Monday, July 31, 2017
TAX REFORM MY ASS RANT
The Republican effort to deprive 20 million Americans of health care having failed, the Grand Old Party is turning to what they’ve decided to call Tax Reform. I use caps here only to draw the reader’s attention to the basic fraud. Republicans are actually proposing enormous tax cuts that will, inevitably, accrue to the richest and most powerful American families.
So, what would these tax cuts look like? At present, the various proposals are sketchy, but they include some common elements.
The corporate tax rate would be reduced from 35% to 20% (congressional plan) or 15% (Trump plan).
The estate tax, only applicable to individuals with estates above 5.45 million dollars, less than 1% of all estates, would be eliminated.
The alternative minimum tax, applicable only to those with so many deductions, through so many loopholes, they would otherwise pay little or no taxes, would be repealed.
Taxes on business conducted overseas by American companies would be reduced to zero.
The current high-end tax on income, now 39.5%, would drop to 33%.
Rather than cite estimates of who gets the dough, I invite readers to re-scan the above items while asking themselves a simple question: Does this benefit me? If you answer in the negative, don’t fret. There’s a bone for the doggy. Standard deductions for individuals and married couples will double. That accounts for about 3% of the total. As for the rest? Hey, Bill Gates hasn’t had a tax cut in years. Give the poor guy a break.
How to pay for this, or at least pay for enough to cover the bill’s private parts with a fig leaf? Well, the original plan called for the money saved by repealing the ACA - a claimed 250 billion through tax cuts and reduced Medicaid spending over ten years – to be applied to the Republican tax plan. That’s out the window now, which reduces Republican options to exactly one. Slash spending. Thus, Trump’s proposed budget includes savage cuts – ten-year cuts - to social spending programs.
Medicaid and children’s health programs: 616 billion.
Food stamps and block grants designated for needy families: 272 billion.
Disability: 72 billion
Federal employee retirement benefits: 63 billion
Financial regulation (by changes to Dodd-Frank): 35 billion
Aid to education: 9.2 billion
Once again, I invite readers to examine the above list. How many of these items are likely to affect you or someone you know? How many on the first list? Who wins? Who loses?
One final note. Trump’s tax cuts will add 7 trillion dollars to the deficit over the next decade, even with the budget cuts, most of which he won’t get. That’s 700 billion per year, considerably more than 100% of our current deficit. But have no fear. According to our leader, Don the Con, we can deduct 2 trillion from the bottom line because an inspired growth fairy will show up to expand the economy. This is the same growth fairy conjured up by Ronald Reagan, George H. Bush and George W. Bush. All three invoked the growth fairy’s holy name again and again, but she never responded and deficits ballooned, a fact that can be verified by a one-minute search for “federal deficit spending in constant dollars”.
It’s sad, taken all in all, but the saddest part is still to be named. The deficits produced by the long-planned Republican tax cuts will, of course, add to the national debt, providing Republicans with cover when they propose ever more savage cuts to social spending. Before we go over that pesky fiscal cliff.