How far can the one percent push the 99% before there's an appropriate reaction? I guess the election of Trump in 2016 was a kind of reaction, albeit not an appropriate one. An appropriate one would have been electing Bernie... but the Democratic Party had tighter controls on that kind of thing than the GOP did. Would guillotine the entire one percent be an appropriate reaction? Don't worry; that's a bridge that no one will ever be asked to cross, not in this country. I have a sickening feeling there is no push that's too far, short of, maybe, aristocrats eating everyone's children.
Look at this pretty blue graphic; the point is that the pandemic relief package does more than just mandate lousy one-time $600 checks for everyone who makes under $75,000 annually. The graphic shows 8 worthwhile expenditures that impact real people in real ways, from free vaccinations to unemployment subsidies and rental assistance. And beyond.
But... at what cost? The NY Times went into that yesterday with a report by Luke Broadwater, Jesse Drucker and Rebecca Ruiz, Buried In Pandemic Aid Bill: Billions To Soothe The Richest. Because, of course, Congress sees the richest as having to be soothed, not taxed, let alone separated from their heads. On the House Democrats' Policy and Communications call I sat in on a few days ago, a journalist asked about AOC's complaint that congressional offices were given the 5,593-page bill just hours before the members had to vote on it. The excuses ranged from much of the content had been gone over in committee hearings and had benign the previously-passed legislation to the assertion that leadership had been briefing them on the contents all along. Really? Had they been briefed on the hundreds of billions of dollars going to "soothe" the one percent?
One provision, wrote our trio of reporters "involves the tens of thousands of businesses that received loans from the federal government this spring with the promise that the loans would be forgiven, tax free, if they agreed to keep employees on the payroll through the coronavirus pandemic. But for some businesses and their high-paid accountants, that was not enough. They went to Congress with another request: Not only should the forgiven loans not be taxed as income, but the expenditures used with those loans should be tax deductible. 'High-income business owners have had tax benefits and unprecedented government grants showered down upon them. And the scale is massive,' said Adam Looney, a fellow at the Brookings Institution and a former Treasury Department tax official in the Obama administration, who estimated that $120 billion of the $200 billion would flow to the top 1 percent of Americans. The new provision allows for a classic double dip into the Payroll Protection Program, as businesses get free money from the government, then get to deduct that largess from their taxes."
And that was just one example, "one of hundreds," according to The Times, [including] "much grumbling over other provisions that lawmakers had not fully reviewed, and a process that left most of them and the public in the dark until after the bill was passed. The anger was bipartisan.
[T]ax provisions-- including extending a $2.5 billion break for racecar tracks and allowing a $6.3 billion write-off for business meals, derided as the “three-martini lunch” expense-- have prompted the most hand-wringing.
The bill also would make permanent some lower tax rates levied on distillers, brewers and vintners.
No break is bigger, however, than the deductions that will soon be permitted under the Paycheck Protection Program. Businesses had been lobbying the Treasury Department and the I.R.S. since the spring to deduct spending from the program’s loans, but Treasury Secretary Steven Mnuchin was firmly opposed, saying deducting expenditures from funds not considered taxable income violated “Tax 101.”
The Paycheck Protection Program was the most visible part of the federal government’s coronavirus relief efforts in the spring to keep small businesses afloat. So far, the government has distributed more than $500 billion in loans, which could be forgiven and turned into permanent grants as long as the businesses use most of the money to pay workers and keep people employed.
In passing the law in the spring, Congress explicitly said that the Paycheck Protection Program funds should not be included as taxable income-- unlike, say, unemployment benefits.
Despite that largess, businesses wanted more. In May, the heads of the tax-writing committees-- Senator Chuck Grassley, Republican of Iowa, Senator Ron Wyden, Democrat of Oregon, and Representative Richard Neal, Democrat of Massachusetts-- wrote Mr. Mnuchin urging him to reconsider his opposition.
“Small businesses need help maintaining their cash flow, not more strains on it,” they wrote.
But a Brookings Institution analysis said the change would help far more wealthy than mom-and-pop business owners.
“So there’s no cost on the way in and no cost on the way out-- those two don’t add up,” said Richard Reinhold, the former chairman of the tax department at Willkie Farr & Gallagher and a professor at Cornell Law School. Congress could have simply expanded the program, but instead it did it almost by stealth, through a tax deduction.
“That’s the part that is troublesome,” he said.
Although there had been discussion of limiting the deduction to Paycheck Protection Program recipients below a certain income threshold, the final provision was made available to anyone, regardless of income.
The Small Business Administration this month released data showing that just 1 percent of the program’s 5.2 million borrowers had received more than a quarter of the $523 billion disbursed.
That 1 percent included high-priced law firms like Boies Schiller Flexner and the operator of New York’s biggest horse tracks, which received the maximum loan amount of $10 million.
“The year 2020 is going to be one of the most unequal years in modern history,” Mr. Looney said. “Part of the inequity is the effect of Covid, which hammered service sectors the most and allowed rich, educated people to work on Zoom. But the government totally compounded these inequities with their response.”
Yet in the end, only six senators, all Republicans, voted against the coronavirus relief package and spending bill, mostly citing fiscal concerns about runaway spending, while 85 House members-- a mix of Democrats and Republicans-- voted against its military provisions. The bill increased military spending by about $5 billion.