It’s no secret that the top legislative priority for many conservatives and corporations is so- called “tax reform.”
The focus for many multinational companies is getting a free pass on taxes by pushing for a “territorial system,” which means zero taxes for profits characterized as generated by foreign subsidiaries. Right now American companies have an estimated $2.6 trillion in profits booked overseas in order to avoid paying U.S. taxes since under current law multinational companies can indefinitely “defer” paying the 35 percent taxes that are technically due on foreign-made profits until the time that they bring back or “repatriate” those profits.
President Donald Trump is reportedly considering allowing those deferred taxes to be repatriated at a 10 percent rate instead of the 35 percent that should be due. This is rewarding companies that have, in many cases, been using accounting gimmicks to shift profits to the books of overseas subsidiaries in order to avoid paying the taxes that fund our government. Worse yet, if Trump and the GOP get their way and shift the U.S. to a territorial system, it will be a green-light for offshoring jobs and investments since the incentive to profit shift will be stronger than it has even been.
President Trump scandalously proclaimed that not paying taxes is “smart,” but does that hold true when we’re talking about the sentiment of other ultra-wealthy individuals? The New York Times is running an excerpt from a new book titled Uneasy Street: The Anxieties of Affluence, which has some insight into the issue.
The author interviewed 50 wealthy families about how they felt about their income and lifestyle. As indicated by the title, the main recurring theme of the interviews was how much stress their wealth and spending created, due to social norms and rampant inequality. After describing housewives hiding price tags for everything furniture to bread, so as to not overtly signal to their housecleaners their spending levels, the author concludes:
The ways these wealthy New Yorkers identify and avoid stigma matter not because we should feel sorry for uncomfortable rich people, but because they tell us something about how economic inequality is hidden, justified and maintained in American life.
Keeping silent about social class, a norm that goes far beyond the affluent, can make Americans feel that class doesn’t, or shouldn’t, matter. And judging wealthy people on the basis of their individual behaviors — do they work hard enough, do they consume reasonably enough, do they give back enough — distracts us from other kinds of questions about the morality of vastly unequal distributions of wealth.
[…]When we evaluate people’s moral worth on the basis of where and how they live and work, we reinforce the idea that what matters is what people do, not what they have. With every such judgment, we reproduce a system in which being astronomically wealthy is acceptable as long as wealthy people are morally good.
This is very thought-provoking, particularly in context of potential tax cuts for the wealthy paid for by slashing services like Medicare, Medicaid, nutrition assistance, public education and other vital programs that families depend on. As we recently examined, Trump’s tax cuts will almost certainly mean more inequality. Without “feel[ing] sorry for uncomfortable rich people” getting tax breaks, it’s worth nothing that more inequality will almost certainly lead to more social pressure, which will lead to either more anxiety or alienation for families like those profiled in the study.
If cutting services for families doesn’t faze them, perhaps giving rich people more anxiety is something to give pause to Trump and his fellow Republicans.
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