Tax Cuts and Jobs Act of 2017--40 Reasons Not To Like It

Facts culled from the "Tax Cuts and Jobs Act of 2017" Wikipedia page which draws from multiple sources: (https://en.m.wikipedia.org/wiki/Tax_Cuts_and_Jobs_Act_of_2017)

 

 

 

 

 

 

 

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"The CBO estimates that implementing the Act would add an estimated $2.289 trillion to the national debt over ten years, or about $1.891 trillion after taking into account macroeconomic feedback effects..."

"The individual and pass-through tax cuts fade over time and become net tax increases starting in 2027 while the corporate tax cuts are permanent."

"Most individual income taxes are reduced, until 2025. The number of income tax brackets remain at seven, but the income ranges in several brackets have been changed and each new bracket has lower rates."

"A different inflation measure (Chained CPI or C-CPI) will be applied to the brackets instead of the Consumer Price Index (CPI), so the brackets increase more slowly. This is effectively a tax increase over time, as people move more quickly into higher brackets as their income rises; this element is permanent."

"Fewer people will pay the Alternative minimum tax because the act increases the exemption level from $84,500 to $109,400 for married taxpayers filing jointly and from $54,300 to $70,300 for single taxpayers."

"For deaths occurring between 2018 and 2025, estates that exceed $11.2 million are subject to a 40% estate tax at time of death, increased from $5.6 million previously."

"The corporate tax rate was lowered from 35% to 21%, while some related business deductions and credits were reduced or eliminated."

"The Act contains provisions that would open 1.5 million acres (6,100 km2) in the Arctic National Wildlife Refuge to oil and gas drilling." [This was done to secure a vote from Senator Lisa Murkowski.]

"The nonpartisan Joint Committee on Taxation also estimated that the GDP level would be 0.7% higher (in aggregate, not per annum) during the 2018–2027 period relative to the CBO baseline forecast, employment level would be 0.6% higher and personal consumption level would be 0.6% higher during the 2018–2027 period on average due to the Act."

"These are higher levels, not higher annual growth rates, so these are relatively minor economic impacts over 10 years."

"During 2019, income groups earning under $20,000 (about 23% of taxpayers) would contribute to deficit reduction (i.e. incur a cost), mainly by receiving fewer subsidies due to the repeal of the individual mandate of the Affordable Care Act." "Other groups would contribute to deficit increases (i.e. receive a benefit), mainly due to tax cuts."

"During 2021, 2023 and 2025, income groups earning under $40,000 (about 43% of taxpayers) would contribute to deficit reduction (tax increases), while income groups above $40,000 would contribute to deficit increases."

"During 2027, income groups earning under $75,000 (about 76% of taxpayers) would contribute to deficit reduction while income groups above $75,000 would contribute to deficit increases"

"The Tax Policy Center (TPC) estimated that the bottom 80% of taxpayers (income under $149,400) would receive 35% of the benefit in 2018, 34% in 2025 and none of the benefit in 2027, with some groups incurring costs."

"Bloomberg reported (based on an analysis of 51 S&P 500 companies) that an estimated 60% of corporate tax savings was going to shareholders, while 15% was going to employees."

"The law also impacts healthcare by repealing the ACA individual mandate, resulting in projections of up to 13 million fewer persons covered by health insurance as some younger, healthier persons will likely choose not to participate."

"Those in the remaining less healthy pool will pay higher insurance costs on the ACA exchanges, which will result in additional persons dropping coverage."
"The Committee for a Responsible Federal Budget (CRFB) summarized several studies that indicated a boost to annual GDP growth rates would be about 0.1% each year rather than the Administration's claims of 0.4% per year."

"CBO reported that the budget deficit was $779 billion in fiscal year 2018, up $113 billion or 17% from 2017."

"The Tax Policy Center (TPC) reported its distributional estimates for the Act. This analysis excludes the impact from repealing the ACA individual mandate, which would apply significant costs primarily to income groups below $40,000."

"Compared to current law, 5% of taxpayers would pay more in 2018, 9% in 2025, and 53% in 2027."

"The top 1% of taxpayers (income over $732,800) would receive 8% of the benefit in 2018, 25% in 2025, and 83% in 2027."

"The top 5% (income over $307,900) would receive 43% of the benefit in 2018, 47% in 2025, and 99% in 2027."

"The top 20% (income over $149,400) would receive 65% of the benefit in 2018, 66% in 2025 and all of the benefit in 2027."

"The bottom 80% (income under $149,400) would receive 35% of the benefit in 2018, 34% in 2025 and none of the benefit in 2027, with some groups incurring costs."

"The third quintile (taxpayers in the 40th to 60th percentile with income between $48,600 and $86,100, a proxy for the "middle class") would receive 11% of the benefit in 2018 and 2025, but would incur a net cost in 2027."

"After taxes and transfers, the income of the top 1% would grow more than other income groups, continuing previous trends."
"The Gini Index would rise, indicating increasing inequality, reversing a trend from the latter part of the Obama administration."

"According to the CBO, under the Senate version of the bill, businesses receive a $890 billion benefit or 63%, individuals $441 billion or 31%, and estates $83 billion or 6%."

"Later in 2019, the Economic Policy Institute analyzed the data on business investment from the federal Bureau of Economic Analysis and concluded that, 'if the TCJA’s corporate rate cuts were working, we would be seeing a permanent rise in investment. Instead, investment growth is cratering.'"

"The analysis also found that since the tax cut firms increased dividends and stock buybacks by nearly three times as much as they increased capital investments." (38/)

"A January 2018 study from the firm Willis Towers Watson found that 80% of companies were not "considering giving raises at all.'"

"In 2027, if the tax cuts are paid for by spending cuts borne evenly by all families, after-tax income would be 3.0% higher for the top 0.1%, 1.5% higher for the top 10%, -0.6% for the middle 40% (30th to 70th percentile) and -2.0% for the bottom 50%."

 

Why Detroiters Might Be Skeptics

Belle Isle, Detroit
photo: Belle Isle Conservancy

This post originated as a comment on the Facebook page of WDET reporter and talk-show host, Craig Fahle. The state of Michigan, under Governor Rick Snyder, tendered an offer to lease Belle Isle for 99 years and take over operation of it. The offer, if implemented as proposed, included an entrance fee for access to the island, which comprises the largest (982-acres), most scenic, and wide open park in the city. Belle Isle rests in the middle of the Detroit River, just east of downtown, and is accessed via the MacArthur Bridge. The city purchased Belle Isle in 1879, and the plan for the island was designed by Frederick Law Olmsted, who also designed Central Park in New York City. For over 130 years, Belle Isle has provided city residents free refuge from the congestion and turbulence of urban life.

See my note below to Craig which applies, I think, equally to city residents' opposition to the expected appointment of an Emergency Manager by Governor Snyder. The governor contends that a "financial emergency" exists in Detroit that requires dismissal of the Mayor and City Council. Some residents, including the accountant and former mayoral candidate, Tom Barlow, refute the notion that such an emergency exists. Read his press release, or listen to him on the Craig Fahle Show to get a sense of how some sensible people might doubt the need for an emergency manager.

My comments on Craig's Facebook page:

Hey Craig, I just heard the discussion you hosted about Belle Isle. I know you are really well informed about Detroit, and things in general, so I know you've carefully considered the pros and cons of allowing the state to run Belle Isle. I get the impression you are in favor of it, perhaps as a result of the absence of any better proposals. I agree the island needs some major refurbishing. I love the botanical garden, but always feel really sad when I go in there and see rust eating through major structural supports. I remember my uncle, a farmer, always walking around with a can of paint in one hand and a brush in the other, and when I was a kid I thought he just liked the smell of paint, but now I understand what he was up to: preventive maintenance. Not much of that seems to happen on Belle Isle, or at a lot of other dilapidated historic sites in Detroit (Fort Wayne springs to mind).

You repeatedly mentioned that people seem to base their opposition to a state takeover of Belle Isle purely on an emotional level. I guess I'm not really sure what you mean by the term "emotional" in that context, but I'm guessing you mean sort of reflexive, and not based in fact. Well, I kind of think opposition often stems from a defensive reflex to resist intrusion by people who are not city residents offering "solutions" to city problems, but the reflex is definitely based in fact.

As you know, black people constitute a majority of the population in Detroit, and as you also probably know, the municipal, state, and federal governments have not been particularly kind to them over the years. Sure, since the Civil Rights Era, black citizens have been treated less egregiously bad by government, but they also haven't been afforded wage or education equality despite doing comparable work and paying comparable taxes. Jobs have moved away from where they live, while they lack the economic mobility to chase jobs into the suburbs (where residents are typically less than welcoming); city schools attended by poor people rarely share the same resources as suburban schools.

from: "Paradise Valley and Black Bottom"
By Vivian Baulch / The Detroit News

But you know all this. I don't think you would dispute those assertions. The big thing I wanted to mention that's just got to stick in the minds of black Detroiters -- and I'm not trying to speak for anyone here -- is the destruction of the Hastings Street, Paradise Valley, and Black Bottom neighborhoods to create housing projects and put a freeway through. Honestly, that one thing in this city, if it were done to affluent, white people -- and it never, ever would be -- cries of "Genocide!" would echo through the land. But in came the government architects and engineers, who said, "Trust us."

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Sign in response to proposed
Sojourner Truth Housing Project, February 1942
photo: Wikipedia

And look what happened. Vibrant, thriving neighborhoods where destroyed -- for a freeway (I-75) and a housing project (Lafayette Park).

Then there's the 1943 Sojourner Truth "riot" which wasn't really a riot at all, despite the fact that black people got shafted when they were told they couldn't move into the new projects ostensibly built to alleviate their housing shortage. The "riot" began as roving bands of white thugs beat innocent black people senseless while police watched.

Pulling a Man Off a Streetcar, Detroit Riot, 1943
BlackPast.org

And then there's the “riot” of 1863. On the basis of an alleged but unproven rape by black man of two white girls in a tavern, a white mob beat numerous black residents (in one case, if I recall correctly from a history I read a while back, the mob beat a father nearly to death in front of his wife and children as his business [blacksmith?] was burned. As it turned out, the "black" man accused of raping the girls was in fact Mexican, but bigotry is never particularly clear eyed. (The violence and destruction occurred in Black Bottom, I think, and black people were making a pretty good go of it in Detroit back then despite every effort of white people to throw up barriers and exploit their second class status in Detroit. This northern city remained a relative haven compared to slavery in the south.) 

Black Bottom, a center of the black community,
replaced by Lafayette Park,
built between 1958 and 1960
photo: Wikipedia

In the 1960's, black-owned businesses that were victims of the "slum-clearing/urban renewal" of Black Bottom moved over to 12th street. In the '67 riot, these businesses were burned and looted along with white-owned businesses, finishing off many once prosperous black business owners. Despite the narrative that prevails in the suburbs, white people were not the only victims in 1967.

So maybe folks do react emotionally, but they bring a lot of dark history to back up that emotion. I think opponents to a state takeover of Belle Isle (or an emergency manager of Detroit) -- white, black, or whomever -- are right to be very, very skeptical when rich, white, opportunistic people from the government say, "Trust us." (Sorry for posting a novel on your page, but I think we too often [willfully?] forget the past in this town.)

Detroit Burning:
Photos From the 1967 Riot
-- Life Magazine

Build Baby, Build! Rewewable energy brings cheaper electricity & more jobs

2050 Power Generation Scenarios
RMI.org

 The utilities don't want it to happen.

They make their money when they build big, centralized power plants powered by coal, natural gas, or uranium. They take a mark up on the cost of the plant as profit. That's what most state regulations mandate: states allow utilities to mark up the cost of the plant by a fixed percentage to insure that utilities do not gouge customers. But the rule that protects customers also hurts them: utilities are guaranteed that fixed percentage on the cost of the plant as profit. How many other businesses can guarantee shareholders a profit? And the more expensive the plant, the bigger the profit.

But the state giveth, and the state can taketh away.

Distributed renewables are a lot smarter way to provide power. That means small, local, combined heat and power generators fueled by natural gas set up alongside rooftop photovoltaics, small windmills scattered about, and biomass gas generation facilities that turn food and animal (including human?) waste into natural gas and compost. Such infrastructure requires lots of components that we could manufacture locally and employ local people to install and maintain. Distributed renewables utilize existing technology and cost less to install and maintain, and once installed require no fuel source (except for biomass, which consumes waste).

Meeting demand is no problem. Distributed renewables combine different power sources that generate best at different times, use gas generators for peak loads,implement energy storage via pumped water (been around for over a hundred years), pressurized underground air, or batteries. Distributed renewables meet demand even more easily when combined with improved consumption efficiency that easily cuts household and industrial electricity use by 50%, and in many cases up to 80 % . Improving efficiency more than pays for itself and employes lots of people. (see negawatts at RMI.org)

Distributed renewables are more reliable, too. When you have lots of little power sources, if one fails, the impact is small. When a large centralized plant is shut down, the impact is large and for longer duration -- nuclear power plants are often shut down for months or years when faults are discovered.

But utilities hate this idea. If we distribute power generation, utilities lose their cut. They lose control of a monopoly with a guaranteed profit. Hence, they prefer to rip us off and poison us.

Ponder it.

Michigan Hydro-Fracturing: Gassed Politicians Sell Out Residents

One of the three State Excelsior wells
on Sunset Trail in Mackinaw State Forest, Kalkaska County, MI
Photo by LuAnne Kozma, Ban Michigan Fracking

"Michigan is perfectly safe and we have safeguards in place," Horn said. "This does not mean won't look for improvements in public safety." -- Rep. Ken Horn, R-Saginaw

"'Because there is more money to be made, especially with high oil prices now, legislators will want to move forward' and lease more land to operators, mostly in the northern half of the Lower Peninsula of Michigan." -- Steve Chester, the former director of the state Department of Environmental Quality and now an attorney representing gas companies.

"...chemicals found in the frack water include benzene, toluene, xylene, and ethylbenzene."

Above are some lines from "Fracking in Michigan appears on the upswing," by Jay Greene in Crain's Detroit Business.

Everything's gonna be fine...

OK, I should qualify that. Everything's gonna be fine if you're a rig operator, or a Michigan state legislator, who does not draw drinking water from an aquifer punctured by one of these wells. Likely then, you'll be fine, especially the state legislator who will tip-toe through the revolving door at the end of his term, and into the glorious corporate realm where money grows on trees.

Those gas companies intend to shaft the rest of us, though.

While it is true that gas companies drilled for gas in Michigan over the last 50 or 60 years, as the article states, these were shallow wells, under 2500 feet, that required only 50,000 gallons of water to fracture. The new wells will use deep hydraulic fracturing, and require 3 million to 5 million gallons of water. Actually, what goes in these wells they do not call water. They refer to it as slickwater.

Slickwater is water mixed with very, very toxic chemicals; the sort of chemicals that, when you buy them in the hardware store for cleaning paintbrushes, or prepping materials for painting, the manufacturer puts that Jolly Roger skull and crossbones on the side of the can.

photo: Wikipedia

Smelling this stuff causes cancer. Drink it? Are you nuts? Well, gas drillers say no worries, you can drink water contaminated with benzene, it won't hurt you. That's why our leaders in Congress omitted fracking fluids from the Clean Water Act back in 2005. Because these chemicals are safe to drink. Go ahead, drink them Congress. (Just kidding Congress, don't drink them -- they would kill you. But it's fine if your constituents drink them, right? As long as the campaign contributions from gas company lobbyists flow like... like slickwater.) And if you thought the organic compound cocktail was bad enough, wait there's more. Drillers also pump radioactive isotopes like Cobalt-60, with a half-life of 5.27 years, into their wells "to determine the injection profile and location of fractures created by hydraulic fracturing."

But I'm blowing the whole toxic groundwater thing way out of proportion. These guys, these politicians and well-drillers know what they're doing. They line these wells with steel casings held in place by concrete -- special concrete -- triple-walled down to a point below the punctured aquifer. All that steel and concrete, you see, prevents the toxic slickwater from seeping into the aquifer where our drinking water resides. But there are seams in the steel -- they insert it in sections, and join the sections. Seams in pipes fail. Especially when jammed into rock and pumped full of nasty chemicals at high pressure. Thousands of feet of layered bedrock, under the pressure of its own weight, surely impose uneven forces on well-casing seams. Surely many of the hundreds of thousands of expected wells will experience failures of these seams, and many of these will propagate contamination upward toward aquifers. And don't forget the concrete used to hold the casings in place near the surface, like the stuff made by Halliburton that famously plugged the Deepwater Horizon Macondo well in the Gulf of Mexico. That's the one were the concrete from Halliburton failed, the well blew, eleven men were killed, and 5 million barrels of oil were spilled into the Gulf, trashing shrimp and tuna fishereries, killing untold numbers of porpoise, sea turtles, and birds. More to the point, a well-head at a fracking site in Pennsylvania failed -- a blow out -- and streamed 10,000 gallons of chemical laden water across hillsides and into streams.

These guys know what they are doing, you see. There won't be any mistakes in Michigan. That concrete from Halliburton will not fail. As Rep. Horn said, "Michigan is perfectly safe and we have safeguards in place..."

And yet, tales of mistakes made abound. Really. Have a look at ProPublica's ongoing series on hydraulic fracturing: "Fracking: Gas Drilling's Environmental Threat." Or, you can Google "hydraulic fracturing lawsuits" and watch the cases scroll by. All over the country, fracking destroyed groundwater and people are pissed. Gas companies might pay some damages, but they won't pick up the entire tab. It will be residents forced to add elaborate filtering mechanisms to their municipal and residential wells. And that's to deal with the drinking water contamination. When drilling rig well-heads and containment ponds fail and contaminate streams, creeks and rivers with millions of gallons of "slickwater" drillers will likely be fined, but little or no remediation will be performed. How do you extract millions of gallons of toxic slickwater from a mountain stream. You don't. The fish die, the stream dies, and people downstream drink the stuff, now diluted but still there when municipalities pump it into homes.

The safety claims of drillers are a canard. You can not drill through aquifers and force toxic chemicals down the well at high pressure, and then pump those chemicals out and dispose of them without contaminating groundwater and the surrounding environment. You can not guarantee that a concrete or steel lining of a well extending 500 or 1000 feet below the surface will not fail and allow chemicals pumped in at high pressure to seep into surrounding aquifers. You can not guarantee that chemicals pumped into a well that extends horizontally 10,000 or 15,000 feet will not be compromised by cracks that allow methane (natural gas) and fracking fluids at high pressure to seep upward and contaminate groundwater. In fact, such seepage of gas occurs naturally. That is the explanation gas companies give when methane does contaminate groundwater and they seek to repudiate peer-reviewed scientific studies with sneering, specious argument. (Several links here are borrowed from "Rolling Stone Responds to Chesapeake Energy on 'The Fracking Bubble'" -- a worthwhile read.)



"The Fuss Over Fracking: The Dilemma of a New Gas Boom" -- Time

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Further, the gas that seeps into groundwater is not the only problem caused by methane leaks. Methane, or natural gas, when leaked into the air, causes global warming at 21 times the rate caused by carbon dioxide. And fracking leaks a lot of gas during the drilling and extraction process. Extracting and burning gas from shale might actually be worse in global-warming terms than burning coal for power generation. You can find a rundown of those effects in "Methane Emissions from Natural Gas Systems." (Thanks again, Rolling Stone.")

The problem with the "naturally occurring" explanation is that existing seepage in un-fractured ground occurs minimally and in isolated locations, not widely and at levels that contaminate groundwater to such a degree that groundwater becomes "carbonated" with methane to the extent that tap water will ignite when exposed to a flame. In fact, the only guarantee with fracking is that well casings will eventually fail, and that containment ponds will breach their boundaries, and taxpayers will be left holding the tab. And nearby residents will be left dying of preventable illness, and living in a ruined environment amidst a broken ecosystem incapable of sustaining itself any longer. Gas companies will extract gas, make piles of money, pay off politicians, and then leave residents sick and stuck in a wasteland no one wants to inhabit. The jobs will be gone too.

Sadly, the jobs that supposedly justify the destruction and risk of drilling might disappear a lot sooner than most people think. Recent studies have shown that gas yields from deep hydro-fracturing wells peak much earlier than expected and then trail off precipitously -- like in 11 years. Gas companies will descend on ill-informed communities, abetted by ill-informed, bribed politicians, pump out what little gas they can get, and take the money and run.

We are being fooled, done-to, fleeced, reamed, shafted, and screwed by the gas companies and their payed-off political shills. The gas will eventually be depleted, the well-casings will erode and fail, and cracks underground will propagate toxic chemicals and methane into our drinking water, our wildlife will be driven off by the noise, lights and toxic spills, hunters, hikers, and recreation seekers of every other stripe will flee, and rural communities will be left unemployed in a ruined wasteland that was once pristine forestland. Ecosystems that took thousands of years to establish a sustainable existence will collapse and die. And the gas companies and politicians will be long gone, sitting on a beach in the Cayman Islands counting their money and laughing at the saps that gave it to them.

A far better solution is to seek improved energy efficiency and to develop local, distributed renewable energy sources that can provide more, better-paid, jobs with little or no environmental degradation. Read my post, "Keep Doing What We've Been Doing, Destroy the World..." and check out the study detailing the good work we could do in pursuit of healthy, sustainable alternatives to oil, coal, and gas.

Don Siegelman: An American Political Prisoner

This guy got screwed big time. He reported to jail in Alabama yesterday (11-Sep-2012).

He tried to pass a referendum guaranteeing free college education to impoverished students in Alabama... Karl Rove & Co threw him in jail so his opponent in his campaign for governor would win.

They convicted Siegelman of taking a bribe, but the charge is unfounded and unprecedented in terms of overreaching. Lots of people who know, say so. No matter, his opponent's wife was the federal prosecutor. This case has gone on for years, Siegelman spent nine months in jail, and his life is pretty much ruined. And then the Supreme Court turned down his appeal.

I never thought this prosecution would be at this point. I am at
the end of my rope and you are my last hope for freedom.

I thought Karl Rove’s involvement and the fact that my
prosecutor’s husband was running my opponent’s campaign
would have ended this. -- Don Seigelman

When I grew up, teachers told us about this sort of persecution happening in the Soviet Union and banana republics and I felt glad to be an American. Can we feel glad if this conviction stands?

If you sympathize at all, and do not believe the US should imprison people for political opposition, please sign the petition.

Visit his page, DonSeigelman.org, or go straight to the petition at Change.org