THE MORNING PLUM:
There is probably no better illustration of the scam President Trump’s tax plan would perpetrate on working- and middle-class people than its provision repealing the estate tax. Getting rid of it would benefit a tiny slice of high earners and their families — including Trump’s family, who could save as much as $1 billion once Trump moves on to delivering an accounting for his life to his maker.
Yet Trump has absurdly sold estate-tax repeal as a huge boon to “millions” of small businesses and even to “the American farmer.”
Trump will now introduce a new trope to his pitch for estate-tax repeal: He will claim it helps truckers.
The president is set to deliver a speech touting his tax plan Wednesday afternoon in Pennsylvania that will be attended by hundreds of truckers, whom Trump will describe as “hard-working men and women” who are “the lifeblood of the economy.” The Post reports that Trump will tout his plan as a benefit to truckers by arguing that lower taxes on manufacturers will boost growth and demand for trucking.
But that’s not all: One administration official says Trump will sell estate-tax repeal as beneficial to family-owned trucking companies that pass on assets from one generation to the next.
I spoke this morning to David Cay Johnston, a veteran tax reporter who has written numerous books on how the wealthy game the tax system to their advantage. When I ran this claim about the estate tax by Johnston, he burst out laughing and dismissed the assertion as “absurd” and a “scam.”
As it is, Trump has already dissembled madly about estate-tax repeal. His recent claim that “millions” of small businesses and farms would be helped was neatly debunked by the Post fact-checking team. As the Tax Policy Center points out, estates with a gross value of under $5.49 million are exempt from the estate tax; more than two-thirds of taxable estates come from the top 10 percent of earners and nearly one-fourth come from the top 1 percent. This means that in 2017, only 80 taxable estates would have qualified as farms and small businesses.
Johnston ran the math for me on trucking companies. His conclusion: The number of trucking businesses that would be helped by estate tax repeal is likely to be around 30 or lower, and that’s being “very generous,” he said.
Johnston, who also runs DCReport.org, reached this conclusion by using 2016 Internal Revenue Service data, which he says shows that there was a total of 1,263 closely held businesses “of all kinds” on which the estate tax was paid during that year. By applying the percentage of GDP represented by revenue to the trucking industry to the 1,263 businesses, Johnston says, you get 30 trucking businesses.
Now, this is an admittedly imperfect calculation, and it’s very possible that the administration will challenge this finding. But this is exactly the point: The administration should be pressed on how many trucking businesses would be affected by estate-tax repeal and how it reached that conclusion. As Yahoo News reports today, the administration does not appear to have an answer to that question.
This use of trucking families as a symbol of the alleged unfairness of the estate tax appears to be something new. For many, many years, Republicans pushing estate tax repeal have cited the American family farm as a symbol of that unfairness. Going back to at least the George W. Bush administration, the argument has been that repeal is necessary to save the family farm and allow it to be transferred to future generations. But as Johnston has written, the notion of the family farm broken up by the estate tax was largely a myth.
Now the family owned trucking business looks like it is on its way to becoming the new family farm. It’s unclear whether Trump will merely argue that estate-tax repeal is good for truckers in some general sense, or whether he will argue more specifically that repeal is necessary to prevent IRS bureaucrats from breaking up the hallowed family-owned trucking business and preventing it from getting passed down to the next generation of hard-working American truckers. But if he does attempt the latter, the administration should be called on this, too.
“Show us the actual cases,” Johnston said. “This is just another phony claim to protect billionaires from paying taxes on the gains over their lifetime. This is a political scam. Show us the trucking companies that went out of business.”
* BANNON’S PLAN TO DESTROY GOP PROCEEDS APACE: McClatchy reports that a surprising number of would-be primary challengers to GOP incumbents are courting the support of Stephen K. Bannon, who hopes to depose GOP leaders:
Bannon and his allies have been in touch with current and potential candidates or their representatives involved in most of the marquee Senate primary races next year … And in a sign of just how far-reaching Bannon’s influence is perceived to be among conservative candidates, multiple House — and even statehouse — hopefuls are also seeking to wrangle Bannon’s support, looking for introductions and tracking him down at events.
As we keep repeating, these challenges will demonstrate whether there really is any such thing as this “populist economic nationalism” that Bannon keeps touting.
* BANNON COULD SPARK CIVIL WAR IN GOP: Mike Allen and Jonathan Swan comment:
Bannon can sound delusional about his power to disrupt the party. But make no mistake: the combo of his fame with the base + access to Mercer money + true belief in America first policies = big trouble for establishment Republicans in 2018 and beyond. If Bannon were to field the slate he envisions, the Republican Party would have a civil war on its hands that makes 2010 look like a tea party.
It’s worth recalling that the entire premise of this Bannon challenge — that the GOP establishment secretly opposes the Trump agenda — is just a big lie.
* TRUMP WANTED TENFOLD INCREASE IN NUKES: NBC News scoops that at a July meeting of top national security officials, Trump said he wanted a nearly tenfold increase in the U.S. nuclear arsenal. This is notable:
Officials briefly explained the legal and practical impediments to a nuclear buildup and how the current military posture is stronger than it was at the height of the build-up. In interviews, they told NBC News that no such expansion is planned.
Remember how Sen. Bob Corker (R-Tenn.) said Trump’s inner circle are the only things preventing “chaos” and constraining him from putting us on “the path to World War III”?
* TRUMP WILL CLAIM TAX PLAN MEANS BIG ‘PAY RAISE’: In his speech today, Trump will claim a provision of his tax plan that gives companies a one-time tax holiday for repatriated funds will mean a $4,000 raise for a typical family. The Post comments:
Neither that [administration] official nor other White House aides would provide any detail Tuesday on the math behind the $4,000 figure … A similar repatriation effort in 2004 provided little in the way of hiring, and some of the companies that benefited from the tax break actually cut payrolls.
One administration aide says a white paper backing up this claim is coming soon, which probably means “never.”
* ONE OF TRUMP’S TAX IDEAS ALREADY FAILED IN KANSAS: The Trump/GOP tax plan would also set a lower 25 percent tax rate for “pass-through entities.” But Jim Tankersley reports that a version of this was tried in Kansas, along with a cut in the top rate, and failed:
The tax package reduced state revenue by nearly $700 million a year, a drop of about 8 percent, from 2013 through 2016, according to the Kansas Legislative Research Department, forcing officials to shorten school calendars, delay highway repairs and reduce aid to the poor. Research suggests the package did not stimulate the economy, certainly not enough to pay for the tax cut. This year, legislators passed a bill to largely rescind the law, saying it had not worked as intended.
But as Tankersley notes, the Kansas plan did allow high earners to pay lower taxes by reclassifying how they were paid. So who says it failed?
* OUR REALITY-TV PRESIDENT: Peter Baker points out that Trump has had a reality-TV week, belittling Bob Corker’s height, challenging Rex Tillerson to an IQ test and so forth. Note this, from one expert in the genre:
“Reality TV is known for its humiliation tactics and its aggressive showmanship and also the idea that either you’re in or you’re out, with momentum building to the final decision on who stays and who goes.”
Behold the United States of America in the 21st century.
* AND AN OLD FRIEND OF TRUMP TELLS HIM TO SHUT UP ALREADY: Thomas J. Barrack, a billionaire who is one of Trump’s oldest friends, unloads on Trump’s buffoonish and hateful antics in an interview with Michael Kranish:
“He thinks he has to be loyal to his base,” Barrack said. “I keep on saying, ‘But who is your base? You don’t have a natural base. Your base now is the world and America, so you have all these constituencies; show them who you really are.’ In my opinion, he’s better than this. … I tell him all the time: I don’t like the rhetoric.”
In my opinion, he is not better than this. It is who Trump is, to his core.