Readers Write: Tax bill

Congrats, Minnesota low- and middle-income taxpayers ("Trump celebrates after Congress wraps up massive tax package," StarTribune.com, Dec. 20). You have just been thrown the tax equivalent of a small roll of paper towels. Possibly helpful in the short term, but with a very short life span. The bulk of the benefits of this plan accrue to the top 1 percent of earners. The president tells us this plan will hurt him significantly. What are the chances we will see his tax return to prove his claim? Oh, by the way, when can I expect to see my postcard federal tax form?

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Yes, I can visualize it now — filing one's taxes on a postcard:

Line 1: Taxable income (for appropriate tax year) $XXX.XX

Line 2: Income tax due (enter amount from line 1) $XXX.XX

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President Donald Trump promised during his campaign that he would close a tax loophole for hedge-fund managers. But the Republicans' tax bill keeps that loophole, called the carried-interest provision, which allows fund managers to pay a lower tax rate on investment profits.

With the carried-interest provision, investment-fund managers can pay a lower capital gains tax rate on their share of their fund's profit. Usually it's around 20 percent, significantly below the proposed top income tax rate of 37 percent. According to the IRS, the average income for hedge-fund managers in 2016 was $2.2 million. By comparison, an individual with dependents earning $51,800 and filing as head-of-household will be taxed at 22 percent under the new tax proposal, while high-income earners making more than $500,000 per year would be taxed at 37 percent.

To be fair, the Republican tax proposal makes a slight change to the carried-interest provision from the current law in that assets will have to be held for three years, rather than one year, to qualify for the lower rate. But that may not matter much, as many fund managers hold assets for more than three years.

The Trump administration now claims it worked diligently to eliminate the carried-interest loophole during the legislative process, but were stymied by the GOP-controlled Congress. If President Trump really wanted to eliminate this loophole, he could simply have threatened to veto the tax cut legislation until lawmakers finally eliminated it.

The gross unfairness of this loophole is preserved in the Republican tax bill and is being condoned by the president who promised to abolish it. Voters should remember this in 2018.

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It is well-accepted that the Republican tax bill passed without committee hearings, open debate and the opportunity for legislators to completely review the legislation. However, it is incorrect to say that it was passed without compromise, because there was significant compromise. It just happened that the compromise was between Republicans and conservative principles. Supporters of conservative principles surrendered to Republicans their long-held stance against deficits and their belief in "fiscal responsibility." In exchange, they received from Republicans tax reductions for corporations and the wealthiest Americans.

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The Star Tribune can't even report the passage of the tax bill without showing its deep bias, calling it "deeply" unpopular. You should say "deeply unpopular among Democrats and the media." You have no basis to call it unpopular among the general public. This is the complete opposite of how you covered the actually unpopular Obamacare legislation.

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Republicans are failing in their efforts to persuade an increasingly skeptical public that the tax bill is a good thing. In a CNN poll released Dec. 19, disapproval had grown in the past month from 45 to 55 percent, with approval stuck at about one-third. The Republicans' credibility problem starts with its leader, who has described the bill as a "big, beautiful Christmas present" for the American people. A duplicitous billionaire's endorsement should be a prominent red flag. Then there is the top Republican senator's decision to use the budget reconciliation process to quickly push through broad, far-reaching legislation on a narrow, partisan basis. Hewing close to the party line are most (not all) Republican representatives, including my own (Jason Lewis), who posted on Facebook that he is "committed to seeing our economy grow stronger to secure our children's future."

To me, it is hard to believe that the economy will grow enough to offset the trillion-dollar weight being piled onto the deficit, a burden that will surely be shouldered by our children. What we are likely to see (besides a big, beautiful present for the wealthy) is a corporate windfall that will be used for stock buybacks, shareholder dividends and CEO salaries. A tax plan is a statement of values expressed in dollars. Up and down the line, the Republican Party is showing who it values. And it's not who the party says.

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Many people surveyed said the legislation gives billionaires, like the president and his family, a financial windfall. As you will recall, Donald Trump wrote "The Art of the Deal," and he accomplished this self-serving feat right in front of our eyes.

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It is no surprise that the Star Tribune Editorial Board is against the new tax reform (Dec. 20), as this opposition conforms to the board's political beliefs. Further, like-minded letter writers are catered to with greater frequency. But let's reach a compromise. Let's allow the macroeconomic benefits to occur before the final analysis is made. Can we stop the hyperbole and see how large and small businesses respond? Let's let the payroll check stub speak for itself. Democrats, if the new tax measures fail, you have much political ground to gain. But if it succeeds, you will be rewarded with long-standing minority status. So instead of conjecture, let's allow future economic performance be the judge.

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Rather than dwell on the inexplicable, hypocritical, partisan GOP tax scam being crammed through Congress, I recently decided to distract myself with a beloved, classic Christmas movie: "It's a Wonderful Life."

You probably know it. It's the story of a massively wealthy bank owner who somehow gets his hands on extra money that really belongs to someone else. It's an insignificant amount of money to him, but life-changing to most of his community. Rather than do the right thing and return it, or help his community or customers, or give his employees a raise, he decides to try to run his competitors out of business for his own gain, even if it could bankrupt a huge number of people. Along the way, hardworking families experience further poverty, debt, stress, depression and attempted suicide. Meanwhile, the bank owner's life seems unaffected by his unjust windfall.

The only way out of this tragic situation is for the truly poor folks in town to dig even deeper, giving up the little savings they have and bail out the fragile middle-class financial infrastructure. Nearly forgotten is the beloved soldier, off to war, who returns to find his already struggling hometown fighting to overcome this inexplicable transfer of wealth. In the end, the regular folks are poorer, but happy to somehow overcome and survive another day, whereas the wealthy bank owner is the only one financially better off. Or as some might call it: a happy ending!

Look for it under "Documentary."