Slate - "Donald Trumps Tax Plan Would Turn the Whole U.S. Into Kansas"

by Jordan Weissman

http://www.slate.com/blogs/moneybox/2017/04/26/donald_trump_s_tax_plan_would_turn_the_whole_u_s_into_kansas.html

It is hard to think of a more obvious recent public-policy failure than the tax cuts that Kansas Gov. Sam Brownback championed in 2012. The state has been mired in a perpetual budget crisis ever since the package passed, forcing its residents to swallow painful spending cuts in essential areas like education. Kansas' credit rating has been downgraded, as well. The financial wreckage has been so severe that Brownback's fellow Republicans are now staging a rebellion; in February, the GOP–run legislature voted to undo the cuts, and came close to overruling the governor's veto.

Somehow, the sharpest minds in the Trump administration have gazed upon the smoldering ashes of this misbegotten experiment and decided that they should imitate it. On Wednesday, Treasury Secretary Steve Mnuchin and National Economic Council Director Gary Cohn unveiled the skimpy outline of the White House's current tax plan. While the one-page document lacked much in the way of detail, it confirmed that the president wanted to cut the tax rate on so-called “pass-through” businesses to 15 percent—which would amount to a bigger, potentially more disastrous version of Brownback's ill-fated cuts.

“This would be Kansas on steroids,” Eric Toder, co-director of the Tax Policy Center, told me.

Pass-through entities are by far the most common type of business in the U.S., encompassing about 94 percent of firms as of 2011. Instead of paying corporate taxes, they simply distribute profits among their owners, who then have those profits taxed as normal income. Obviously, many small businesses are organized this way, but so are major law firms, hedge funds, real estate developers, and plenty of other extremely profitable enterprises. The Trump Organization? It's a pass-through.

snip - lots more to read (and weep about)