Saturday, December 16, 2017
Don't Call It Tax Reform
Barring a last-minute miracle - zombie apocalypse, asteroid hitting the Gulf of Mexico, the mothership beaming up the entire city of Washington D.C. - the Republican tax scam will become law. You can forget about Bob Corker or Marco Rubio taking a stand. Corker sold out for nothing and Rubio managed to squeeze a few extra dollars of child tax credit that, when you factor in the new requirements for actually qualifying for it, still excludes up to 10 million children from getting it. Susan Collins and Jeff Flake both folded up like a used tent. So much for the "moderates" in the Senate. Well, at least his colleagues were spared the indignity of having to wheel in John McCain from his death bed to cast the deciding vote, so what's left of his reputation will still remain intact.
The GOP is calling this fiasco tax reform. It is anything but. What it is is nothing more than a gigantic Christmas gift for corporate America that millions of middle-class families and working poor will have to pay for in the form of higher taxes and reduced services. One of those reduced services will be affordable health insurance because the bill eliminates the individual mandate in the Affordable Care Act. Without it, rates will skyrocket and as many as 13 million people will lose coverage. Undaunted in their attempts to repeal the law outright, the GOP will instead direct their efforts at slowly crippling it.
While the bill does double the standard deduction on both single and married filers, it caps the amount you can deduct on state and local taxes and also reduces the amount of interest you can deduct. If you live in the Northeast (Maryland, Pennsylvania, New Jersey, New York, Connecticut, Rhode Island and Massachusetts) or the west coast (California, Oregon and Washington state) and you have a mortgage on a home, I would strongly suggest you go on Amazon and buy a lifetime supply of K-Y Jelly, because you're about to get fucked in the ass.
And if you're a pastor of a small church or the director of an animal shelter or other charitable foundation, now would be a good time to get on your knees and pray that your parishioners and donors don't forget where they put their checkbooks, because by doubling the standard deduction, the new law actually de-incentivizes many people from being generous with their money. Some, I suspect, will still do the right thing and keep on giving, but others will likely do the opposite.
If you're part of the working poor or among the many blue-collar workers who voted for Donald Trump last year, some of you will be okay, but the rest of you, especially those who were depending on access to affordable healthcare, will find out what the rest of us already knew: that he's nothing more than a con artist who wanted to get elected so he could give himself and his crony friends the biggest tax break they've gotten since the days of Reagan. What can I say? We warned you and you didn't listen.
And if you think the damage ends there, guess again. To pay for this tax scam, Republicans are planning on going after entitlements. On the agenda to be picked apart are Medicare and Medicaid. Paul Ryan has made it his life's mission to ostensibly end both programs and judging by that ridiculous smirk he's had on his face of late, it would surprise me if we didn't see legislation out of the House regarding vouchers and block grants by the Spring. The only silver lining for Dems is that, thanks to their Alabama win, Mitch McConnell now only has 51 seats in the Senate.
This was not a reform bill; it was a mugging. It's Reaganomics on steroids, and if you want to see how bad this will be, google "Kansas budget crisis." They are still digging out from Sam Brownback's reckless slashing of corporate taxes. The crisis was so bad that at one point the state ran out of money and had to close its schools early. And while it is comforting to know that, unlike Kansas and other states, the federal government can borrow money to cover its expenses, at some point the so-called fiscal hawks will demand a tightening of the belt. Translation, no tax increases, just spending cuts; and those cuts will affect those who can least afford it.
All this to drop the corporate tax rate down to 21 percent from 35 percent. Forget for a moment that no half-way decent sized company with accountants on the payroll who have half a brain pays even close to 35 percent. The actual effective corporate tax rate in this country, when you take into account all the deductions allowed under the law, is closer to 18 percent, with some companies paying nothing. Now, without so much a single deduction subtracted from the mix, these companies will now pay way less than they were paying; some might actually get a rebate, as crazy as that might sound.
And they get all these breaks without any requirement to higher more employees or invest in new plants or office space. In fact, there's nothing here that would prevent these corporations from parking the extra money in the same place they've parked the other $2.3 trillion that's out there: overseas. In fact, the biggest winners in this tax scam are investors who will likely see their portfolios double or triple over the next decade. If you're looking for a new career move, try hedge funds. I'm guessing there will be a large number of job openings in the not too distant future.
I hope your favorite color is red, because with these corporate tax cuts about to be made permanent, we will be seeing a lot of it. The GOP estimates their plan will add approximately one trillion dollars to the debt over the next ten years. It wouldn't surprise me if that amount doesn't get tripled. And for a party that supposedly ran on fiscal responsibility and balancing the budget that isn't just hypocritical; it's obscene.
Bob Novak was right when he said, "God put the Republican Party on Earth to cut taxes. If they don’t do that, they have no useful function." At least they aren't shy about their mission.