JoAnna Mitchell, Staff Writer
Recently, a cooperative effort involving over 380 investigative journalists worldwide uncovered an expansive trove of documents exposing how the wealthiest people in the world, alongside large multi-national corporations, manage to avoid paying taxes on their vast collections of wealth. The papers, dubbed the Paradise Papers, show how the elite maneuver their finances and store obscene amounts of money in offshore accounts in order to dance around paying taxes that should be going back to benefit the communities they profit from.
Many large international companies such as Nike and Apple, have been exposed as tax dodgers, as well as members of President Donald J. Trump’s administration. The administration has been pushing Trump’s new tax plan, claiming that it will help working class citizens and “make America great again.” This new tax plan will, in fact, cut taxes to the wealthiest, including many members of the Trump administration, and potentially Trump himself.
According to the New York Times, the plan “will deliver a significant tax cut for corporations.” The bill favors businesses over the citizens of the United States, with $1 trillion in cuts going to corporations, over two-thirds of the total. The plan also proposes a permanent 15% tax cut for businesses, bringing them from 35% to 20%. This change is estimated to reduce federal revenue by $1.5 trillion over the next 10 years.
To make up for the loss of revenue from the business cuts and those to the wealthier citizens, lawmakers want to repeal tax breaks for things like medical expenses, moving expenses, student loan interest and adoption. The bill also proposes to cut Medicaid and Social Security to help recover lost revenue from corporate tax cuts.
According to the Washington Post, “Mr. Trump, in particular, might benefit from the elimination of the alternative minimum tax (AMT), which prevents taxpayers from using deductions and loopholes to avoid paying at least a minimum amount to the federal government.”
According to CNBC, a recently amended version of the plan would “effectively repeal the Obamacare individual mandate, which requires most Americans to have health insurance or pay a penalty. Senators say doing so will save more than $300 billion to give Republicans more budget flexibility. The Congressional Budget Office has estimated that it will lead to 13 million more people uninsured by 2027 and increase average Obamacare premiums.”
The New York Times states that the bill “repeals certain tax credits, including a 15 percent credit for individuals aged 65 or over or who are retired on disability. Right now, those individuals can claim up to $7,500 for a joint return, $5,000 for a single individual, or $3,750 for a married individual filing a joint return.”
This would see a tax decrease for 76% of American families, but it would increase taxes on a large portion of middle class Americans. While some within the socio-economic class will see some modest cuts, many will see an increase, while they lose tax breaks that cushion some larger expenditures.
In a nation with a shrinking middle-class and growing income inequality, ultra-rich individuals and corporations are receiving cuts that will allow them to gain more wealth while the meat of the American populace will shoulder the burden.