If you believe the business of America is business, you’re going to love the Republican tax plan that passed the Senate in the wee hours of Saturday morning.
If you believe the business of America is business, you’re going to love the Republican tax plan that passed the Senate in the wee hours of Saturday morning.
You’ll love it even more if you’re one of the poobahs running one of those big businesses – or at least a wealthy American.
They are the ones who stand to gain the most under this plan.
Don’t get us wrong. Does this plan offer a tax break to most middle-class Americans? Yes, it likely will.
But those benefits pale next to the huge benefits showered on the nation’s business elite.
For starters, both the Senate plan as well as that passed by the House will roll back the corporate tax rate from 35 percent to 20 percent. Most experts believe this is not a bad thing, that the corporate tax rate is too high, providing a competitive barrier to U. S. business.
But the trickle-down theory, the notion that businesses will take all this newfound money and invest it in new plants – and jobs – has been trotted out before. It hasn’t worked.
This plan amounts to a $2 trillion tax break for American’s corporate fatcats. Working stiffs, those making $75,000 a year or less, would see less benefit and – incredibly – in some instances could see their tax bill go up by 2027.
This isn’t the only plum for the nation’s ruling class. The Senate plan also repeals the alternative tax and the estate tax, a huge gift to the nation’s wealthiest taxpayers.
The rich get a feast, while those less well off have to settle for the crumbs. And even those come with strings attached.
In exchange for a lower tax rate, they face the possibility of losing crucial benefits they now have, including itemized deductions, the deduction for interest on home mortgages, and the allowance for state and local income tax.
Just to add a cherry on top of this concoction for the richest Americans, under the Senate plan their benefits are permanent, while the benefits for those less well off would have to be reauthorized by Congress or expire by 2025. Anyone real confident that will happen? Does that sound fair to you?
That’s one of the reasons it is drawing opposition from high-tax states such as those in the Northeast.
Then there is health care. The Senate plan would repeal the requirement under the Affordable Care Act mandating every resident have health insurance. The result? Eliminating the fines likely means a lot fewer people will actually sign up. With fewer people paying into the pool, fewer people would obtain federally subsidized health policies. How many? The nonpartisan Congressional Budget Office estimates 13 million Americans could loses their health coverage. Thankfully, the plan passed by the House does not change health care at all.
Finally, there is the deficit. Remember when this used to be a big concern for Republicans?
Back when he first ran for the Senate, Pennsylvania Republican Pat Toomey was known as a fiscal hawk. And he would talk non-stop about the deficit, warning that if it was not corralled it would imperil the entire economy.
Apparently times have changed. Most experts say the one thing this tax plan is certain to do is explode the national deficit, perhaps to an astounding $1 trillion in five years.
Of course, Republicans believe the growth spurred on by the tax cuts will alleviate the ballooning deficit numbers. There was a time when Republicans used to call this kind of stuff smoke and mirrors.
There is something else Republicans have groused about for years. They were always the first to yell foul when they believed legislation was being jammed down their throat without the proper debate and review. That’s something else that seems to have fallen out of fashion.
The last time the tax code was targeted for this kind of seismic change – under the Reagan administration – the exhaustive process was carried out over more than two years, accompanied by dozens of public hearings. A host of fiscal experts and economists was part of the mix.
This time around, delirious in their zeal to deliver any kind of legislative win for President Trump, the process has been fast-tracked, heading to a showdown vote in a matter of weeks.
Everyone agrees on the need for tax reform. But this plan, and its push to stimulate the economy, comes at a time when that kind of spark isn’t really needed. Wall Street is at record highs. The jobs numbers are outstanding.
What Republicans have presented is a huge holiday giveaway to the nation’s richest, while tossing a few morsels to those in the middle who increasingly shoulder a larger portion of the load.
The huge giveaway to business interests is not likely to “trickle down” to workers. Instead it is more likely to “trickle down” to a fatter bottom line and into the pockets of investors.
The Senate and House now will sit down and hammer out a final plan. Don’t look for it to change much.
America needs tax reform. It needs a just, fair plan that helps the economy, boosts the middle class, and does not drastically tilt the playing field toward those who need it the least.
Clearly, these Republican plans are not it.
