On MSNBC, an economist explains how GOP tax bill benefits real estate investors at the expense of the middle class
Jared Bernstein: "A 'yes' vote for this bill today is a vote for higher inequality. It's that simple."
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From the December 19 edition of MSNBC's Live with Ali Velshi and Stephanie Ruhle:
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STEPHANIE RUHLE (CO-HOST): Utah Sen. Orrin Hatch [(R-UT)], who chairs the Senate Finance Committee, added a new provision to the tax bill at the last minute. And that's what we want to get into. This new language gives a boost to pass-through entities. What is that? It's a provision that the International Business Times found would benefit more than a dozen Republican senators. Six of those senators including Orrin Hatch himself earn between $15,000 and $80,000 on real estate partnerships. Hatch himself owns real estate holdings that are worth up to half-a-million dollars. Another five senators earn more than $100,000. Wisconsin's [Sen.] Ron Johnson [(R-WI)] and Tennessee's [Sen.] Lamar Alexander [(R-TN)] top off with a million dollars in earnings on their multi-million-dollar holdings.
But the real high-end in Congress are Montana's [Sen.] Steve Danes [(R-MT)] and Tennessee's [Sen.] Bob Corker [(R-TN)]. Corker earns up to $7 million on his property which is worth up to $35 million. The new, very last-minute language on pass-through business -- now nicknamed "the Corker kickback" -- gives these senators and President Trump, who is a massive real estate investor as is his son-in-law and senior adviser Jared Kushner, a bigger break than the version passed by [the] Senate. All while more than half of Americans are set to see a tax increase in 2027 when the individual tax cuts expire. Those corporate and pass-through rates, they're here forever.
ALI VELSHI (CO-HOST) Now, a short time ago, [Speaker of the House] Paul Ryan [(R-WI)] addressed the economic situation a lot of Americans find themselves in while trying to sell the GOP tax bill ahead of today's vote.
But the one thing that hasn't been addressed in the tax plan is income inequality. The president ran on promises of not cutting taxes for the rich and making Wall Street pay more.
RUHLE: But the House is getting ready to pass that bill as we keep telling you, keeps things like carried interest, it eases the tax burden on wealthy senators. And we're trying to dig into why that is.
VELSHI: Joining us now is a senior fellow at the Center on Budget and Policy Priorities, Jared Bernstein. He's a former chief economist and economic policy adviser to Vice President Joe Biden and an MSNBC contributor. Jared, I was telling Stephanie yesterday afternoon I had Gene Sperling on the show. And I was sort of trying to get at the fact that Gene Sperling had been one of those people in the Obama and the Clinton administrations who felt that corporate taxes could be lower -- And that there's a way to make all this math work in a way that doesn't empty out government coffers, doesn't increase the debt and doesn't do it on the backs of working Americans. This just seems like a badly concocted -- this is like the wildebeest of legislation. You know, they put so many little parts together on it that the whole doesn't really constitute a real animal.
JARED BERNSTEIN: Let me be very clear. You guys have done a tremendously deep dive into this today, and it's been very helpful with all the numbers, the 83 percent going to the top 1 percent by the time the thing is fully fazed in. Some of the complications around the benefits of real estate trusts. Let me break this down to its most simple component. A "yes" vote for this bill today is a vote for higher inequality. It's that simple.
Why is that the case? Because especially once it's fully fazed in, this bill massively favors asset-based income over earnings. It's exactly the opposite of what Paul Ryan was just talking about with paychecks. In fact, by the time it fazes in, it actually dings a significant share of paycheck owners. Now, how does it raise inequality? By favoring the assets of inheritors, the heirs of wealthy estates and we know who some of them are. By favoring investors in trusts, like real estate trusts. By favoring shareholders with the corporate tax cut. By significantly increasing the deduction for the estate tax. This is a wrapped up gift to the wealthy at the expense of the middle class. Especially once it's fully fazed in. It would have been really very simple to write a very different kind of plan. But that wasn't what they set out to do.