It appears that there is irony in the new Tax Reform and Jobs Act since it does tax the rich while aiding nearly everyone else
While being a completely bogus and straw man argument, Americans can be assured that whenever Democrats speak out against the cutting of taxes for individuals and corporations their tired old mantra will always be that the Republicans just want to cut taxes on the rich.
However in an interesting twist that comes with the added bonus of putting vast pressure on the bought and paid for New York Senator known as Chuck Schumer, the newly passed Tax Reform and Jobs Act actually does increase taxes for many of the richest Americans, while providing tax relief for nearly everyone else.
And the reason why I specify that the leading advocate against tax reform (Senator Schumer) will be in trouble is because the increase in taxes will hit many of the constituents on Wall Street who fund his campaigns.
Back in October 2016, the “millionaire, billionaire, private jet owners” of America’s elitist, liberal mega-cities (A.K.A. New York and San Francisco) celebrated the tax hikes that a Hillary Clinton presidency would have undoubtedly jammed down their throats proclaiming them to be a ‘patriotic duty’.Â Unfortunately, now that Trump has given them exactly what they apparently wanted…an amazing opportunity to ‘spread their wealth around”…they’re suddenly feeling a lot less patriotic.
Of course, as we’ve noted numerous times, while most people across the country and across the income spectrum will benefit from the Republican tax reform package, the folks who stand to lose are those living in high-tax states with expensive real estate as their SALT, mortgage interest and property tax deductions will suddenly be capped.Â And, asÂ BloombergÂ points out today, that has a lot of Wall Street Traders in New York drowning their sorrows in expensive vodka and considering a move to Florida.
One trader, sipping a Bloody Mary on a morning flight to somewhere more tropical, said heâ€™s going to stop registering as a Republican. En route,Â he sent more than a dozen text messages ripping the tax bill.
A pair of hedge fund managers said the tax bill is too tilted toward corporations, rather than individuals who should get more relief.
â€śMy clients are hard-working young professionals on Wall Street. I donâ€™t have a lot of good news for them,â€ťÂ said Douglas Boneparth, a financial adviser in lower Manhattan who counsels people throughout the industry. Most are coming to terms with it.Â â€śI donâ€™t think anyone is going to be surprised by the economic reality.â€ť
â€śThis provides a clear incentive for financial advisers to go independent,â€ť said Louis Diamond of Diamond Consultants. â€śWeâ€™re hearing from a lot of clients on this; itâ€™s just another reason why it makes a ton of sense, economically, to become self-employed.â€ť –Â Zerohedge
The new Tax Reform Act unmasks a secret that both Schumer and the wealthy didn’t want the American people to know about, and that is that increasing or decreasing taxes on earnings means nothing to the rich, as the majority of their income doesn’t come from earnings, but instead it comes from capital gains and rents.Â So even going back to the Income Tax Amendment of 1913 where the people pushed for this thinking that they were really going to be able to stick it to the wealthy, the rich have far too many loopholes to avoid the burdens of income taxation, and in the end the common people themselves became the ones who have over time paid most of these taxes.
But since this new legislation in many ways focuses directly on the assets (like housing) that the rich often funneled their money into, it now forces them into a corner to either find a different path to be able to cut their tax burden, or in the end incorporate themselves and change into an independent contractors, rather than simply being an employee.Â And of all the places this will affect the most, it is the two major Democratic strongholds of New York and California, who are also ironically the primary drivers of the current housing bubble.
Kenneth Schortgen JrÂ isÂ a writer forÂ The Daily Economist,Â Secretsofthefed.com,Â Roguemoney.net, andÂ Viral Liberty, and hostsÂ the popularÂ youtube podcastÂ on Mondays, Wednesdays and Fridays.Â Ken can alsoÂ be heard Wednesday afternoons giving an weekly economic report on theÂ Angel Clark radio show.