The investigation looked at how engineering and construction giant Bechtel secured a sentence in the final version of the bill to ensure that engineering is not an industry that is excluded from the pass-through deduction. Ahead of the bill’s passage, ProPublica noted that the company “conducted a full press press in Washington, met with Trump administration officials and spent more than $ 1 million lobbying on tax issues.”

It was a good return on investment. “The Bechtel Corporation made a profit of around 2.3 billion US dollars in 2018 alone – the vast majority of which appears to be eligible for the 20% deduction.”

The Center on Budget and Policy Priorities previously noted how “lobbying outside recognized procedures and largely unsupervised has influenced the way in which the Treasury Department prepares the transit regulations before issuing them in proposed form” and discussed how the ” 20% of the deduction for transit companies is mainly aimed at the highest income applicants “and how the deduction, together with the reduction in the corporate tax rate,” contributes to all three major shortcomings of the measure: They worsen inequality by benefiting the wells disproportionately “. -off; they lose substantial revenues at a time when demographic and other pressures require federal revenues to grow; and they are likely to encourage significant tax avoidance by creating great incentives for wealthy individuals to re-characterize their income in search of lower taxes.

In the face of such an impact, Senate Finance Committee Chairman Senator Ron Wyden, D-Ore., Proposed legislation last month to reverse the pass-through provision that he cited as exemplary of “Republicans’ commitment to giveaways.” to give to the top 1% “called.

“Half of the pass-through deduction benefit goes to millionaires, and because the benefit is so upside down, many small business owners on Main Street are excluded. The mega-millionaires can write off 20% of their income while they’re in the middle. “-Class accountants are cut out,” the Oregon Democrat said.

Wyden described his proposal as an effort to “make politics for medium-sized entrepreneurs fairer and less complex, while at the same time raising billions for priorities such as childcare, education and health”.

Read the full investigation, which is part of ProPublica’s ongoing reporting project, “The Secret IRS Files”. here.