Women earn less than men. They have less wealth. Thus, in a marital relationship, they will most often be the economically weaker party.
Currently, the tax code allows alimony payments to be deducted from income by the payor per IRC § 215, with the payments to be included into income by the recipient per IRC § 61(a)(8). The GOP tax bill repeals these two provisions. The practical effect of the proposed change will be to financially disadvantage the economically weaker party in a divorce.
(I’ve posted the entire bill here. The alimony rules are changed via Section 1309 of the bill which begins at page 122 of the pdf version.)
The reason is really quite simple. The current statutory arrangement encourages the more financially well-off party to pay alimony since it confers a net benefit on the recipient that is, after tax, greater than the after-tax cost for the payor. Simply put, the payment of alimony, which generally flows to the wife in a divorce, will become more expensive.
On a tax lawyer listserve, a conservative colleague of mine commented about this provision: “The loss to the payor will be much bigger than the gain to the payee, and this loss will be incurred at exactly the moment when the former husband and wife are most economically fragile. This is such awful public policy that it is hard to believe that the people who proposed it understand the consequences of what they propose.â€
I agree with the first sentence, but not the second. The entire purpose behind the proposed change is simple: raise taxes on individuals wherever possible in order to accommodate corporate tax cuts, overarching public policy be damned. The public policy is awful. But the people behind the public policy fully understand its consequences. They simply don’t care. They’re awful.
As far as I can tell, this is the story on a range of deductions. What would the good faith argument for this be, aside from a faith in trickle-down economics so strong that it would justify increasing effective taxes on all manner of others in order to inflate the coffers of the "job creators"? Or is there a less crazy argument than that?
Eventually, the GOP will come clean. "We've run the numbers, and we just can't afford a middle-class tax cut. Not if we want to get rid of the estate tax for the Trump spawn, or reduce the taxes the Trump and the Trump Organization(?) pays. Now, we know that you'll be happy to see liberals gnash their teeth at further enrichment of the Trump family, and you'd probably be satisfied with that. But, because we care, we've come up with a bunch of provisions that hurt people you hate. They don't cost much money, but it's the principle of the thing.
Loser spouses who get divorced because they won't stand by as their man gets a little strange on the side or fondles the help? They get a deduction now, for Pete's sake, but not any more. Did you know schoolteachers - ugh! - get a deduction for buying school supplies for poor students who can't afford them (UHG!)? Sayonara, senorita! What about people who don't have health insurance? They can deduct medical expenses, if you can believe it. Not any more moocher! That's two billion we need to give the Trumps - you wouldn't expect us to limit the multi-billion deduction for employer-provided health insurance, would you? The Trumps use that deduction!
What about do-gooders who adopt babies that people who can't afford them should be forced to raise themselves? Or even worse, come from terrorist countries just waiting to plow into a crowd? Forget about it, ticking timebomb baby! Don't you hate it when people who think global warming is a thing get flooded out of their hovels by a disaster and then come around mooching off of us? That nefarious deduction is gone, baby, gone. Like their loser "houses." Electric cars and renewable energy? You're kidding right? No, but not any more, air-breather. (If we can talk the Trumps into it, we will allow a deduction for people who modify their vehicles to "roll coal," but they're not sure they could spare the money, even for a worthy cause.)
Did you know that if you move away from, say, Appalachia, looking for a job that won't give you lung disease, or just any job at all, you can deduct moving expenses? What kind of a crook deal rewards Benedict Arnolds who abandon their heritage looking for greener (ugh!) pastures? A crook deal that's going in the coal ash heap of history, that's what.
With all these goodies, you should be paying us. Search for MAGA merch and wear it proudly. The snowflakes will scream bloody murder. http://www.latimes.com/business/hiltzik/la-fi-hil…