The GOP tax plan is a middle finger to everyone but the rich

Nobody should have any illusions about what Republicans are trying to accomplish

Published December 2, 2017 5:58AM (EST)

Donald Trump; Mitch McConnell   (Getty/Mark Wilson/Drew Angerer)
Donald Trump; Mitch McConnell (Getty/Mark Wilson/Drew Angerer)

This article originally appeared on AlterNet.


Forget campaign promises and White House propaganda about prosperity via tax cuts. The GOP is poised to show every American who isn’t wealthy that it couldn’t care less about their daily economic struggles.

That message comes in the $1.5 trillion tax bill that is on the verge of Senate passage, following a slightly different version the House passed a few weeks ago. Fiscally, the legislation gives temporary minimal tax cuts to the middle-class — on the order of 1 percent or so — while giving increasingly larger and permanent cuts to corporations and wealthy Americans, whose financial portfolios are not commonplace.

“One way or another, the bill would hurt most Americans,” economist Paul Krugman wrote Tuesday in the New York Times. “The core of the bill is a huge redistribution of income from lower- and middle-income families to corporations and business owners. Corporate tax rates go down sharply, while ordinary families are nickel-and-dimed by a series of tax changes, no one of which is that big a deal in itself, but which add up to significant tax increases on almost two-thirds of middle-class taxpayers.”

The bill, like any hyper-partisan legislation, is also filled with giveaways that have nothing to do with tax policy, but are intended to placate extreme right-wing flanks, such as letting non-profit religious institutions spend money in electoral politics (forget the constitutional separation of church and state) and creating fetal personhood rights (which abortion opponents have long sought but failed to pass in the states).

The tax bill is also unrepentantly punitive. The bill takes aim at blue-state revenues by ending the federal tax deduction for state and local income taxes. That will hurt high-tax states like California, New York, New Jersey and Illinois by raising taxes on their residents. That, in turn, puts new pressure on those states to cut existing public programs, from schools and public safety to social welfare and transportation. These blue states, unlike much of red-state America, have legislatures that decided to support this societal spending.

“Elements in both the House and Senate bills could constrain the ability of states and local governments to levy their own taxes, pressuring them to limit spending,” Peter S. Goodman and Patricia Cohen wrote in a Times analysis. “The result is a behemoth piece of legislation that could widen American economic inequality while diminishing the power of local communities to marshal relief for vulnerable people — especially in high-tax states… which, not coincidentally, tend to vote Democratic.”

The bill attacks blue-state values with exceptionally mean-spirited provisions, such as barring Californians who lost their homes in recent wildfires from deducting losses, while preserving deductions for hurricane damage in red states; ending deductions for public school teachers to buy school supplies; ending the higher education deduction for interest on student loans, but newly taxing graduate student tuition grants.

Those features are disturbing enough, but it doesn’t stop there. The Senate legislation continues the GOP effort to dismantle healthcare safety nets in various ways. First, it would end the Obamacare requirement that adults have insurance by lifting the penalty for not having coverage. Congressional analysts predicted that would prompt 13 million people to drop their health plans, which would drive up annual premiums by 10 percent a year into the foreseeable future as the risk pool shrinks.

That’s not all. There are federal laws in place that would trigger more than $400 billion in across-the-board cuts over the next decade to Medicare, the national health program for seniors, because the bill’s giveaways would create more federal red ink. As Sen. Bernie Sanders, I-VT, noted Thursday, the tax plan has to be seen in tandem with the House-passed budget, which envisions $1 trillion in spending cuts over the next decade for Medicaid, the state-run program for the poor, including seniors in nursing homes.

“In order to give huge tax breaks to billionaires and large corporations, the Republican budget also makes enormous cuts to education, nutrition, affordable housing, and transportation — and will crush college students and college graduates struggling with debt,” Sanders said. “In short: This budget will do incalculable harm to tens of millions of working families, women, kids, the sick, the elderly, and the poor. We have to fight this budget and stop it.”

“Now let’s talk about who this bill helps,” said Sen. Kamala Harris, D-CA, at the Senate Budget Committee hearing this week — where the GOP allotted 15 minutes for debate. “If your estate is worth more than $5.5 million, under this tax plan you’d pay a lot less taxes on that estate. If you’re the top 0.1 percent of Americans, you’d get almost $100,000 in tax cuts per year. If you run a corporation, this plan permanently cuts corporate tax rates from 35 percent to 20 percent. Even though corporate profits have gone up while wages for working Americans stagnated.”

Nobody should have any illusions about what the GOP’s goals are and how they are going about it. As many analysts have noted, the tax bill is a giant giveaway to the richest in America who are already doing just fine. But as Krugman pointed out, the plundering of middle-class wealth is an intentional slow-motion tightening of fiscal pressures over the next decade, in which no one provision jumps out but the totality hurts most Americans.

That kind of strategic targeting is the GOP’s specialty. You see it in voter suppression tactics, where wide aim is taken via a catalogue of restrictive devices that collectively benefit their side. And now you see it in the latest House and Senate tax bills, where again, the fine print further transfers American wealth upward while dismantling public institutions designed to help average wage earners and the vulnerable.

“The trickle-down story has yet to achieve its promised happy ending,” Goodman and Cohen’s Times analysis said. “Only the beginning reliably transpires, the part where wealthy people get relief. The spoils of resulting economic growth have largely been monopolized by those with the highest incomes. Pay for most American workers has been stagnant since the mid-1970s, after the rising costs of housing, health care and other basics are factored in. Nonetheless, Republicans are staging a trickle-down revival.”

By Steve Rosenfeld

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