The fraudulent GOP tax scheme could sharply raise taxes on retirement savings, but leaves a ridiculous loophole for yacht-owning millionaires completely intact.
From the outset of the GOP’s farcical scheme to slash taxes on billionaires at the expense of working families, the Trump administration and congressional Republicans denied their plan benefitted the wealthy.
Treasury Secretary Steven Mnuchin promised that even though taxes would be cut “across the board,” they would eliminate so many loopholes and deductions that the rich would still pay about the same. He later admitted that the tax scheme would benefit the rich, but absurdly insisted it’s “very hard” not to give tax cuts to billionaires.
In reality, the “loopholes” on the Republican chopping block benefit the middle class, while some of our tax code’s most outrageous giveaways to the rich would be preserved.
According to the Wall Street Journal, Republican leaders in Congress are considering a plan to cap 401(k) contributions at $2,400 per year — any contributions above that level would be taxed. This would devastate the retirement plans of millions of working families. Even big banks are howling with outrage over this proposal, and Trump himself took to Twitter to deny the reports — although tax experts doubt he will keep his word.
The fact that taxing workers’ retirement savings is even on the table is especially galling when you consider one particular tax break Republicans are not eliminating: the tax break on yachts.
Due to a glaring loophole in the home mortgage interest deduction, it is legal for millionaires to write off their payments on a luxury yacht. While millions of working families do not even own a home, the ultra wealthy get to claim their boat as a house and reap hundreds of thousands of dollars in tax breaks.
The GOP tax scheme does absolutely nothing to fix this. In fact, their only proposed change would force the middle class to pay even more.
Republicans are flatly scamming the American people when they say their so-called “tax reform” proposal will benefit working people. They did not even try to make the math work for anyone who is not a millionaire.