Fifty-three percent of Americans say the tax overhaul Republicans pushed through in December will have a negative impact on the U.S. — deficits and unbalanced benefits for the wealthy and large corporations — versus 39 percent who say it will have the positive effects of a stronger economy, more jobs, and more pocket change, according to a new NBC News/Wall Street Journal poll. Overall, 27 percent called the tax bill a good idea, down from 30 percent in January, while 36 percent called it a bad idea.
For a Republican Party that has said it hopes to ride the tax cuts to victory in November, this is "not a great starting point," said Democratic pollster Fred Yang, who conducted the survey with GOP pollster Bill McInturff. The tax overhaul was popular among a majority of men, unpopular with a larger majority of women, and opposed by rural Americans, older men, the working class, middle class, and upper class; women with college degrees dislike is by a nearly 3-to-1 margin. The poll, of 900 Americas, was conducted by telephone April 8-11, and it carries a margin of error of ±3.27 percentage points.
A new SurveyMonkey poll for The New York Times was more positive — 48 percent approve and 47 percent disapprove. But "that is down from a 51 percent approval rating in February, and it suggests that the law may have hit a high-water mark among voters — if they're even thinking about it anymore," the Times says. President "Trump has lost some interest in the $1.5 trillion tax overhaul that he signed into law last year — even though the White House keeps scheduling events to promote it," and "the country is right there with him." There's "a brief flurry of activity" planned around tax day, the Times notes, but "by all sorts of metrics" — cable news coverage, Google searches, Trump comments — "Americans aren't talking very much about a law that Republicans had hoped to make a centerpiece of their midterm election message." Peter Weber
In your periodic reminder that the U.S. has a for-profit health-care system, health insurers and other health-care companies will save tens of billions from the Republican tax overhaul but "patients should not expect the health industry's windfall to lead to lower premiums, reduced prices, or major industry changes," Bob Herman and Caitlin Owens report at Axios. They discovered this by listening to the health-care companies, perusing their fourth-quarter financial reports and conference calls with investors.
The 21 publicly traded companies Axios looked at "collectively expect to gain $10 billion in tax savings in 2018 alone," Herman and Owens write. "Most of the money is going toward share buybacks, dividends, acquisitions, and paying down debt — with just a sliver for one-time employee bonuses, research, and internal investments." Few pharmaceutical companies were included in the Axios data, but drugmakers are already spending at least $50 billion on new stock buybacks, and they and medical device companies are also repatriating tens of billions from offshore accounts, bolstering their bottom lines.
It isn't just health care — U.S. companies have announced more than $218 billion in share buybacks since the GOP passed the law in December, investment research firm TrimTabs said last week. The $153.7 billion in buybacks in February alone broke the previous record of $133 billion in April 2015, and "if the pace keeps up, this year's volume will smash totals from all other previous years going back more than a decade," TrimTabs analyst Winston Chua said in the report.
"Those so-called buybacks are good for shareholders, including the senior executives who tend to be big owners of their companies' stock," Matt Phillips explains at The New York Times. "A company purchasing its own shares is a time-tested way to bolster its stock price. But the purchases can come at the expense of investments in things like hiring, research and development, and building new plants — the sort of investments that directly help the overall economy." Peter Weber
Secretary highlighted by Paul Ryan for her $1.50 pay bump suggests Ryan didn't 'read the whole article'
On Saturday, House Speaker Paul Ryan (R-Wis.) tweeted an Associated Press article about workers finding modest bumps in their paychecks due to the new tax law he championed, and he highlighted the story of a Pennsylvania high school secretary who discovered an extra $1.50 in each paycheck, or $78 a year. Since that's considerably less than what the wealthy (not to mention corporations) get in the tax bill, critics pounced and Ryan pretty quickly deleted the tweet, which had already been screengrabbed and gone viral. CBS News' David Begnaud tracked down the secretary, Julia Ketchum, and asked her about her newfound notoriety.
"The paragraph above me, my quote, and the paragraph below my quote — those people got hundreds more and I got a $1.50 per paycheck more," Ketchum said, en route to a field trip. "So it shows me he may not have read the whole article."
— Tim Hogan (@timjhogan) February 5, 2018
Ketchum took the whole episode in stride, though, and said that while she was "really surprised" Ryan highlighted her comment, she wasn't opposed to the extra cash. "A dollar-fifty's a dollar-fifty, I'm not going to — I noticed it," she told Begnaud. "I watch my finances and I noticed it, so that was good. I was pleasantly surprised because it went up, it did not go down." Peter Weber
Starting in 2019, for the first time in 77 years, alimony won't be deductible for U.S. taxpayers, thanks to the Republican tax overhaul passed in December. That means that the new tax law "could soon lead to a surge in married couples calling it quits," Politico reports, citing divorce lawyers. "Now's not the time to wait," said Mary Vidas, former chairwoman of the American Bar Association's family law section. "If you're going to get a divorce, get it now."
For wealthy divorcés, especially, the deduction meant they could pay roughly 60 cents for every dollar of alimony. Divorce lawyers say the change in the tax law could lead to more contentious divorce cases and lower alimony payments when it kicks in, disproportionally hurting women. But ending the deduction is also projected to raise $6.9 billion over 10 years, helping defray the $1 trillion-plus cost of the tax bill. "This is one of the many provisions of the law that removes special rules applicable only in certain circumstances in order to help simplify the code and reduce tax rates for all Americans," said a spokesman for House Ways and Means Chairman Kevin Brady (R-Texas), who put together much of the tax legislation.
Couples have all of 2018 to "use the alimony deduction as a bargaining chip in their negotiations with estranged spouses," Politico says, but in some states, the clock starts running down fast, thanks to cooling-off periods of up to six months. "You can't just file for a divorce today, and expect that you're going to be divorced tomorrow," said Los Angeles lawyer Ed Lyman. You can read more about the ramifications for divorce settlements at Politico. Peter Weber
The U.S. government will now run out of cash in early March, thanks to the GOP tax law, the CBO says
Congress will have to the raise the debt ceiling in the first half of March, weeks earlier than forecast, or the federal government will run out of cash, the Congressional Budget Office said Wednesday. The CBO attributed the shortened deadline to the tax overhaul Republicans passed in late 2017, which will lower tax receipts by $10 billion to $15 billion a month starting in February. In all, the U.S. will take in $136 billion less tax revenue in 2018 under the new tax law, the nonpartisan congressional Joint Committee on Taxation estimates.
The Treasury Department has been taking emergency measures to keep the U.S. solvent since the debt limit was suspended Dec. 8, but if Congress doesn't raise the federal borrowing limit in early March, "the government would be unable to pay its obligations fully, and it would delay making payments for its activities, default on its debt obligations, or both," the CBO warned. The federal government ran a $23 billion deficit in December and a $666 billion deficit for all of 2017, the biggest shortfall since 2013.
Congress hates raising the debt ceiling but has never failed to do so, brinkmanship notwithstanding. Lawmakers also have to pass a spending bill by Feb. 8 to keep the government open, and deal with the immigration status of DREAMers before President Trump's March deadline. It's possible all these items will be rolled up into a big, must-pass package, The Washington Post notes, though House conservatives would balk "and it's unclear what political coalition will form this time to help raise the borrowing limit." Peter Weber
Republicans start 2018 with full control of the federal government, at least one government shutdown under their belt, a historically unpopular president, and a potentially ominous sea change among white women. But "Republican strategists are plotting an election-year survival strategy to steer the midterms away from the dangerous terrain of Trump's tweets and Capitol Hill dysfunction," The Washington Post reports: "Talk up job growth, highlight the soaring stock market and, most of all, convince voters that the tax-cut legislation that stands as their only major accomplishment is bringing back the good times."
About 60 percent of U.S. adults in a new Washington Post/ABC News poll say the GOP tax overhaul favors the rich over the middle class, and 46 percent say passing it was a "bad thing," versus 34 percent who call it a "good thing." But there's a large swathe of persuadable voters, and Republicans, wealthy donors, and the U.S. Chamber of Commerce are throwing tens of millions of dollars into a full-court press to convince voters to love the tax cut.
"Answer this question and I will tell you if we keep the House or not," says Corry Bliss, head of the GOP-aligned American Action Network, which pumped $24 million into GOP tax-cut boosterism last year and plans to spend $10 million more this quarter: "In 10 months, does the middle class think we cut their taxes?"
Without a push, most people won't really notice a 2018 tax cut until they do their taxes in 2019, though a single person making $50,000 should see $35 extra in each paycheck this year — or about $3,600 a year. The top 1 percent of households will get a tax cut of about $50,000. Luckily, the wealthy donors bankrolling the tax pitch were already thriving before the tax cuts — 82 percent of all wealth created last year went to the top 1 percent, Oxfam says in a new report, and the three wealthiest Americans now have the same wealth as the bottom 50 percent, or 160 million Americans. Peter Weber
"The [regulatory] process has got to be thorough but prompt," former IRS Commissioner Mark Everson told The Hill, even as confusion over the new system prompts "a flood of calls into the call centers." The new law makes a number of major changes to the tax code, including cutting the corporate tax rate to 21 percent from 35 percent, lowering income tax rates for six of seven tax brackets, and doubling the standard deduction.
The IRS will need to update tax forms and withholding procedure, and changes will be made more complicated by the agency's decades-old technology. "A lot of our forms are hard-coded," explained former IRS Commissioner John Koskinen, "so you don't just enter a little thing in your computer, you actually have to go into the code and change the date or change the forms." Bonnie Kristian
Corporations will get the bulk of the direct benefits from the Republican tax overhaul — $1.3 trillion over 10 years — and Wall Street seems to have done particularly well. Next year alone, America's top eight banks will get an extra $15.3 billion, according to an internal Goldman Sachs report obtained by ThinkProgress, including $3.5 billion for Bank of America, $3.3 billion for J.P. Morgan, and $1.4 billion for Citigroup.
But if Wall Street banks got a big bonus, hedge fund managers at Blackstone Group, Carlyle Group, and KKR & Co. arguably scored an even bigger win. Despite explicit pledges from President Trump, the bill he'll sign did not get rid of the carried interest loophole that allows hedge fund and private equity managers to claim their hefty earnings as capital gains, taxed at a significantly lower rate than ordinary income. And it isn't just liberals who are angry the loophole survived.
On Fox Business, Trish Regan slammed Trump and his team for allowing "fat cat private equity investors" to keep lower tax rates "than a New York City cop." America's "founding fathers never, ever anticipated a swamp like the one we have today," she said.
How is it fair that a private equity investor has a LOWER tax bracket than a NYC Cop?! This is just WRONG! Wasn’t the President supposed to CLOSE these special interest loopholes? Seems like our country is becoming ungovernable. #taxreform#TrishIntel pic.twitter.com/EZ6hzOb2l8
— Trish Regan (@trish_regan) December 18, 2017
On Wednesday, Trump's top economic adviser Gary Cohn said "we probably tried 25 times" to get congressional Republicans to ax the loophole, and "the president asked just this past Monday if we could still get rid of it." Cohn, formerly the No. 2 at Goldman Sachs, blamed Congress for Trump's failure, and Fox Business reported that Blackstone, Carlyle, and KKR did funnel "massive amounts of campaign cash into the coffers of Republican leaders in the House and the Senate as these same lawmakers voted for a tax bill that preserves the so-called carried interest loophole." But they also cited people "close to the tax bill process" who said "the White House didn't make ending the loophole a priority," citing "Trump's close relationship with Blackstone chief Steve Schwarzman, a key outside economic adviser." Peter Weber