No, billionaires aren't getting a tax cut.
Hardly anybody is, actually.
The proposed bill, which has yet to pass the full House and Senate, does include the proposed elimination of taxes on tip income and overtime pay. (Both of those provisions would sunset at the end of 2028 unless extended.)
How many billionaires do you know who make their living on tips or hourly wages?
Nobody who currently has income subject a tax bracket, including the billionaires who occupy the top tax bracket (along with anybody else who makes more than about $609,000 a year (single) or $731,000 a year (married filing jointly), is getting a tax cut.
Say what?
That's right - nobody is getting a tax cut. The tax cuts went into effect in 2017 with the passage of the Tax Cut and Jobs Act (TCJA). That legislation provided that the cuts would sunset at the end of this year if not extended. The proposed bill (I won't say the name of it because it's a stupid name) merely extends those rates. It doesn't cut taxes for anyone (except tip and overtime earners).
Therefore, when the Democrats in Congress say that billionaires are getting a tax cut, they're essentially lying. And if they vote against the bill, they're voting to let the current tax rates sunset at the end of this year, meaning that they're voting for tax rates to go up next year - on billionaires, millionaires, you, me, and single filers making as little as $13,000 a year, married joint filers making as little as $25,000 a year.
In other words, they'll be voting to raise taxes on the rich, the middle class, and the poor.
What other tax provisions are in the proposed bill? The Child Tax Credit would increase by a whopping $100, but that phases out with income, so billionaires don't qualify.
There's a proposal to allow the deductibility of interest on car loans for cars made in the U.S. Billionaires pay cash for cars, so that doesn't benefit them either - that would be a low- to middle-class benefit.
The estate tax exemption would double, from $15 million to $30 million, vs. letting it drop to $7 million if the TCJA were allowed to expire. So yes, that tends to benefit wealthier Americans, since they can leave a larger amount to their heirs without incurring estate taxes. And most of us don't have an estate larger than $15 million. But it would also benefit farmers who aren't that wealthy in terms of income, but have a lot of land, and want to keep the family farm in the family. It's not like those farmers are "rich" in the sense that the entitled class can "soak" them; they'd have to sell the farm to redistribute their wealth to pay off your kids' student loans.
And there are business tax provisions that would benefit businesses, including small businesses that are owned by wealthy individuals, as well as large corporations that are owned by stockholders. Let's examine that.
Those small businesses hire the wage earners that are going to get their taxes eliminated on their overtime pay. So the workers benefit if those businesses are able to hire more workers and/or pay more overtime. And they hire the people who work for tips, who also benefit.
As for stockholders, I heard one liberal talking head (who should know better, he used to work on Wall Street) say that anything that benefits the stock market only benefits the rich.
Really? I started investing in stock mutual funds (which own individual stocks, in case you haven't figure that out yet) when I was in my twenties, in a 401(k). I sure wasn't rich back then. Teachers and nurses have pension funds that are invested in the stock market, and most of them aren't rich either. In fact, the largest stockholders in the country are institutions that manage retirement funds. If you have a 529 plan for your kids or grandkids, it's probably at least partially invested in the stock market, and the kiddos don't even have an income yet.
The standard deduction would increase by a couple thousand, which pretty much benefits everybody who doesn't itemize. There's a boost to the standard deduction for seniors. There's a low-income housing tax credit - that certainly doesn't help billionaires.
The most egregious of the tax provisions, in my view, is the proposal to lift the state and local tax (SALT) exemption from $10,000 to $30,000. That would also be phased out at higher income levels. Why do I find it egregious? Because it only benefits those who live in places that have extraordinarily high state and local taxes. So legislators in places like New York, Connecticut, California, and Hawaii are clamoring for it - they hated the $10,000 limit imposed in the TCJA.
But why should taxpayers in the rest of the country effectively subsidize the states where ridiculous over-regulation and entitlement programs like sanctuary policies have resulted in excessive taxation? If New Yorkers and Hawaiians want tax relief, instead of looking for a larger SALT exemption paid for by taxpayers in other states, they should vote for leaders who will cut their state and local taxes, and implement policies that alleviate their regulatory and entitlement burdens to allow that.
That's about it for the tax provisions. No tax increase for billionaires, or pretty much anybody else. Just avoiding a big tax increase for everybody who makes more than about $13,000.
Now, what about everybody losing their health care? Well, that's about changes to Medicaid, the federally funded health care program for those who can't afford health care.
Look, all they're trying to do there is tighten up the program so the people who are currently abusing the system can no longer do so, because you and I are paying for them to get free health care when they actually shouldn't qualify. I won't go into all the details, but here are the two most egregious abuses, and what the bill would do to address them.
The first is that there are a lot of people who apply for Medicaid saying they can't afford health care, but the fact of the matter is that if they'd just get a job, they could pay for Obamacare, or get health care through their employer. In other words, they're physically and mentally capable of working, they just don't want to, because they can game the system and get free stuff, like Medicaid.
So the bill would require that if someone is able to work, they have to either work or perform qualifying community service for at least 80 hours a month (that's less than 20 hours a week, people), and they qualify for full Medicaid benefits. They just have to document it. That's it.
The bill isn't going to kick anyone off Medicaid who isn't physically or mentally able to work. This provision is just intended to get the deadbeats off the rolls, so you and I aren't bankrolling them any more. Right now, they're our dependents, whether we like it or not. I don't know about you, but I'm ready to disown them.
The other abuse is one that's aided and abetted by numerous law firms across the company. Let's say that Pops passes away, and Ma needs to be moved into a care facility (or the kids just want to put her in one). But those facilities aren't cheap, so the kids want you and me to help them pay for it. They put Ma on Medicaid to pay for the care facility. Meanwhile, the kids keep Pops and Ma's palatial house, which is worth a small fortune.
There are law firms that specialize in helping families arrange this in order to keep the estate intact. The proposed bill would end the practice by denying Medicaid to anyone who owns a home worth more than $1 million. I believe that's fair, don't you? If someone owns a home worth a million bucks, they can probably afford insurance. If they have to move into a care facility, they can bloody well sell the house - they don't need it any more, and the kids can make their own way in the world.
So again, when the Democrat lawmakers say that the bill would take health care away from millions of Americans, I believe they're lying. I qualify this one with the term "I believe," because I doubt there are millions of people on Medicaid who are able to work but just don't want to and are gaming the system, plus more who are in care facilities but own homes worth more than a million bucks.
But if there are, that just makes passing these provisions all the more urgent. If having our debt downgraded doesn't provide an incentive to get our fiscal house in order, I don't know what will.
