BY RANDY LEVINE
Mr. President, as one of your longest standing supporters, I respectfully request that you revisit your support for the individual tax reform package.
The good news is there is still time to fix it and make it better and more efficient. But as Yogi Berra said, Mr. President, “it is getting late early.”
Republican leadership in Congress has disappointed you time and time again.
Now your good intentions on tax cuts are following the same path. The plans on the table are not middle-class tax cuts. They may not even be tax cuts at all.
When you ran and won, you ran on draining the swamp, not giving new life to it.
You ran on tax cuts, not on the swamp’s idea of tax reform where special interests win.
This is a plan that helps Wall Street, hedge funds, private equity managers, real estate and oil and gas partnerships and individuals who disguise income as profits or distributions.
In fact, some of those entities keep money offshore and don’t pay any tax at all. Not surprisingly, some of the largest supporters of these bills are donors who come from those industries.
No one wants to penalize them, but they should not be given benefits which are far greater than those given to others. This plan does not help many individuals who earn their income and report it as such.
It is wrong to eliminate or limit property tax, mortgage and interest deductions. Hardworking people have relied on them for years, this is how they afford to buy homes and build nest eggs in the equity of their homes.
These proposals erode that equity, equity countless numbers of Americans rely on for retirement. These current bills will be extremely harmful to those who live in the suburbs and small towns.
Similarly, the removal of the state and local tax deduction is a de facto tax increase for tens of millions of Americans. The argument that other states should not subsidize big government states is a complete red herring.
For example, our state, New York, sends much more money to Washington than it receives back. In other words, states like New York, New Jersey and California are subsidizing other states, allowing them to lower state and local taxes or have none at all.
If we eliminate state and local taxes, then a comparable law should be enacted that all 50 states pay the federal government the same amount of money.
How is it fair that big corporations keep these deductions, but individuals do not?
Eliminating these deductions while maintaining the current carried-interest rule that benefits Wall Street shows the complete disparity of the plans.
You ran for president – and won – on eliminating the carried-interest rule. These plans do not eliminate it. You did not run or win on eliminating property tax, mortgage, interest and state and local tax deductions.
Some wealthy individuals argue that they are not opposed to dropping these deductions. Of course they wouldn’t be opposed to it. Why would they when many of them use the carried-interest rule and other pass-through devices to pay tax rates which are substantially below the 39.5 percent rate their level of income would normally be taxed?
That is why Warren Buffet pays a lower tax rate than his secretary. This, Mr. President, is not fair.
If we want to raise revenue, pay for tax cuts and control the deficit, then all income should be taxed at the same rates. It cannot be reclassified as profits or distributions.
This is a giant loophole that needs to be closed so that it will not permit some of the nation’s wealthiest taxpayers to pay a rate below what their income requires and in effect brings them below this plans lowest rate of 12 percent.
Mr. President, this is not what you campaigned for on or intended.
Moreover, this is where the real significant money is. If these wealthy individuals’ income is not reclassified as profits or distributions, but is taxed similar to individuals who report their income as such, these funds can provide real relief by extending real tax cuts to all.
Yet this legislation does not accomplish this; rather, it forfeits these funds.
As a dealmaker, you understand sometimes no deal is better than a bad deal. As constituted, the present proposed legislation is a bad deal.
Respectfully, please step back, reconsider and renegotiate.
You may think the present deal is a win because something (anything) will get passed and be chalked up as an accomplishment for your administration. Nothing can be further from the truth.
Very shortly after this legislation takes effect it will be revealed that the so-called win will turn into a loss for both you and American taxpayers.
The corporate tax cut works, this does not.
You were elected by people who work hard, pay their mortgages, interest and property tax, not the special interests who benefit most under this plan. A tax cut should help all.
This, Mr. President, is a swamp deal.
Randy Levine is President of the New York Yankees. These opinions are his, not the Yankees.