Republicans in both the House and Senate are working as fast as they can to pass a tax law overhaul. The House version will likely pass if the party leadership can slip some anti-anxiety drugs into the drinking water for GOP deficit hawks. The real battle will be–as it was with TrumpCare–in the U.S. Senate.
Despite promises to have all the pieces for some version of this legislation ready for the President to sign by the end of the year, chances of it happening are mighty slim.
It will take fifty Senators, plus the tiebreaker from Vice President Pence to pass whatever emerges from the House-Senate reconciliation process, a process that will be considerably harder if the Republican candidate for U.S. Senate from Alabama, Roy Moore, loses in the December 12 special election.
Moore, as you may have heard, is in trouble following multiple reports about his pursuit of seriously younger women and sexual assaults. These allegations are not anonymous and are supported by dozens of people willing to corroborate the statements being made by five (the number will increase) women.
Anonymous sources have told the New Yorker Magazine even more horrid stories, now backed by reporting in Alabama newspapers about Roy Moore’s predatory behavior at a local mall in the same time frame as referenced by his public accusers.
Moore’s supporters have mounted a furious defense, saying the charges aren’t true, news reports are politically motivated, and this is a spiritual battle between good and evil.
The scandal has split the Republican party. If Moore gets out of the Senate race or –gasp!– loses to a Democrat, his supporters are likely to blame the Republican establishment. A win by Moore will add to the damage already incurred to the GOP brand in areas not dominated by white evangelical voters.
I’m assuming Moore will eventually back down, and the GOP will come up with another strategy to keep the seat out of Democratic hands. Whatever happens, it will be messy.
Here’s Carolyn Lochhead at the San Francisco Chronicle
Republicans are hoping to pass combined House and Senate tax legislation by year’s end and send it to Trump to sign.
Sen. Lindsey Graham, R-S.C., said that if Republicans fail to do so, “The party fractures, most incumbents in 2018 will get a severe primary challenge, a lot of them will probably lose, the base will fracture, the financial contributions will stop, other than that it’ll be fine.”
Caught in the crossfire are the wealthy backers of the GOP’s tax scheme, who’ve made it clear that passage is a condition of further financial backing.
Meanwhile, the various versions of the tax bill surfacing have something for just everybody to hate. Republicans have reacted to critiques by –mostly– lying.
Catherine Rampell at the Washington Post does a good job of exposing those falsehoods, which include:
- The tax cuts will pay for themselves.
- The tax plan primarily helps the middle class.
- The bill will hurt President Trump.
- This will be the biggest tax cut in history.
- The economy desperately needs a big tax cut.
And the biggest lies of all concern wages and job creation. Here’s Steven Greenhouse from a Guardian op-ed:
There’s a lively debate about the $2tn in planned corporate tax cuts, with many conservatives maintaining that most of that money will go to workers’ wages. The stock market evidently disagrees. Would investors bid up stock prices so much if they expected lower corporate taxes to translate into tons of money for increased wages. No, investors expect those cuts to mean higher profits and dividends. Corporate America’s profits have been at or near record levels in recent years, but wages have remained largely stagnant, with the labor share of national income falling to record lows.
It’s a total mystery – and defies logic – why cutting the corporate income tax would make profit-maximizing companies suddenly change course and share far more of their profits with workers in the form of wage increases.
President Trump has promised that cutting corporate income taxes will fuel job creation. Cutting corporate taxes should spur at least some increased investment in the US, but let’s not forget that American corporations have been sitting on $2tn in cash for years, and have seemed far more interested in investing in lower-wage countries overseas than in the US. Let’s be frank, these corporate tax cuts are likely to prove a windfall for shareholders while producing merely marginal gains for wages and jobs.
What we do know –from the general framework of GOP proposals– is:
- Californians, who already pay more in taxes than they received in federal support, will be hit hard, as will Blue states in general. This is partisan warfare at its finest.
- Health care out-of-pocket expenses will be eliminated as a tax deduction. And when Republicans get through slashing taxes, it is inevitable that ‘entitlements’ like Medicare and Social Security will face cuts above and beyond those already proposed in the GOP budget.
- Students lose help paying off their loans. Teachers can’t deduct the cost of buying classroom supplies. Grad students get taxed on their scholarships. Again, GOP budget includes massive cuts to funding for Head Start, Pell Grants & everything in between.
- Tax breaks for oil, gas, and coal companies remain but are eliminated or reduced for solar & wind. The GOP budget slashes funding for the Environmental Protection Agency.
- Basic services on the local level will be cut, including firefighters, schools, roads, and libraries, either through the elimination of the deduction for local taxes or reductions in spending dictated by reduced revenues.
The bottom line. No matter how you slice it, you will pay more, either through higher taxes (by 2026) or fewer public services (or both). Millionaires and corporations will pay a lot less.
In California, 54% of tax cuts to will go to millionaires even though they only make up 0.6 % of the population—an average tax cut of $192,000 per millionaire or 5.4% of their income. Meanwhile, the 38.3% of Californians making less than $45,000 would only get 3.8% of the total tax cut—an average of $230 per person or 0.9 % of their income.
The House is voting on this plan this week. Use this widget to automatically dial your CongressCritter.
Don’t know what to say? Here ya go:
“Hi, I’m [name], calling from [zip code] to urge [Member of Congress] to vote NO on the tax bill. It’s fiscally irresponsible & raises taxes on millions of middle class families to cut taxes corporations. Thank you!”
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