While there are convincing arguments being made about how the GOP’s Tax Cuts and Jobs Act favors the rich and disses the poor, the real danger in this legislation lies in its underlying social engineering.
Forget about next year’s tax bill for a moment; this bill amounts to an assault on the aspirations and beliefs of most Americans.
The rich getting richer has broader implications. Our democracy is already in trouble, thanks to the Citizen’s United Supreme Court decision. A small group of donors has become kingmakers, whose wealth drowns out other voices and induces politicians to live in a fundraising silo.
The bill’s language on education savings accounts codifies recognition of the unborn. This provision strengthens the argument that unborn children should be treated as people and given equal protection under the law — a key element in their battle to overturn or nullify the Supreme Court’s 1973 Roe v. Wade decision that guaranteed a woman’s right to choose.
Churches will no longer have to abide by the Johnson Amendment, which limited political activity by organizations with tax-exempt status. This chips away at the already vanishing separation of church and state, in violation of the Founders explicit intentions.
The immigrant parents of three million children (80% of whom were born in the United States) will no longer be able to benefit from the refundable child tax credit. It’s an article of faith among nativists that tax credit refunds have been a source of fraud and abuse with “illegals.”
A single parent raising two children making minimum wage would be left out of the Child Tax Credit as it becomes non-refundable for families with incomes too low to have federal income tax liability.
The proposal eliminates the adoption tax credit, originally included as part of Republican Newt Gingrich’s 1994 “Contract With America” and signed into law as part of a broader package of reforms by President Bill Clinton. The credit helps families adopting children subsidize costs for agency and attorney fees, travel, and post-adoption services, such as retrofitting a home for a child with special needs.
Another provision fitting into the “pro-family” construct is a tax penalty for divorce. The current scheme of alimony being tax-deductible for the paying spouse and taxable to the receiving spouse would change. Alimony would be paid out of after-tax dollars and would be tax-free to the recipient, resulting in an increase the total amount of tax paid by divorced couples.
If you’ve been paying attention to the utterances of top Republicans, it should be no surprise to learn the act amounts to a frontal assault on higher education.
By eliminating deductions for interest on student loans and employer-provided tuition reimbursement, the bill would increase the cost to students of attending college by more than $65 billion between 2018 and 2027, according to the American Council on Education.
The tuition waivers many graduate students receive when they work as teaching assistants or researchers would be eliminated, meaning a PhD would not be a viable choice anymore, except for the independently wealthy, according to Claus Wilke at the University of Texas.
The GOP plan would also result in fewer people itemizing their deductions for charitable gifts. Higher-education experts warn this change could lead to a steep decline in donations to colleges.
Although Republicans have avoided touching the individual mandate in the initial legislation because they didn’t want to dredge up the debates that killed the Obamacare repeal effort, the President’s desires and the need to find more offsets for corporate tax cuts, make this a likely addition to the bill as it proceeds through the House of Representatives this week.
Eliminating the individual mandate would produce savings resulting from about 15 million fewer people signing up for Medicaid or subsidized health insurance under Obamacare, freeing the federal government from paying for that coverage.
Then there is the Blue State penalty, primarily aimed at states carried by Hillary Clinton in the last election. The Trump/GOP plan proposes to eliminate the federal income-tax deduction for state and local taxes (SALT).
As Brett Arends (who generally favors a corporate tax cut) at Market Watch points out:
Republican propagandists are out there right now saying this will end the system whereby supposedly virtuous low-tax (red) states subsidize feckless, socialist (nay, “socialistic,” or even,”socialistical”) high-tax blue states.
It is an undisputed fact that the subsidies flow in exactly the other direction. States like New York, New Jersey, Massachusetts and California pour vastly — vastly — more into the federal government in taxes than they ever get back in federal spending.
So the Republicans are simultaneously freeing up right-wing political churches and raising taxes on more liberal, blue-state colleges. This makes perfect sense if you remember a key determinant of how someone voted last year was whether they went to college or not. Trump absolutely meant it when he said early last year: “We love the poorly educated.”
I’m sure there’s more I’ve missed, but I’ll end with the elimination of the so-called “death tax.”
If Trump succeeds in making America great again, a dollar earned will be taxed far more heavily than a dollar inherited. Welcome to the Middle Ages, without the inbreeding that weakened the intellectual abilities of royalty over the decades.
Here’s Warren Buffett, quoted from an interview on CNBC, on the elimination of the estate tax:
“If they pass the bill they’re talking about, I could leave $75 billion to a bunch of children and grandchildren and great-grandchildren. And if I left it to 35 of them, they’d each have a couple billion dollars,” Buffett said. He then asked rhetorically, “Is that a great way to allocate resources in the United States?”
Using a sports metaphor to argue against that kind of dynasty building, Buffett said, “I don’t think we should have our ‘Olympic team’ 20 years from now be the eldest sons of the ‘Olympic team’ currently.”
“The wealthy now are so much wealthier than they were 25 years ago,” he said. “We’re talking about the 400 [richest] now having $2.4 trillion … 25 times as much money.”
Notice I haven’t even covered whether or not your taxes will go up or down.
Briefly, most of the numbers being cited by partisans fail to take into account the ten-year lifespan of the program. And the GOP’s claims about an expanding economy are laughable.
Initial incremental decreases in taxes for the non-wealthy will mostly disappear by 2027. Corporations and the very wealthy will keep their gains, even as ballooning deficits force cuts in education, social services, research, and healthcare.
Seventy-three percent of Americans and 53 percent of Republicans say they want corporate taxes either kept the same or raised, according to Pew Research Center polling.
Obviously, this bill has little to nothing to do with what people actually want.
The Tax Cuts and Jobs Act is a shit sandwich, with greed and hate between slices of empty promises.
Because that’s how Republicans roll these days.
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