By Morris Pearl
President Trump and his administration have time and again promised that ordinary, working Americans will be the ones who benefit from their proposed overhaul of the United States tax code.
Speaker Paul Ryan and many members of the House GOP have paid great lip service to the idea that the middle class will benefit from their tax plan.
And yet, now that we’re here, it’s clear: The Republican vision of tax reform will hit the middle class hard, and it will hit them hardest in states like New York.
We will see deductions that help middle class families taken away, and services that many American families rely on cut to the bone.
For many middle-class families in New York, this will look like losing the deduction of what you pay in state and local property taxes from your federal taxable income.
This deduction is essential for many working and middle-class Americans, but the GOP wants to get rid of it instead of eliminating the exemptions and deductions that benefit only wealthy individuals and corporations that could easily bear the financial burden of losing them.
Republicans love to talk about the supposed horrors of double taxation when it comes to the estate tax, a tax only the heirs and heiresses of a fraction of 1 percent of the wealthiest Americans ever have to pay. But they seem to have no problem with double taxation when it comes to middle-class Americans.
All of this double-talk is designed to sell a plan that gives America’s wealthiest citizens a tax cut that we truly do not need and will not benefit the rest of America.
Trump and Ryan continue to cling to the long-disproven concept of trickle-down economics. They are still trying to sell the tired story that by giving cuts to wealthy Americans like me, they are creating a rising tide that will lift all ships. The truth is, wealth trickles up.
When I see people with little white wires leading from their ears to their pockets, I can hear the ka-ching of their money going into the coffers of Apple and Facebook, and the value of my investment portfolio going up.
I know my tax cut doesn’t help anyone else. I have enough money to spend what I want to spend. If I get more, that will increase savings that my kids will eventually inherit, and that only helps them, not the struggling middle class.
Economic inequality is at a 100-year high in the United States, and wealth appears to only be getting more concentrated. Trickle-down tax structures don’t fix this, they make it worse.
Tax reform should be an opportunity to fix the real problems in our tax code: carve-outs, loopholes and deductions that are used and abused by millionaires, billionaires and corporations.
It is a travesty that Republicans are calling their proposed payday for the wealthy “tax reform.” It’s time to call it what it really is: the Tax Relief for the Wealthy Act.
New York House members considering this plan should reject it and demand something better and more fair.
Morris Pearl is chairman of the Patriotic Millionaires and former managing director at BlackRock Inc.