Hours before Republicans are expected to release the final version of their tax bill, a new video illustrates how the plan “is a perfect demonstration of how the wealthy use their power to bend the rules in their favor.”
The video, released by NowThis, features Eric Schoenberg, a millionaire who—unlike President Donald Trump—has released his tax returns, and uses them to give a crystal-clear look at how the proposal will benefit the super rich like himself and the president.
Watch the full video below:
Schoenberg, a member of the Patriotic Millionaires, a wealthy group that advocates for policies that would foster greater equality, says that “the Republican plan will make the rich richer and leave everybody else to pick up the bill” and goes on to show exactly how.
He does this by showing parts of his 2015 tax return, a year for which he and his wife had an adjusted gross income of $1.3 million on which they paid $325,000 in income tax—just under 25 percent.
Yes, this rate is low, Schoenberg says, because the system is already set up “in favor of rich people by taxing investment income at lower rates than labor income.” For low- and middle-income taxpayers, that labor income—in other words wages and salaries—is the bulk of their income. Yet that line on the return for Schoenberg and his wife shows around $35,000—a small fraction of their overall income.
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The problem, as he explains, is that “salaries and wages face a top income tax rate of about 40 percent but dividend and capital gains face a top rate of only 24 percent.”
“That means,” he continues, “that a lawyer or athlete who had a salary that matched my [labor] income in 2015 and had the exact same level of deductions would have paid almost $40,000 more in tax than I did. For two people with the exact same income, the person who is already rich pays less tax than the one who isn’t.”
The plan is “just a big tax cut for rich people like me.”As bad as the existing tax system is for rewarding the rich, the current plan under consideration in Congress would exacerbate the problem, he said, “by also lowering the rate on ‘pass-through’ business income.” (That’s business income “passed through” to owners and taxed at the lower individual rate.) For Schoenberg and his wife, that amount in 2015 was nearly $705,000.
In contrast to the Republicans’ framing of the proposal as being a benefit for the middle class, he says, “I estimate that our tax bill would have been over $100,000 less under their plan, saving over 30 percent of my taxes. Imagine the billions this will save the Koch Brothers. Or Treasury Secretary Steven Mnuchin. Or Donald Trump.”
He also calls the so-called “tax reform” Trump’s “greatest ever con”—an assertion that could be put to rest by Trump releasing his tax returns.
Simply put, Schoenberg says, the plan is “just a big tax cut for rich people like me.”