When they concocted the tax bill, Republicans were wearing rose-tinted glasses in dimly-lit, locked rooms in Washington, D.C. (aka “The Swamp.”)
Should we be celebrating this “legislative triumph?”
Whoa! Not so fast.
We don’t even know if the deal will improve anything except for more money circulating in the rarified world of the already-rich, the politicians’ “donor class” for which the bill was primarily crafted.
First off, there were good reasons for tax reform such as tax-code simplifications and, yes, even a decrease in corporate rates. But with gaping loopholes left intact, how dare they call it “reform” when such loopholes and shell-game chicanery remain intact for giant corporations that pay little or nothing in taxes already?
They insist the plan is fair for one and all. Here’s their theory: Giving huge tax breaks to corporations, millionaires and billionaires will benefit all Americans because that extra money in the hands of the wealthy will trickle down to the rest of us in the form of new and better jobs and boosted wages. Besides “trickle down,” it’s also known as the “rising-tide-lifts-all-boats” theory. It hasn’t worked before; many a boat has sunk. Will it work this time? Best put on your flotation jackets.
Another starry-eyed presumption is the tax cuts will spur economic growth by 3 to 5 percent of Gross Domestic Product, and that, they claim, will eventually kick off an increase in average-worker salaries of about $4,000 annually. That one’s called the “counting-chickens-before-they-hatch” theory.
Why haven’t corporations with record profits already invested in major job-creation? Will even more money convince them to invest in Main Street rather than just Wall Street? Will some new American-style noblesse oblige take hold?
Most companies, with good reason, will not expand until there is an increased demand for goods and services. That is why it would have made good sense to give the lion’s share of the breaks to blue-collar workers, middle-class workers and to small-to-medium businesses that have long created nearly two-thirds of the jobs in the nation.
Most corporations have already said they will likely use their tax-break windfalls for stock-buybacks in order to increase share prices. More money begets more money, and Wall Street – not Main Street – wins again.
But as the order-before-midnight TV commercials shout, “But wait! There’s more! Free! Just pay extra shipping and handling.”
In the fine print of the tax-cut deal are some things we hoi polloi should not be celebrating – far from it. Squint hard; you’ll see them:
- The individual mandate for ObamaCare is rescinded, thus causing big premium increases mainly by those in the middle class who make too much money to qualify for federal subsidies.
- It will increase the deficit by at least $1.4 trillion. That will lead to all kinds of “solutions,” including state and local governments having to raise taxes and fees to make up for shortfalls in federal aid – everything from education to infrastructure, from health care to worker safety. Those increased costs to the lower-income and middle-class people will more than wipe out any tax breaks they’ll see in their paychecks. According to most analyses by economists, workers will see tax breaks of – at most – anywhere from $1,500 to $2,000 annually. It won’t take long to “neutralize” those gains by deficit-induced costs.
- Corporate tax breaks for corporations are permanent; those for individuals will “sunset” in the coming decade.
This package is touted as a big Christmas gift to all Americans. It’s more like sugar-coated poison. After the sugar-rush wears off, the paycheck gains will be eroded. But wait! There’s more! The right-wing ideologues who gave us this “gift” will start using the astronomical deficit it causes as the grand excuse to start slashing Social Security, Medicare, Medicaid and other social programs. That slash-and-burn intention, along with privatization of public programs, has long been their goal. To do that, they will have to retain control of the House and Senate. And that is why their tax scheme is so sugar-coated – to fool people into thinking what a swell deal it is for the little guys’ and gals’ paychecks, the folks whom they hope will re-elect them in the 2018 election and beyond.
Probably the biggest lie Trump ever told, among so many, is when he crowed this tax-break deal won’t benefit him whatsoever (“Bull-lieve me! Bull-lieve me!”) Yeah, right. Sure, anything you say, Big Santa.
Some Christmas gift. Great big lump of coal is more like it.
